Breakfast with Rapaport

Martin Rapaport stressed the importance of values and addressed industry concerns about lab-grown diamonds.

By Shuan Sim

The diamond industry’s focus must shift toward the younger generation, Martin Rapaport, chairman, Rapaport Group, said at the annual Rapaport Breakfast at JCK, and the way to capture their attention is through values. “What is it your company can be the best at and what value can it add to the diamond industry?” Rapaport asked the crowd. He highlighted that while the diamond industry has shrunk over the years and lost its edge in attracting new talent, there are ways to fight back. “The key is finding what your passionate ability is and finding that intersection with profitability, sustainability and the added value a company can bring,” Rapaport said.
Praveenshankar Pandya, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), and Jean-Marc Lieberherr, CEO of the Diamond Producers Association (DPA), were guest speakers at this year’s Rapaport Breakfast, where Lieberherr recapped the DPA’s presentation given two days earlier (see page 36 for full details). They shared further insights into the state of the industry as well as outlining the efforts industry leaders have taken to bolster confidence.

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The Importance of Values
Millennials continue to matter more as consumers, Rapaport said, and they are a generation led by their values. “The only way a company can survive a tremendous amount of disruption is to have values,” he stated. These values become the company’s brand and they must be reflected at all levels, from the management down to the employees. “Your employees are your most important stakeholders,” Rapaport explained. “Our team members are our most important assets in the diamond industry. We won’t have a business if we don’t do things the right way.”
Members of the diamond industry have to understand that Millennials are not like the preceding Generation X and Baby Boomers — the “me” mentality prevalent in the older generations has given way to the “we” mentality. “It’s a ‘we’ society now,” Rapaport said, adding that a company is doomed to failure should it not change. But despite the mismatch between what the diamond industry understands about today’s customers and what they really want, Rapaport felt there is hope. “Everyone has been fighting over this small slice of the pie. Grow the pie! Make it so there’s more pie for everybody!” he concluded.

India’s Conundrum
“India has cut 15 percent less diamonds by volume and also 15 percent less by value,” Pandya stated in his speech. He described India’s market as shrinking, with all diamond centers across the country experiencing similar challenges. “Hundreds of manufacturing units have shut down and more than 100,000 workers have left the industry for other industries such as textiles,” he added. While some players are doing well, Pandya pointed out, many other companies are not. The industry malaise has largely been caused by the lack of profitability. “We are doing business but we are not making profits,” he explained.
Bringing back profitability to entice people to join the industry would turn India around, Pandya said. That would revive the labor situation and it would also revitalize the finance sector’s confidence in India’s diamond industry. Pandya described the shock the industry felt when ABN AMRO transferred its diamond and jewelry activities in India to IndusInd Bank Limited in April 2015, reducing financing options. Ever since, Pandya added, financing has become trickier, as cutters pay more to borrow the same loans and banks are reluctant to fund a market they have little understanding of. “If you’re just coming in to finance the industry without understanding the diamantaires, you might lose money,” Pandya noted. While India’s diamond industry has become more transparent, Pandya stressed the importance that both diamantaires and banks need to continue to open up more.

Article from the Rapaport Magazine - July 2016. To subscribe click here.

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Tags: Shuan Sim