The next few paragraphs will be a summary of the presentation; skip it if you like.

• Diamond demand exceeds supply – India and China's consumption growing at 15-20% and De Beers stockpile has dropped from $5Billion to a WIP $0.5B in the last 5 years.
• Even though there are now 4 or 5 big diamond miners, they are all acting responsibly; price wars are not likely. The 20% price rises over the last year will continue.
• Branding and the Internet are competing forces squeezing out the inefficient and many small family retail biz.
• Most of the money is in the rough end with +25% net margins. Polishing manufacturers are doing OK with about 7% margin, and some jewellery manufacturers survive on 6% net.
• Retailers are suffering most. High gross margins are attracting the big up-stream miners and polishing companies downstream. But the retail segment makes less than 5% net, and this is shrinking under pressure from e-tailers. To succeed costly brand building needed to stay visible, but this costs more and is getting less effective as consumers are bombarded with 5 times more marketing than 30 years ago.
• So here is the dichotomy:
  • Diamonds are an emotional need – not utilitarian. The need for love and symbols of love is far greater than the need for physical products.
  • But diamonds are being commoditized with great efficiency via lowest cost retailers and the Internet.
• The most successful retailers of diamonds and jewels are those who can add value to the commodity. Yes, the box counts too. But we are entering a transparent world where the cost of the raw ingredients is now becoming public knowledge, just like the price of gold.
• Our industry is now helping poor African nations develop their diamond mining and local cutting and polishing.
• Synthetic and treated diamond detection and clear declaration ensures our products are always clearly identified as natural mined diamonds.