As demand drops, De Beers looks beyond sightholders

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As demand drops, De Beers looks beyond sightholders

January 22, 2009

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Selling rough to non-sightholder companies is one of the strategies De Beers is exploring as demand for rough falls, Diamond Trading Co. Varda Shine said at a meeting in London earlier this week.

London--Selling rough to companies that are not sightholders and continuing to market the enduring value of diamonds are just two of the strategies De Beers is employing to weather the economic crisis.

At the Diamond Trading Co.'s (DTC) annual Client Reception for sightholders, held in London on Jan. 20, DTC Managing Director Varda Shine said the substantial decrease in sightholder demand for rough diamonds has the DTC anticipating a 50 percent reduction in its offerings for January, February and March/April.

The decrease in demand also has the DTC searching for other ways to sell rough, including making available to the secondary market goods that are not swallowed up by sightholders.

"The DTC is exploring options for bringing surplus goods to the market once very avenue of sightholder demand has been satisfied," Shine said, according to an online transcript of her speech.

In a statement released on Thursday, World Federation of Diamond Bourses President Avi Paz applauded this decision, noting that the diamond trade will be better equipped to deal with the diamond crisis if small and medium-sized companies have access to rough at "fair and current market prices."

"If the DTC's new approach pans out, as we hope it does, it could bring some much-needed relief to the secondary market," Paz said. "We welcome the DTC's decision not only because it will be good for the industry, but also because it recognizes the stabilizing role of the thousands of dealers and manufacturers who are not sightholders."

In her speech, Shine also said the DTC would continue to actively promote the equity of diamonds through the marketing campaign launched shortly before the 2008 holiday season that stressed the enduring value of the stones.

"We will continue to drive demand by investing in the highly regarded generic marketing campaign in the U.S. that highlights the enduring value of diamonds," Shine said.

On Thursday, DTC spokeswoman Lynnette Gould told National Jeweler that more details about the continuation of this campaign would be revealed at the February sight, scheduled for the week of Feb. 23.

The annual DTC Client Reception was hosted by Shine and attended by De Beers Group Chairman Nicky Oppenheimer and De Beers Group Managing Director Gareth Penny. The event provides sightholders with an opportunity to discuss the year ahead.

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