PHILIPPE MELLIER: 'RELATIONSHIPS ARE KEY TO SUCCESS IN THE DIAMOND INDUSTRY'

Pointing to De Beers' relationships with Botswana, its Sightholders and consumers, De Beers Group CEO Philippe Mellier called on the industry to "build on the firm foundations we have established, continue to invest in the outstanding relationships that have brought us so far and ensure we keep on working together for our mutual benefit," during a speech he gave at a dinner in Gaborone last night in the presence of senior representatives from the Botswana government, De Beers' Sightholders and leading figures of the Gaborone business community. The dinner took place during this week's De Beers Sight, its first of 2014.

De Beers and Botswana

During his address, Mellier paid tribute to the company's 40-year relationship with the government of Botswana and said that the relocation of De Beers' international Sightholder sales activity last year has stimulated economic activity, which has elevated Botswana "from being a primary producer with a maturing manufacturing sector into one of the world's key rough diamond trading destinations."

Listening to Sightholders

Turning to the company's relationship with its Sightholders, Mellier stated that it has been central to key developments in the history of diamonds, whether it is catalyzing growth in beneficiation or growing demand in new consumer markets. "Southern Africa has become the new center of gravity for the diamond trade and the relationship between Sightholders and De Beers has been fundamental to this shift," he said.

Citing the importance of relationships evolving and adapting, Mellier revealed that De Beers has been looking at a number of new ways to strengthen its future relationship with Sightholders. "We have listened to Sightholders' views on how best to do this and will focus on simplifying the process where possible, giving Sightholders greater flexibility and making Sightholder status even more meaningful."

Recognizing Varda

Mellier also praised Varda Shine, outgoing Executive Vice President of De Beers Global Sightholder Sales, as someone "who has been central to every Sightholder relationship." Taking the opportunity to raise a toast to Varda, Mellier said "a huge thank you for thirty years of outstanding service - not just to De Beers; not just to the Sightholder community; and not just to the people of Botswana and De Beers' other producing country partners; but to the entire diamond world."

Continued Mellier in his speech: "Varda, you have left an indelible mark on the industry and it is undoubtedly a much better place because of your influence. Thank you for all that you have done for us, and our very best wishes go with you for whatever the future holds..."

De Beers and Consumers

In his address, Mellier noted that perhaps the most important relationship is that between the diamond industry and consumers. "Ultimately, a consumer's desire for diamonds is the only true source of value in the industry," he said.

Turning finally to the outlook for diamond jewelry, he noted that there are good signs coming from the U.S. economy, with improved demand in evidence over the holiday period. Looking east to China, he said there are also healthy signs with a positive outlook for sales around the Chinese New Year and expectations for a continuation of strong economic growth, at around the same level seen in 2013. However, he also warned that, despite solid prospects for India in 2014, there remain some concerns about inflation and currency volatility in the short term.

In closing, Mellier said that "if we continue to nurture the relationships on which our success is based, then we will also make sure that diamonds remain the symbol at the center of a consumer's desire."