Diamond industry lender ABN Amro staying put

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Diamond industry lender ABN Amro staying put

By Michelle Graff

February 12, 2008

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Tel Aviv, Israel—Diamond industry lender ABN Amro Holding NV has been acquired by Fortis, but the company isn't getting out of the jewelry business.

In fact, ABN Amro's Victor van der Kwast, speaking Tuesday afternoon at the Third International Rough Diamond Conference in Tel Aviv, said the company plans to expand into the jewelry/luxury business and into gold/precious metals.

The company also has plans to expand into new markets.

"We will engage and we will engage in a large way," said van der Kwast, who is chief executive officer of ABN Amro's International Diamond and Jewelry Group.

Van der Kwast rounded out the final day of speakers at the conference, held Monday and today at the Dan Panorama Hotel in Tel Aviv.

In another speech earlier in the day, Diamond Trading Co. Managing Director Varda Shine called upon the diamond industry to take a marketing cue from the electronics industry on how to turn product scarcity into success.

She cited Nintendo's interactive video game system Wii as a prime example.

She said Nintento took a decades-old product and, using technology and skillful marketing, turned it into a must-have product for homes around the world.

Shine said one of the factors that made Wii so popular was that it was hard to find.

"This is just one example of how you can drive success through scarcity," she said.

In addition, Shine added Latin America to the list of emerging markets, already including India and China, that could produce increased demand for diamonds in the coming years.

As the conference concluded on Tuesday, other highlights included:

* Billionaire mine owner and retailer Lev Leviev gave a speech calling for decreased competition in the diamond industry to combat rising prices. He also said producers and manufacturers should form partnerships instead of just continually creating competition among manufacturers.

* Rapaport Chairman Martin Rapaport, the final speaker of the day, gave an impassioned speech that pointed out the decline of the U.S. diamond market and the need for beneficiation in Africa.

He said the "diamond dream" is the wish of every little girl to get an engagement ring and is an ingenious marketing strategy.

But, the diamond dream in one country could be a nightmare in another, such as it is in the poverty-stricken west African nation of Sierra Leone.

"What about those people?" Rapaport asked the crowd. "I think they are as much a part of this industry as you and I."

* Analyst Charles Wyndham, founder of Polishedprices.com, said there has been a huge diamond-price surge in the early part of 2008, with prices rising nearly 10 percent in January.

For the entire year, he forecasts polished prices to increase an average of 9 percent compared with 2007, and rough prices to go up 10 percent compared with last year.

He also said the number of bankruptcies is "worrying" and called for a difficult year.

Wyndham said even though China and India's emergence is expected to prop up the world economy in the future, it won't solve the short-term problems for 2008.

* Israel Diamond Institute Managing Director Eli Avidar extended a public thank-you to the Namibian government officials present for their "professional handling" of the plane crash outside Windhoek, Namibia, last month that claimed the lives of five Israelis.

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