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CUTTING and POLISHING

The cutting and polishing industry is global in nature. It remains fragmented, with thousands of companies operating with multiple business models, including wholesalers, rough dealers, manufacturers and polished dealers, as well as combinations of these activities.

Recent years have seen the midstream sector coming under increasing pressure for a number of reasons. Rising inventory costs, and diamond banks’ drive to constrain the growth of their lending to the midstream, will mean financing costs are unlikely to decrease, particularly if the trend of low interest rates begins to change. Leading banks in the diamond sector have come to realise that they have been taking equity-type risks in the diamond midstream without getting the corresponding returns. This is now changing and, as a result, borrowing costs are going up while banks are asking their borrowers to professionalise their capital management.