RAPAPORT... A new round of elections is taking place at the Antwerp World Diamond Centre (AWDC) and the accompanying discussion is about the critical importance, in light of the current international financial situation, of electing representatives who can help Antwerp position itself to prosper and compete, rather than just survive on past glory.
Frank Fensie, president of the Belgium Polished Diamond Dealers Association (BVGD), recently issued a press release in which he urged the city’s diamantaires to be open-minded and take the elections seriously. “We need people who understand the challenges we face, and who are willing to override their own interests for the benefit of the whole sector,” he said in the release. “The origin of those candidates is not relevant. Please do not vote according to their origin. We are all in the same boat and it is important that those who will be steering this boat are the best people for the job. We should all be asking the candidates for the agenda they are willing to work on.”
By origin, Fensie was referring to the fact that companies vote in AWDC elections in one of three categories, based on their annual trade turnover. There are approximately 700 companies in the category with turnover up to $30 million, compared to 150 companies in the two higher-volume categories.
Does it really matter?
The AWDC elections seem to be perceived in two different ways by the members of the close-knit Antwerp diamond community. On the one hand are those who are deeply and seriously involved in the whole election process, eager to make a choice that matters in hopes of a better future. On the other hand are those who are convinced that the election process, no matter how seriously some treat it, will not have any decisive impact on the difficulties they are confronted with in their day-to-day business.
No matter who wins election this time around, certain changes are inevitable. The fact that current AWDC President Jacky Roth and Vice President Kaushik Mehta are ineligible to run again will have an impact, perceived or real, on the extent to which the interests of the smaller and medium-size businesses are taken into account going forward. Although both men are from big companies, they were generally regarded as being fair-minded to smaller companies. Another thing that is certain is that Ari Epstein, the current AWDC deputy chief executive officer (CEO), will move up to become the new CEO.
Other than that, there are no certainties. Roth explained that diamantaires have until the election, which is being held June 15 and 16, to make up their minds. The names of candidates will be available June 1. Some names have been whispered locally as potential candidates, including Nishit “Bali” Parikh, Michel Suchowolski and Jean Paul Tolkowsky.
In a way, the leadership of the AWDC cannot assure that things are going to get better. The laws of economics, not the AWDC, ensure some tough times ahead, especially for the smaller and medium companies that haven’t been able to find their marketing edge and their source of added value in the current global economic turmoil.
Having said that, there have been suggestions among those companies that to assure their voice is heard in future AWDC decisions, they should unite and find a way to elect maybe one, two, or even, with some luck, three members to represent their interests and help them stay afloat. Unfortunately, despite their experiences in past elections, the greatest weakness of the smaller companies — who represent by far the largest number of players — is that they’re still totally unable to agree on a limited list of candidates they could all vote for.
Who Holds the Power?One owner of a medium-sized company, who preferred to remain anonymous, has an interesting perspective on who holds the power in deciding Antwerp’s future. “There’s almost no doubt at this stage that the influence of the Indian diamond companies, and especially the majors, will end up being reinforced further by this new round of elections,” he said. “By and large, the power lies now in the hands of the Indian moguls. It’s a fact.” Currently, five of the six trade representatives on the AWDC board are Indians.
This diamantaire said that if the AWDC could unify its members enough to speak as “one company, one voice,” it might be able to slow down the process of Indians assuming control over Antwerp “but it won’t stop it at all. The future of Antwerp will be determined by the Indian majors. Instead of fighting that, we might as well accept it and hope that the interests of the major Indians will continue to match those of Antwerp.”
Characterizing the Indians and Antwerpians as whales and fishes, he theorized that “As long as the whales are interested in staying in Antwerp, the little fishes will be able to continue to feed on their crumbs. The day the big fishes leave, so does the rough, so will the clients, and, eventually, the polished. If anybody has a different opinion of what our reality is, I’ll be the first to listen but, in the meantime, the sooner we accept the reality, the more chance we’ll have to adapt ourselves to it.”
The MarketplacePolished:
• 4-grainers+ are moving well.
• In general, across the board, the VS2+ range is in good shape.
• Even when it is possible to get a few extra percentage points on polished prices, rough costs eat up the gain. Dealers say: “If the polished gains 2 percent, the rough gains 10 percent, so we’re in trouble anyway!”
Rough:
• Still 20 percent more expensive than the polished — and no clear solution to the problem.
Article from the Rapaport Magazine - June 2010. To subscribe click here.