De Beers’ Namibian unit offers 240k ct to Namdia, local sightholders

The Namibian government said more than 240,000 carats of Namdeb run-off mine were offered to Namib Desert Diamonds (Namdia) and local sightholders at a value of $360 million in the 2017/18 financial year compared to $292 million in the 2016/17...


Mountain Province announced results of its third diamond sale of 2018

Mountain Province Diamonds Inc.  announced the results of its recently completed third diamond sale of 2018.


Fura Gems Inc. aims at expanding the coloured gemstone business in India

Fura Gems Inc is aggressively looking at organizing the $2 bn gemstone market globally and is targeting a market share of 8% - 10% in the next 3 years.


ALROSA reports Q1 2018 production and preliminary trading performance

ALROSA Group’s diamond production for Q1 2018 totalled 7.4 million carats, down by 17% year-on-year.

20 april 2018

Forevermark supports women advancement

Forevermark, the diamond brand from the De Beers Group of Companies, promoted gender equality and displayed its stunning Red Carpet Collection 2018 through a unique fashion show of models and women achievers on 18, April at the Four Seasons Hotel, Mumbai...

20 april 2018

Panama is a gateway to the jewelry market of Latin America

23 january 2017

mahesh_khemlani_xx.jpgArmed with a Finance and International Business degree from Ithaca College, a Master’s in Business Administration from Universidad Adolfo Ibáñez in Chile and a Master’s in Public Administration from the Kennedy School of Government at Harvard University, Mahesh Khemlani, the President of World Jewelry and Diamond Hub-Panama is a businessman in his own right.

His many stints include Vice President of Finance and Business Development at Optynex Telecom; a member of the Technology Investment Banking Group at CIBC World Markets; and a financial analyst at Standard & Poor's Portfolio Management Data Group; and at Grupo VerdeAzul, a private investment firm in Panama, where he is currently Chief Investment Officer. Mahesh Khemlani also has an extensive background in business and government. He spent six years at the Ministry of Economy & Finance of Panama, most recently as Vice Minister of Finance.

In an interview with Rough & Polished, Mahesh Khemlani speaks on a range of issues, including the current status of the WJDH, the global diamond industry, LGDs, generic diamond marketing and millennials.

It’s about two and a half years since the launch of the World Jewelry Hub; and the second phase was due to be completed by the end of 2017. Is the project progressing as per planned expectations?

The project is progressing nicely and we receive several inquiries about our platform every month. We continue to accept applications from potential members of the World Jewelry & Diamond Hub, Panama. Similarly, we also continue to see several license requests from our members to operate in the free trade zone where our facility is located.

This interest continues to come at a complicated time for our industry. Tightened banking regulations worldwide have not only contributed to a reduction in trade facilities for manufacturers but also in difficulties to open basic operating accounts. Thus, the interest in our platform described above did not always translate into business opportunities for those interested in establishing operations in the World Jewelry Hub. It is for this reason that Phase 2 of the project is on hold for now. We will continue to promote the World Jewelry & Diamond Hub Panama and increase membership and tenants of our facility until the need for a phase 2 becomes evident.

What is the status of the project? Is the project still open for potential office space buyers? Considering the slowdown in the global gem and jewelry industry, some feel that the project was initiated at a wrong time. Your comments.

Hindsight is always 20/20. Even with all the obstacles that we have encountered, our project continues to grow. We are leasing office space instead of selling as a way for international companies to test the market with a small investment. Once the value proposition becomes clear and the market matures, we will proceed to sell space to interested buyers. I must say however that this is not an immediate priority. 

Regarding the timing of the launch, our industry is no different than any other. It goes through economic cycles of boom and bust. I expect we will emerge from this recessionary industry cycle much stronger and consolidated than we are today.

WJ&DH reportedly had plans to create dedicated areas specifically for jewelry manufacturers who can enjoy the benefits of the free zone as well as have immediate access to raw materials. How is that shaping up; and what other new facilities are being offered? What is the volume of exports recorded till today?

The WJ&DH is engaged in an ongoing dialogue with the authorities of Panama and has identified the opportunity for our members and tenants to engage in light manufacturing of jewelry using materials imported to Panama and thus, benefit from trade promotion and free trade agreements that the country has negotiated. Basically, this allows for finished jewelry to be imported to important markets without paying any import tariff or duty. We ran a successful pilot with one of our members and were successful in achieving this. This represents a large opportunity for those companies that already do some setting and assembly in other markets to benefit from a reduction in their cost of doing business. Given that this initiative has just been identified, the import and export figures are not significant yet.

The role and empowerment of women in the Latin American jewelry and gemstone sectors looks to be an important focus in the industry. How successful is this WJ&DH initiative? 

