NDTC upbeat on diamond sector prospects
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21 April 2017
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Namibia Diamond Trading Company (NDTC) is upbeat about the prospects of the global diamond sector this year, amid increased demand for the precious stone. This comes as the local diamond seller, a 50/50 partnership between global diamond miner, De Beers, and the Government of Namibia, says it has been witnessing increased demand for its stones over the course of the year.

“In the three sales we have had in the year, we have noted healthy high demand and hope demand will remain for the rest of the year,” NDTC Chief Executive Officer, Shihaleni Ndjaba told a media briefing in Windhoek recently, without giving specific figures.

The statement by the diamond executive comes as the global diamond industry faced a turbulent 2015, where rough-diamond prices declined by 15-20 percent, attributed to depressed demand in China.

NDTC’s Senior Manager Sales and Marketing, Brent Eiseb, was also optimistic about the outlook of the sector.

“Demand was low in 2015/16, but we saw some stable demand coming through in 2016, and 2017 has been a stable year in terms of demand so far,” he said.

He noted that growth impetus for the sector could come from an unlikely source - the Trump administration’s proposed tax reforms in America, which, if passed, are expected to spur growth for the sector.

“Trump’s proposed tax reforms may help the diamond industry by allowing people to spend on luxury goods, and that should benefit the industry,” Eiseb said.

According to Bloomberg, lower taxes and more jobs in the US, translates into more disposable income which translates into more diamond purchases.

Eiseb said the local diamond sector had taken tough lessons from 2015 and was prepared for any would-be external shocks.

“It was a lesson, no one expected it. We are trying to mitigate the risks and prepare for huge external shocks and also trying to manage our diamond inventory better,” he said, adding that the company will look to push its generic marketing efforts to increase consumer demand. He said local polishers had the capacity to utilise their increased allocation under the revised sales agreement between Government and De Beers, where higher grade diamonds worth N$430 million will be made available.

“The capacity exists on the ground. We are not concerned about the lack of capacity,” he said, as local polishers had started accessing larger carat stones.

According to NDTC, the company has since the advent of beneficiation sales in 2007, sold close to N$26 billion worth of rough diamonds to be cut and polished in Namibia, paid dividends of N$1,7 billion to its shareholders and paid corporate taxes of N$1,1 billion to Government .

Demand growth in China according to the Global Diamond report, is expected to resume a modest upward path in 2017, with the Asian giant and the US expected to remain the leading diamond jewelry markets, while India moves into number three ahead of Europe and Japan by 2020.

WINDHOEK OBSERVER

The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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