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Banda Aims to Boost DDC: An Interview With Jacob Banda

Nov 3, 2000 9:51 AM   By Martin Rapaport
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Martin Rapaport recently interviewed Jacob Banda, newly elected president of the Diamond Dealers Club. They discussed plans for the DDC’s future and its role in current issues facing the industry.

Martin Rapaport: Congratulations on becoming president of the Diamond Dealers Club.

Jacob Banda: Members want a change here. I was running to help everybody.

MR: What are you going to do for the club?

JB: A lot of business is conducted in New York City and people bypass the club. We will start by bringing business back to the club — starting with the big buyers in this area, asking them to come and do business in the club. It’s not going to be easy but we want to make sure that more business is done through the club.

We are organizing Market Weeks. A number of large manufacturers will be coming into the club on a regular basis — two days a week, and they are promising to try and make diamond purchases in the club. One of my overall goals is to bring business back to the DDC. We will bring wholesalers and jewelers from all over the United States to the DDC. There are well over 10,000 jewelers and many of them don’t know that the club exists.

We have two primary programs to bring business back to the club. First, we are going to concentrate on bringing the local New York trade back into the club. Then we will reach out to retailers and others throughout the country to encourage them to buy in the club.

Second, the board has approved a six-month membership drive that will continue through March 31, 2001. The membership drive will increase our membership and bring in new buyers. The initiation fee for new members used to be $5,000, it has now been lowered to $2,500. Relatives of existing club members can now join for $1,000. We have already brought in a few dozen new members in a relatively short period of time. We are not looking for just anyone to join the club. We are only looking for reputable people who have a solid financial background.

MR: What about the smaller NY diamond firms?

JB: I have met with the small manufacturers. If there is a stone going for $5,000 per carat, they can often sell it for $4,600 or $4,700. The club and its broker system give buyers an opportunity to buy better by sourcing directly from the smaller manufacturers that have lower overheads.

MR: What is the DDC doing about the conflict diamond issue?

JB: We have passed a resolution that will suspend any member caught selling conflict diamonds. If we see someone buying or selling, he can be suspended. We don’t want anyone to deal with conflict diamonds.

MR: De Beers is talking about changing the market so that everyone will sell direct.

JB: The New York market will keep its excellent position as the best distribution point for diamonds coming into the United States market.

MR: Is there enough rough in New York?

JB: Everyone in New York is demanding more rough and we are talking with De Beers to obtain larger allocations for the New York market.

MR: What’s great about New York? What does New York specialize in?

JB: New York is the biggest supplier and the best market for big stones and it is also the major distribution point of the full range of diamond sizes and qualities for the huge U.S. market. New York has its hand on the pulse of the U.S. market, which amounts to 45 to 50 percent of global diamond demand. The New York market knows what’s going on and is able to gear up and meet consumer demand very quickly because of its extensive distribution network.

MR: How is the current market?

JB: Demand is very strong and we do not have enough larger sizes to meet customer requests. Large polished is in very tight supply because we cannot get enough rough. There is a huge shortage of larger stones. Even if people want to pay 8 below, 10 below, they still can’t get certain sizes and qualities.

MR: What do you think is going to happen this Christmas?

JB: There will be great demand. I don’t think that everyone will get enough supplies. It has been like this all year. The manufacturer sells as soon as the stones are produced.
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Tags: Conflict Diamonds, De Beers, United States
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