As a Bourse, we always understood that if we want to succeed we must promote an inclusive industry. In the 37th World Diamond Congress in Dubai, Ali Pastorini (Senior Vice President of the WJ&DH) and I participated and noticed the lack of young people and women in the Congress. I even mentioned during my address that the industry is not yet an industry of inclusion. It is odd that women do not really have a voice in the sector, while they are yet the greatest consumers of jewelry in the world. Ali Pastorini is heading the Mujeres Brillantes initiative that started last June (2016) in Panama City during the Second LATAM Diamond & Jewelry Week. Four months later, Ali travelled to Bogota, Colombia for the second meeting of this organization. In a short period of time, this group already counts with 100 members and a channel on YouTube called Mujeres Brillantes with professionally produced content. Judging by the achievements of the organization I have no doubt that they will generate more opportunities for women in Latin America and worldwide. As for me, I am very happy to help to open the doors for these incredible women.

What is the current size of the Latin American jewelry trade; and what are the long-term prospects of the trade? And how encouraging is the economic realities facing the industry in the region?

The current market for jewelry and gemstones in Latin America is estimated to be more than U.S $ 8 billion with 11,500 jewelry stores across the region. This is a region that according to the IMF will contract by 0.5% in 2016, marking two consecutive years of negative growth for the first time since the Latin American debt crisis of 1982-83. Having said this, it is a region with less than half the population of China yet more than half of its GDP. It is a region with macroeconomic fundamentals that lean towards a growing middle class in fiscally conservative democracies. In other words, the countries in the region should display increasing demand for diamonds, jewelry and colored gemstones as income levels of the general population continue to increase.

What development has taken place since KP Chair Ahmed Bin Sulayem’s visit in terms of increasing cooperation between the WJ&DH and the Dubai Multi Commodities Center? How do you think developments in the Kimberley Process could be enhanced, specifically in Latin America?

Mr. Bin Sulayem’s visit to Latin America will result in the reintegration of Venezuela to the KP and consequently to rough diamond trading. We were very happy to host him in our Bourse as he acknowledged the potential of Latin America as a platform and the similarities between Dubai and Panama as natural hubs for their respective regions. We will continue to learn from their success and welcome companies that are registered at the DMCC to use the WJ&DH as a gateway to the Latin American market.

The Diamond Producers Association has taken initiatives in generic diamond marketing and promotional campaigns; but how important is it that stakeholders down the pipeline should also participate? Your comments.

We congratulate and support such initiatives from the DPA. It is very important that the entire pipeline participate so that they are able to understand how best to position diamonds in this new market environment where experiences and journeys are prioritized over material possessions. The DPA’s recent platform “Real is Rare” does a great job at engaging the millennial customer and positioning diamonds to represent the real connections that we as humans make. These initiatives are increasingly important as a traditional generation of diamond buyers ages and a new one emerges.

Lab-grown diamonds; mixing of synthetics, etc., are a bane to the diamond industry, especially in regions which deal with smalls and melees. Any suggestions on how the industry could tackle this problem and protect consumer confidence in diamonds?

Our Bourse maintains the same opinion regarding this subject - lab-grown and synthetic diamonds are not a substitute of natural diamonds. Synthetic diamonds are legitimate but they should be marketed as a separate product. In other words, they should influence diamond prices no differently than colored gemstones or pearls are able to affect prices. Most importantly, they should always be identified as synthetic if they are to be marketed to customers at any exchange and even in retail environments.

Regarding consumer confidence, it is imperative that synthetic diamonds not be mixed into parcels with natural diamonds. Bourses should not tolerate it if members do not adhere to this rule and it should be cause for immediate expulsion.

Millennials are presumably not interested in buying diamonds. Besides, they feel strongly about environmental damage, blood diamonds, etc. Is the future of the diamond industry in stake here? Your take…

According to DeBeers data, in 2015 millennials spent nearly $26 billion on diamond jewelry in China, India, Japan and the United States, 45 percent of the total retail value of all new diamond jewelry that year. This makes them the largest group of diamond retail consumers. As I mentioned earlier and the DPA has cleverly ascertained, Millenials will continue to buy diamonds to cement the memories of life’s most memorable moments.

According to you, what is the current situation of the global diamond industry and how do you foresee growth in the next few years?

There is still strong demand for diamonds in the United States while China and India are showing signs of weaker demand. I believe that tighter borrowing standards and increased reporting requirements for midstream players will place some pressure on this segment of the market. This pressure will also come from retailers who will demand more credit and value added services in terms of design, delivery and packaging from them. There is one trend in the diamond industry that I believe we should pay particular attention to. It is the increasing importance of women in the global workforce. This trend is likely to lead to more millennial women purchasing their own diamond jewelry. Another trend that is unlikely to reverse is that consumers will continue to demand ethically mined diamonds from legitimate sources. As with any technology, the cost of producing synthetic diamonds is likely to reduce and the process is likely to improve. Overall, the entire supply chain should jointly invest in developing demand with new consumers. If this occurs, growth should be healthy at around 2-3% a year driven primarily by the US consumer.

Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished


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