28th World Diamond Congress in Thailand
Facing the millennium, the diamond industry deals with disclosure
and diamond branding and takes the measure of its new players
Laser drilling took center stage this summer in Bangkok, Thailand, the
colorful backdrop for the 28th World Diamond Congress organized by the World
Federation of Diamond Bourses. In a significant development, delegates voted
unanimously to require federation members to disclose in writing any laser-drilled
diamonds they handle beginning in 1999.
Other topics of discussion ranged from De Beers' controversial decision
to test-market branded diamonds to the rising stature of the diamond industries
in China and India, both of which seek membership in WFDB.
Drilling to the Core of the Problem
De Beers feels any treatment other than traditional cutting should be disclosed
all along the distribution channel, says Anthony Oppenheimer, president
of De Beers' Central Selling Organisation. "If the customer feels cheated,
we all get tarred with the same brush," he told the delegates.
The issue of requiring disclosure of laser drilling was debated at previous
World Diamond Congresses but always met with resistance from the International
Diamond and Manufacturers Association. This year, however, IDMA's Jacques
Roisen, of Michal Ferman, Roisen & Ferman Inc., suggested the association
would go a long with the idea as long as a "reasonable size limit"
was established for diamonds requiring disclosure. "In the manufacturing
community, it is impossible to guarantee that stones under a certain size
limit are not drilled," he said.
Others who generally opposed full disclosure pointed to the inconvenience
it would pose for manufacturers who own stocks of laser-drilled diamonds
or who manufacture jewels containing multiple small diamonds.
Eli Izhakoff of J. Izhakoff & Sons Inc. outgoing WFDB president,
sounded a cautionary note. "If we do it only halfway [requiring disclosure
only for larger diamonds], better not do it at all," he said. "Full
disclosure across the board may be inconvenient, but it is the right thing
Eli Haas, of ENH International Inc., president of the Diamond Dealers
Club of New York City, agreed: "We need to show consumers we are an
honest and honorable trade, and we came down firmly on the side of disclosure."
Haas drafted the disclosure resolution that delegates passed on the last
day of the congress. It reads: "Although laser drilling is an acceptable,
permanent process utilized in the cutting and polishing of diamonds, and
does not infuse a foreign substance into a diamond or otherwise affect its
integrity, it is nevertheless required that this process be disclosed in
writing when diamonds are offered for sale. This resolution goes into effect
Jan. 1, 1999."
The timing gives dealers and manufacturers with laser-drilled diamonds
time to adjust to the new rule.
De Beers Branding Program
De Beers' recent decision to "brand" diamonds in test markets
in England drew fire at the congress. The company began to offer branded
diamonds (0.30 carat and up of reasonable quality) in mid-August in stores
in Chester, Manchester and Liverpool, England. The purpose, says De Beers,
is to understand what is best for the consumer and for the industry. "It
is only an experiment one of many we do and we are not even
so sure it will work," said Oppenheimer.
However, diamantaires and diamond manufacturers voiced vehement opposition,
saying it looks like an attempt by De Beers to extend its monopoly into
the polished diamond market. Haas criticized the idea, repeatedly calling
it a "scheme."
"Branding is exclusionary because it will be available only to a
small number of people and will effectively disenfranchise large segments
of the diamond market," he said. "The concept threatens our very
Harry Garnett, a spokesman for De Beers, tried to diffuse the concerns.
"This is not an effort to gain a stranglehold on the polished market,"
he said. "We are in Week 1 of a very small operation. We stress that
in testing the concept of branding, we want to see if branding is important
for consumer confidence. We want to know if it adds value to the process
of selling diamonds. We understand the damage it could do to the industry
No resolution was reached, but both sides agreed discussions on De Beers'
branding should continue behind closed doors. De Beers said it will stay
in close consultation with the trade on the progress of the experiment.
New Players Emerge
Attendees also had the opportunity to get acquainted with powerful new market
forces in the diamond industry. Two of the biggest are China and India,
both of which are seeking to join WFDB.
The presence of China and India underscored long-term growth possibilities,
even in a depressed world economy, and the increasingly global nature of
the diamond business.
China, with its population of 1.2 billion, could play a huge role in
the future. In terms of diamond consumption, China has jumped from $290
million in sales in 1995 to $450 million in 1997. Delegates from China have
visited Israel and other trading centers and are constructing the diamond
infrastructure policies, rules and trading practices to coincide with world
In India, the same process is well under way. In fact, India already
processes the bulk (in quantity) of the world's cut diamonds.
Conversely, the collapse of several Asian economies and the ripple effect
in the diamond business dominated business discussions.
Delegates had the opportunity to witness the Thai diamond industry's
quandary firsthand. The Thai Diamond Manufacturer's Association and the
Bangkok Diamonds & Precious Stones Exchange cohosted the congress and
repeatedly invited the guests to tour the Thai industry and to conduct business
while in the country.
A Thai inter-bourse sales event and an opportunity to buy diamonds that
belonged to Thailand's "formerly wealthy" were organized also.
(Diamond buying opportunities and challenges have readily developed as a
result of Thailand's economic downturn.)
In political happenings, Eli Izhakoff stepped down as president of the
WFDB, but was elected as lifetime honorary president. Itzhak Forem of Israel
was named acting president, and Eli Haas of the Diamond Dealers Club of
New York City was named vice president.
The 1999 WFDB President's Meeting will be held in Moscow; the next World
Diamond Congress will be held in Antwerp in 2000.
by Robert Weldon, G.G.
Copyright © 1998 by Bond Communications.