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Antwerp struggles to retain its dominance
>By Sarah Laitner in Brussels
>Published: March 12 2006 18:48 | Last updated: March 12 2006 18:48
>>
Antwerp’s diamond business leaders will on Monday hold a crucial vote aimed at resolving months of tension over securing the city’s centuries-old role at the heart of the trade.
Growing Asian competition, toughened anti-money laundering rules and changes to supply practices for rough diamonds have all heightened divisions among companies within the city’s 560-year-old gem industry.
Antwerp remains the world’s largest trading centre for rough diamonds – 80 per cent of stones pass through the city – but small operators’ claims that the Diamond High Council favours bigger companies have caused turmoil in the once-mighty governing body.
“People think the High Council is not doing anything about the decline of small companies in Antwerp,” one trader said. “It is a self-feeding machine that does not care about what it was designed to do.”
In January, Peter Meeus, managing director of the Council, resigned following an escalation in tensions. Two leading board members followed suit.
The Council’s general assembly will today vote on a restructuring plan by Belgium’s prime minister, Guy Verhofstadt, to make board elections more transparent and ensure broad representation based on turnover.
At the heart of the disagreements are calls from small-scale “diamantaires”, comprising 1,350 of the 1,500 Antwerp diamond companies, for the Council to focus on their priorities. They have called for less rigorous application of money laundering legislation, saying Belgium’s stringent enforcement creates hefty burdens.
Many of these businesses, often family-run, also believe De Beers’ decision at the start of the decade to reduce the number of traders to whom it sells is squeezing small- and medium-scale traders out of business.
The company that supplies half of the world’s rough diamonds, also changed its complex rules of engagement with this group of trusted traders, known as sightholders. Smaller companies argue this has made it harder for them to access supplies from sightholders.
Monday’s vote is seen as an important message that the city is tackling concerns for the future of its diamond industry – it employs 15,000 people in Belgium with an annual turnover of $29bn.
”The prime minister’s initiative was a very strong signal and has made everyone calm down a bit,” Yuri Steverlynck, High Council spokesman said. “Everyone is hopeful that in this new structure there will be a new balance in which everyone feels comfortable.”
One larger-scale trader said: “A lot of people think we can polish and cut as we did for hundreds of years, but we can’t. We are living in a market that is very competitive. That has created a lot of upset and finger-pointing.”
Apart from this loss of labour, Dubai is challenging Antwerp’s trading dominance with the aggressive development of a rough diamond trading platform. A number of Belgian firms have opened offices there to take advantage of a 50-year tax holiday and the short distance from India.
>By Sarah Laitner in Brussels
>Published: March 12 2006 18:48 | Last updated: March 12 2006 18:48
>>
Antwerp’s diamond business leaders will on Monday hold a crucial vote aimed at resolving months of tension over securing the city’s centuries-old role at the heart of the trade.
Growing Asian competition, toughened anti-money laundering rules and changes to supply practices for rough diamonds have all heightened divisions among companies within the city’s 560-year-old gem industry.
Antwerp remains the world’s largest trading centre for rough diamonds – 80 per cent of stones pass through the city – but small operators’ claims that the Diamond High Council favours bigger companies have caused turmoil in the once-mighty governing body.
“People think the High Council is not doing anything about the decline of small companies in Antwerp,” one trader said. “It is a self-feeding machine that does not care about what it was designed to do.”
In January, Peter Meeus, managing director of the Council, resigned following an escalation in tensions. Two leading board members followed suit.
The Council’s general assembly will today vote on a restructuring plan by Belgium’s prime minister, Guy Verhofstadt, to make board elections more transparent and ensure broad representation based on turnover.
At the heart of the disagreements are calls from small-scale “diamantaires”, comprising 1,350 of the 1,500 Antwerp diamond companies, for the Council to focus on their priorities. They have called for less rigorous application of money laundering legislation, saying Belgium’s stringent enforcement creates hefty burdens.
Many of these businesses, often family-run, also believe De Beers’ decision at the start of the decade to reduce the number of traders to whom it sells is squeezing small- and medium-scale traders out of business.
The company that supplies half of the world’s rough diamonds, also changed its complex rules of engagement with this group of trusted traders, known as sightholders. Smaller companies argue this has made it harder for them to access supplies from sightholders.
Monday’s vote is seen as an important message that the city is tackling concerns for the future of its diamond industry – it employs 15,000 people in Belgium with an annual turnover of $29bn.
”The prime minister’s initiative was a very strong signal and has made everyone calm down a bit,” Yuri Steverlynck, High Council spokesman said. “Everyone is hopeful that in this new structure there will be a new balance in which everyone feels comfortable.”
One larger-scale trader said: “A lot of people think we can polish and cut as we did for hundreds of years, but we can’t. We are living in a market that is very competitive. That has created a lot of upset and finger-pointing.”
Apart from this loss of labour, Dubai is challenging Antwerp’s trading dominance with the aggressive development of a rough diamond trading platform. A number of Belgian firms have opened offices there to take advantage of a 50-year tax holiday and the short distance from India.
No seriously, I'm just posting this because it's not all that often my place gets a fat article in the FT. Otherwise I don't expect you to be arsed all that much to be honest.
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