Shoppers in the Emirates cannot seem to get their fill of bling. Ahmed bin Sulayem, the executive chairman of the Dubai Multi Commodities Centre (DMCC), discusses what it took for Dubai to rise as a global diamond trading hub, doing about US$40 billion (Dh146.92bn) of business last year.
Give us an idea of Dubai's growth in the diamond trading business.
The DMCC story started in 2002. Before the establishment of the DMCC, the diamond trade in Dubai was worth around US$2 [million] to$3m … and we expect the numbers that come out of 2011 might well be over $40bn. And you are talking about an initiative that did not even start 10 years back.
What attracts "diamonteers" to Dubai over the traditional centre of the diamond trade - Antwerp?
In the last 20 years, the diamond trade has become more diverse, but the authorities [in Antwerp] are not accepting that new look. Africans have no chance of setting up offices there. The Indian and Lebanese communities have seen a bit of hostility when it came to Antwerp.
The diamond trade moved from Amsterdam to Antwerp on the basis that there are no taxes on the trades. I would have expected Antwerp to match what Dubai provides, to stay competitive, but I didn't see that. They hiked the tax rate, and big players that have always been committed to Antwerp are moving off now.
How does Dubai work with India, a giant in the diamond industry?
I'm not there to take the manufacturing from Surat.
The cost is still no comparison. Dubai is more about trading, and Indians will likely have branches here. They've made their money and grown, and the next step is expanding and being closer to the GCC as a consuming market, with a very strong focus on Saudi Arabia, particularly Dammam and Jeddah.
For a very long time, they called the DMCC diamond success story an Indian story. They no longer say that. We have a very diverse number of diamonteers. This year we anticipate to capture well over 200, which would make the total of diamond companies 1,000.
How has the recession played into the DMCC growth story?
Living in Dubai is not an issue as it was before. Before the recession, it was much more difficult. You couldn't find residential units. Now it is a great opportunity to set up shop in Dubai.
That played a big role. We took advantage of that, big time. There is not one year that passed during the recession where I did not do one or two road trips to Antwerp or other diamond centres, just to make sure they know we're here, and we're still moving. And that paid dividends.
We moved into Almas Tower [in Jumeirah Lakes Towers] in 2007. A lot, if not most, of our members moved in, too. We were blessed with the timing. In a recession, the diamond industry is usually the first to suffer, as people move from luxury to necessity. But the last instalments for Almas Towers were paid up before the property market was hit.
* Florian Neuhof