With a cheaper labor force than in the traditional diamond production centers in Antwerp and New York, and with new equipment that facilitated the work, the Indian faceting and polishing industry was booming. Carrying out the cut of small stones, which previously was not considered profitable, Indian diamond producers received more profit. Over time, Indian buyers have risen to a higher level, being already able to buy directly from diamond manufacturers, rather than from wholesalers or dealers. India currently has a dominant role in the polished diamond sector, accounting for more than 80 percent of the world's diamond production. But now it is no longer necessary for Indian diamantaires to go on a long journey to Antwerp. Just three hours from them is Dubai,
In the conservative sector, which for a long time was valued for secrecy and tightly knit partnerships, Dubai's development was staggering. The diamond and diamond trade in the emirate, which in fact did not exist and whose volume in 2001 was less than $ 5 million, in 2013 and 2014 grew into an industry worth about $ 35 billion, according to Peter Meeus, chairman of the Dubai Diamond Exchange Dubai Diamond Exchange, DDE). Antwerp remains the largest diamond trade center in the world, its diamond exports in 2014 reached $ 15.7 billion, compared with the sale of $ 8.3 billion in Dubai, but its market share is constantly decreasing.
The Dubai Diamond Exchange is located in the sparkling Almas Tower near the complex of towers on the artificial island of Jumeirah Lake Towers. This is the highest commercial building in the Middle East, many companies related to trade are located on one of its 68 floors. As for why Dubai's prestige has grown so fast, Meuse, taking such a good place, can appreciate its strengths compared to other jewelry trading centers - formerly the chairman of the DDE was the head of the Antwerp World Diamond Center (AWDC) . He calls Dubai's business-friendly atmosphere as one of the distinctive features for the trade in diamonds and diamonds. Inside the tower, Almas has access to a boiling solution plant to remove dirt and other trace materials from both diamonds and diamonds, and services for storage in a secure storage facility located several floors below the ground (probably the most secure storage in the Middle East ). Companies can also quickly register online at the Dubai Multi Commodities Center, regardless of whether they are in India or New York; Centralization means a reduction in paperwork. Regardless of whether they are in India or in New York; Centralization means a reduction in paperwork. Regardless of whether they are in India or in New York; Centralization means a reduction in paperwork.
The bureaucracy hinders business not only in Europe, but also in India. Many of the diamantaires, who at least once visited Dubai to buy and sell, have now opened their head offices in this emirate. "It's easier," Meeeus explains, noting the presence of a large number of skilled workers in Dubai. But the main reason for the influx of Indian companies may be prosaic: they like the way of life here. Housing in Dubai is more affordable than in Mumbai and other major cities in India, which means a higher level of living conditions for the staff and management of the company. "You can have a very good place for a reasonable amount, compared to Mumbai, where everything is expensive. Many of these huge Indian firms prefer to work here than in crowded Mumbai, "Meeeus says. It's not uncommon that diamantaires work seven days a week, he says.
The fact that Dubai is considered a good place to sell raw materials for the Indian faceting and polishing sector helped to attract sellers with big names, for example, the auction sales company De Beers Auction Sales, which opened its office in Dubai in 2011. Neil Ventura, executive vice president of the company based in Singapore, says that this was done in order to provide more convenient access for Indian-based customers (the company currently does not have a presence in India) and to provide opportunities For new customers in the region who are interested in buying rough diamonds. This step was justified. "We tripled our customer base in Dubai over the past three years and doubled the revenue from the Dubai office to our global sales," Ventura says. "Many [of our customers] are small and medium-sized enterprises that do not have the opportunity to receive rough diamonds from major shopping centers, for example, from Antwerp." Other sellers include the large Russian company ALROSA, which again resumed its Dubai office in November, which was closed earlier due to the crisis.
Business reacted to this attitude when "can-do" prevails in the public and private sectors of Dubai, but like many things in Dubai, the Almas Tower gives a special sheen that is particularly suited to trade in diamonds. "This is an extremely impressive building," says Clifford Elphick, chief executive officer of Gem Diamonds, a diamond mining company with operating mines in Lesotho and Botswana. At its Letšeng site in Lesotho, Gem Diamonds constantly discovers some of the largest diamonds that need to be found now; The speed with which you can carry out customs clearance of diamonds in the Kimberly Process office, by conducting it on the trading floor. "Dealers can fly, check the goods, determine the price, buy them and leave," says Elfik. - Business executives [in Dubai] are actively fighting for market share. They are determined to do this, and they are doing it. It's very wonderful. "
Not only the proximity and communication with India, but also the resource-rich African continent have helped Dubai in development. Most of the diamonds are mined in Africa, and the diamond producing countries include Botswana, South Africa, Angola and Zimbabwe. Although Gem Diamonds is headquartered in Antwerp, Elfick believes that Dubai is attractive, especially for smaller diamond companies who believe that it is easier and more efficient to contact their customers here. "Dubai is slowly but surely steadily improving its position in the world of diamond trade, dealing with diamonds and financing diamonds. Of course, more and more people consider the effectiveness of the Dubai Diamond Trade Center to be attractive. " He explains the growth of Dubai from the point of view of the development of a new axis "north-south" Which connects diamond producing countries in Africa directly with diamond manufacturers in India and the Far East, for which Dubai is a convenient stopping point. "The geographic location of Dubai is extremely advantageous not only for Indian dealers with diamonds from Mumbai and Surat, but also many Israeli companies have found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. " But also many Israeli companies found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. " But also many Israeli companies found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. "
The "north-south" axis became stronger when De Beers transferred its "sites" - regular sales of rough diamonds to its long-term customers - from London to Gaborone, the capital of Botswana. Beneficiation, as is known in the industry, is intended to assist diamond-producing countries by placing additional economic activities, such as cutting and polishing and sales, along with mining. Regular arrivals of buyers to sites (which take place approximately every fifth week) also support the local economy. For many of De Beers sightholders - large buyers of rough diamonds - this move means that now they have one less reason for flights to Europe. Beneficiation brought direct benefits also to Dubai, And as infrastructure is increasingly developing in diamond-producing countries in Africa, Dubai is also benefiting from this. "At the moment, Namibia is reviewing its contracts with De Beers, which can also have an impact on the UAE and, probably, is positive," Meeeus said. Emerging new production is also important, as new diamond manufacturers have been looking to Dubai as a logical place to sell their diamonds at tenders.
Since traders in diamonds and diamonds are very mobile by their nature, this may be one of the competitive advantages of Dubai, as for the trade in diamonds - this is the airline of Emirates. Meeeus, listing the distinctive features of Dubai, mentions that Emirates connects it with many diamond-mining countries in Africa, including flights to Luanda, Johannesburg and Harare. Dubai's links with Africa are not just logistical. This emirate strengthens economic and political ties with many countries on the continent. The Dubai Diamond Conference, organized by DDE, will be held in April this year, and will be attended by all important diamond mining companies, as well as mining ministers from countries including South Africa, Namibia, Botswana and other countries. "That fact,
When the Antwerp Diamond Bank announced last September that it was curtailing its activities and would not provide new loans, this was seen by many as the symbolic decline of Antwerp. ADB, being the only specialized diamond bank in the industry, provided over 10 percent of total loans in the diamond and diamond financial market and financed 30 percent of traders in Antwerp. With the departure of ADB and taking into account the fact that ABN Amro - another specialized bank that finances the diamond and diamond industry - turns off loans to dealers with diamonds and diamonds, from the amount of financing of the industry in the amount of $ 16 billion, it went up to $ 3 billion, which accounted for these two sources. Fears of a liquidity crisis due to this led to the fact that prices, Which paid for rough diamonds, fell by 6.9% in the last three months of 2014, which is significant in the industry, which traditionally has very low volatility according to commodity market standards. After the announcement that Indian diamond producers will be forced to sell off the stock at a discount, India's Gem & Jewelery Export Promotion Council (GJEPC), the most important body in the country for trading, issued a statement calling News in the news that diamantaires offered discounts of 5-20 percent, "false and groundless."
It coincided that around the same time, when the ADB announced that it was leaving the market, three UAE banks - Emirates NBD, Mashreqbank and National Bank of Fujairah (National Bank of Fujairah) - began offering loans to the diamond and diamond industry in Dubai. In a world where liquidity and the availability of financing is a significant issue for trade, Meuse calls the emergence of borrowers from the UAE "almost a turning point" for the local market. After a recent series of meetings with bankers in Dubai, Elfik believes that the UAE banks are seeking to "securely" capture the financing market and help fill the gap. "Of course, this will take time to attract new customers, study their business and get acquainted with their client scenario. Slowly but surely, other banks are starting to use this opportunity on the market. "
The Dutch bank ABN Amro has an office in Dubai since 2002. Since diamond-diamond trade is international in nature, its banks should also be: ABN Amro operated in major diamond and diamond trading centers, including Mumbai, Antwerp, New York and Hong Kong. Rajiv Jain, the regional head of the ABN Amro Bank in the countries of the Gulf Cooperation Council (GCC), dealing with his clients selling diamonds and jewelry, says that the closure of the ADB bank accelerated the emergence of a proposal from new potential customers - those who Wants to be in the banking service at an institution that has a global presence and understands the diamond and diamond market.
Jain believes that the industry as a whole will benefit from loans from UAE banks for the diamond and diamond sector, and in order to stimulate the entry of local banks into this sector, ABN Amro has been engaged in exchanging experience in this sector over the past two to three years. "We created our own competition," Jain explains, adding that it is safer if they are not the only borrower for the company. "You always want to share the risk." We believe that this will be better for the industry in Dubai in terms of risk diversification. "
Jain says that the key obstacle for the UAE banks is their inadequate presence in global diamond centers. This means, perhaps, a lack of deep understanding of the position of its customers in the case of working with a diamond-diamond group that has enterprises around the world. "Knowledge of what is happening on the market in other diamond centers is not easy to get without direct presence on it," Jain says. But the UAE banks are cautious and conduct a thorough check of security and financial condition, he says. "Local lenders either hired experienced bankers who worked in the diamond and diamond industry, or use the advice of existing banks like ours, and also seek advice on the market from key industry players."
http://www.businessweekme.com/Bloomberg/newsmid/190/newsid/504/The-New-Diamond-Capital
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