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IDMA Calls on Rough Producers to Perform a Reality Check

Oct 10, 2013 5:14 PM   By IDMA
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Press Release: The 2013 presidents' meeting of the International Diamond Manufacturers Association (IDMA) opened in Antwerp today with a strong statement issued by the meeting's participants, reminding the rough producers that "generals cannot win the battle without their soldiers."
On the agenda of the two-day marathon meeting are discussion topics such as the state of diamond manufacturing in the ''New Normal'' diamond supply pipeline; the disappearance of the manufacturers' profit margins; IDMA's and its members' relationship with the major producers; the changes in the distribution methods and channels; and the demise of secondary market. The meeting is attended by IDMA members from Belgium, Botswana, China, Germany, India, Israel, the Netherlands, Russia, South Africa and the U.S.

Below follows the text of the opening statement:

The IDMA presidents' meeting takes place at a time that the market continues to experience difficult and complex problems. There is a real crisis in our industry. Speculative rough dealing is spinning out of control, rough prices keep increasing and the fall in polished prices has brought the manufacturers to their knees. Our appeals for a reality check on the rough producing companies, to the rough diamond marketing organizations in various countries and to the banks that are financing our business, have not yielded any results.

Mining companies are busy with their own current issues, be it the move to Botswana or privatization, and are trying to address their own local business targets. They are not looking to analyze what is happening in the global market and are not doing anything to correct it.

They seem to be forgetting that it is the manufacturers who are the most valuable resource in moving the goods to the market and if manufacturers cannot buy and polish at a profit, it is not a sign of a healthy industry. The wheelers and dealers have yet again been shown up for their inability to make a contribution to creating a healthy market, yet the mining companies continue to rely on them.

This past July, a mining executive said in Antwerp that they understand the problem, even better than we do. However, as many senior executives are now resigning from some of the diamond producing companies, we must hope that those who will replace them will appreciate the pressing needs of the industry. Regrettably, we now see many people in key positions at rough diamond producers who have no experience in our industry. They may be good marketing professionals and financial experts, yet they do not understand that diamonds are a unique product.

Yes, diamonds are goods, a product for the consumer but a product devoid of consumer and investment features. To ensure that the industry continues to be sustainable, the producers must not only be governed by short term targets, relying on market speculators to fuel their profits but they must essentially wake up and re-assess what is in their long term interest. It is time they realize that their supply strategies must take into account the genuine demand and need in the market.

We appeal again to the management of the producing companies and to shareholders. You are losing the most valuable people in the market -- us, your soldiers. Do you think the generals will be able to fight the battle for diamonds without these soldiers?

To conclude, we would like to remind all of Cecil Rhodes' insightful saying: "Should there be only four people in the world, we should be producing diamonds for only two of them."

About IDMA

IDMA was founded and convened for the first time in 1946 in Antwerp. It is committed to fostering and promoting the highest ideals of honesty and best practice principles throughout the global diamond industry, as well as full compliance with all relevant national and international laws. The organization has developed and adopted a code of conduct, which is binding on all 15 member associations. IDMA also works to encourage fair and honorable practices and decent working conditions for industry employees and to preserve, protect and promote consumer trust and confidence in diamonds. It encourages and supports social responsibility by the industry in respect to all citizens of the world. 

The Association has played an active role in establishing the Kimberley Process Certification Scheme and is a co-founder of the World Diamond Council.

Rapaport News is not responsible for, and does not endorse, the content of any third-party press release. This is not a Rapaport Press Release. It has been provided as additional information for our clients.

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Tags: diamond, IDMA, meeting, Production, rough
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