|Speaking at the De Beers Insight session at JCK Las Vegas, De Beers Group of Companies CEO Philippe Mellier presented his optimistic view of the diamond industry's long-term future, commenting that "... two people can look at exactly the same image and see something entirely different - it's all a matter of perspective."
"We recognise that there are challenges for the industry to address and we do not underestimate them," says Mellier, adding that "rapid external changes and internal pipeline dynamics have created some difficulties for businesses across the value chain, including De Beers, and we fully appreciate that the last few months have been tough." However, he asked the audience to consider that although the challenges must not be ignored, "it would be just as remiss of us if we were to ignore the opportunities on the horizon."
Stressing what he sees as a "very strong global footing" of the industry, Mellier says he sees very favourable global prospects in the medium to long-term for the industry, pointing to De Beers' data which shows that global diamond jewelry demand reached a record high of US$81 billion in 2014, and a "continued picture of some global growth", with the U.S. market showing growth of 7 percent over the previous year.
Mellier noted that there were some major issues facing the industry. Listing the first challenge as "global production capacity in the face of growing demand," he referred to McKinsey's global rough diamond production forecasts which "indicate that existing rough diamond production will start to plateau and then decline gradually post 2020." De Beers' response to this challenge, says Mellier, is to maximize the capacity at its existing mines, investing in exploration, extending the life of Jwaneng and Venetia, and building Gahcho Kue in Canada's Northwest Territories, which he describes as "the largest new diamond mine currently under development globally".
Other challenges noted by Mellier include the increasing need for financial transparency, to which De Beers has responded by, among other measures, "introducing more rigorous financial strength and transparency requirements of the Global Sightholder Sales customers, thereby supporting the development of the diamond sector as a worthy recipient of bank funding." The glowing impact of technology, consumer confidence and retail margin pressure are also mentioned as challenges to the industry, along with "the growing importance of responsible sourcing for millennials", which is a challenge that Mellier believes De Beers' Forevermark brand is well-positioned to meet.
Mellier urged his audience "to bear in mind the importance of focusing on marketing, branding and retail standards; to keep alive to the preferences of consumers old and new; and to make sure you prepare your business to thrive in a growth environment.""I believe that this bright future is well within our grasp and, if we continue to work together for the benefit of the sector, this future will be with us sooner than we may expect," he concluded.