De Beers' Mellier: 'Encouraging Early Signs, But 2016 to be Volatile'

Finance and Trade
20/01/2016 17:50

In the traditional sightholder reception during the first De Beers sight of the year, De Beers Group Chief Executive Philippe Mellier said there were some encouraging signs in the diamond industry at the start of 2016, but cautioned that the recovery in the diamond sector remained delicate and that there was likely to be some volatility in 2016.

“We have seen polished diamond prices start to stabilize and even increase in certain areas, we have seen some encouraging early indications from holiday season sales in the U.S. consumer market and we have seen greater trading activity than at the end of 2015.” However, he added, “There continues to be uncertainty regarding the macroeconomic outlook, currency pressures have the potential to weigh on downstream demand in a number of locations and we will need to see how retail restocking appetites develop.”

Setting out De Beers’ approach to supporting and accelerating improvements in the diamond industry, Mellier said the company would focus on both supply and demand. Supply-side actions will include a reorganization of the Global Sightholder Sales business unit. "With this review of how we are internally structured, we will create new, multifunctional teams within the organization so that agility and responsiveness is further hardwired into our activities." In a recognition that one-size-fits-all does not work, De Beers aims "to facilitate more tailored solutions, based on an enhanced knowledge of your individual strengths and opportunities" which will include "supply flexibility through our ‘demonstrated demand’ distribution system." Meanwhile, on the demand side Mellier stated that De Beers would continue to invest in non-proprietary marketing, or generic promotions, this year.