JCK Diamond Dialogues: Profitability, Banking, Disruption and Change

30/10/2015 20:44

JCK's "Diamond Dialogues", a series meant to take a wider look at the diamond industry and the forces that shape it, has published a thought-provoking presentation by Erik Jens, head of diamond and jewelry clients for ABN Amro, the largest bank in the industry. Jens discusses how other industries, oil in this case, cope with profitability woes, why bankers are wary of the diamond business, and the disruptive change that is quickly heading our way. Jens' considerations reach far and wide. Concerning the state of the industry, he believes the diamond industry should respond like the oil industry has to challenging times: by adapting strategy, increasing efficiency, cutting costs, product innovation and exploring alternative business models. In a word: embracing change.

Jens further discusses how risk perception jeopardizes bankability, and how banks are emphasizing transparency and asset-backed lending: "Industry bank finance will evolve. It will be available only to modern, sustainable companies with strong balance sheets, transparent operations, and, above all, good strategies. Those who can’t meet the bar, or don’t want to meet the bar, will be left behind." He also touches upon disruptive changes heading the industry's way, such as 3-D printing ("You have a factory in a box"), and how it will lead to the "demonetizing, democratizing and dematerializing" of the industry. He even gave a stab at some science fiction. In short: "The speed of adaptation and innovation in our industry needs to be promoted. It’s all about having an operational and innovative mindset and about assuming that anything is possible."