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‘Dubai has proven to be a great port for diamond tenders’

16 december 2019

bhavesh_javeri_xx.pngStargems, which was established by Shailesh Javeri in 1981, has been involved in the trading of rough diamonds and is now also into manufacturing, wholesaling, retailing, tendering of diamonds and diamond jewellery.

Although, the company has operations in Antwerp and Hong Kong, among other global centres, it is convinced that Dubai is a “great port for diamond tenders”, according to company managing director Bhavesh Javeri in an exclusive interview with Rough & Polished’s Mathew Nyaungwa.

He said Dubai’s diamond trade had been growing by leaps and bounds over the years and is committed to setting the standard for secure diamond trading in line with the highest quality standards.

Javeri also said that Stargems ethically sources stones for tenders from several sources, although prominent sources were Angola, the Democratic Republic of Congo and South Africa.

Below are excerpts from the interview.

What sort of services do you offer as Stargems?

Stargems is a global, vertically integrated diamond company with a 38-year legacy in the industry. The company specialises in the sourcing of rough diamonds; Stargems hosts diamond tenders for the distribution of these goods. Furthermore, Stargems is involved in the manufacturing and polishing of rough diamonds, as well as the wholesale and retail of polished diamonds and jewellery.

Why did you choose Dubai to conduct your diamond tenders?

Dubai has proven to be a great port for diamond tenders. Diamonds have played an illustrious role in Dubai's heritage as a gateway for global trade. In the last 20 years Dubai’s diamond trade (total import, export rough and polished) has grown from $3.6 billion in 2003 to just over $25 billion in 2018. Loose diamonds represent just under 5% of UAE’s imports and exports. Today Dubai is committed to setting the standard for secure diamond trading in line with the highest quality standards. The DMCC has investments in world-class infrastructure and services include the Dubai Diamond Exchange (DDE), DDE Vault, commitment to the Kimberley Process and so on.

Furthermore, the diamond hub of Surat, India is now linked to the UAE. What this means is that Dubai now has direct access to the world’s largest diamond polishing and cutting centres. Dubai offers ease of travel (direct flights, easy visa procedures), is time-saving (clients can participate in the tender and return to Surat in one or two days) and is cost-effective.

In addition, the proximity to the diamond mines in places like Africa and Russia, among others, makes it a preferred centre for the miners.

Is there a cold war between diamond hubs?

As with other industries, there is competition between the diamond trading centers with changing market dynamics. The diamond distribution channel is constantly evolving. While New York, Antwerp and Tel Aviv were the obvious destinations for the diamond business in the past, now Dubai, Hong Kong and Gaborone have increased their relevance. We have offices in Antwerp, Dubai, Johannesburg, Mumbai and Hong Kong. We go where the best commercial opportunities are. Healthy competition is always encouraged, however, I would not call it a cold war.

We are seeing how diamond trade is being split between old and new global hubs, including a historical retrospect of ups and downs in their trade in recent years and their current competition for diamond market customers. What is your comment on this?

The industry has seen a variation in financial assistance in different centers globally. We see a shift in trade to areas where more financing possibilities are available. However, such changes are part of evolving market dynamics.

How many African countries are bringing their stones to Stargems for sale?

Stargems sources stones for tenders from several sources, some of the prominent sources being Angola, Democratic Republic of Congo and South Africa.

What measures are you taking to ensure you are selling ethically mined diamonds?

The Kimberley Process was created in order to guarantee conflict free diamonds. It’s is a stringent certification system that attempts to stop rough diamonds from entering the global market illegally. We at Stargems ensure all our imports and exports follow the policies of the Kimberley Process and the World Diamond Council system of warranties very strictly. Moreover, we do due diligence on partners and only work with companies who deal in ethically sourced diamonds.

What is your assessment of the diamond market this year?

This year, there has been slowdown in the industry due to multiple factors. Socio-political issues such as the US-China trade war and protests in Hong Kong have added additional pressure to polished diamond demand. Jewellery retailers have increasingly made the choice to stock less and buy more goods on demand; this is in turn affected the polished diamond sector. The onus of holding inventory was left with the mid-stream, and coupled with a reduction in financial assistance in the industry this has hurt polish prices. However, manufacturing has come to a more sustainable level…

Your projection of the state of the diamond market in 2020?

We believe that the market will stabilise in 2020. Rough diamond prices have been corrected to sustainable levels with the current polished diamond prices.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished