Oct 03, 2016

WFDB’s Executive Committee Focuses on Industry Challenges: Finance at the Forefront

The Executive Committee (ExCo) of the World Federation of Diamond Bourses (WFDB) which met recently in London, focused on the major challenges before the global diamond industry. Primary amongst the topics for discussion was the issue of financing for the trade and the need to “demonstrate clearly” that the industry is “self-regulating” on the issue of undisclosed synthetic stones entering the mainstream pipeline.

"Diamond companies, especially the small and medium-sized firms who make up the bulk of our membership, cannot easily access financing," explained WFDB President Ernie Blom. "Diamond manufacturing and trading companies need to finance their operations, however with banks facing higher capital requirements, risk aversion and increased regulatory burden, the financing they make available to diamantaires has fallen significantly in recent years and that has meant reduced operational flexibility and increased vulnerability to market movements for diamond companies.”

Blom said that the WFDB aims would “proactively address”  the issue of declining trade financing with a diamond financing seminar and roundtable discussion at the Presidents Meeting in Mumbai in January 2017.

“We will be inviting representatives from a wide range of organisations, including banks, insurance companies and funds, to understand our needs and to see that we are a well-organised industry that acts prudently," he elaborated.

A lengthy discussion was also held on the impact of undisclosed synthetic diamonds on natural, mined diamonds. "Whilst they are a very small part of the overall market, our fear is that undisclosed synthetic diamonds could undermine consumer confidence in our product and industry as a result of this underhand activity," Blom stressed.

The ExCo discussed the importance of the WFDB Charter on Disclosure of Synthetic, Treated Natural and Natural Diamonds, and the requirement of its 30 affiliated bourses to comply.  The meeting underlined the importance  for the diamond trade to clearly demonstrate  that its workings are both  transparent and  responsible, to maintain consumer confidence.

Another important topic discussed was on generic marketing. And the ExCo “renewed its commitment to the work of the World Diamond Mark which the WFDB established to reinvigorate consumer demand for diamond jewellery”, the organisation said.

The meeting lauded The Young Diamantaires initiative; and  also  discussed the organisation's 70th anniversary celebrations in 2017.