‘If diamond giants don’t adjust their business model, their time is up’

On September 30, Belgian business newspaper De Tijd published an article about HB Antwerp. The English translation of this article can be read here:

The Antwerp diamond specialist HB Antwerp and the Leuven inventors company Comate are jointly developing trackers that allow owners to trace the origin of their stones as far as the mine. “The time when diamonds were traded via envelopes is gradually over.”

The diamond business is known as a difficult tangle in which producers, traders, polishers, jewelers and other players in the supply chain demand a share of the pie. The fact that stones pass from hand to hand during the entire production process via simple paper wrappers or in envelopes only increases the risk of tampering.

The young Antwerp diamond company HB Antwerp developed a new method that should provide more clarity. Together with Comate, the Leuven engineering company in which Marc Coucke also invests, the company devised high-tech mini safes in which diamonds are safely stored. The metal capsules store all the crucial information about the path the stones have already traveled.

The essence

• The diamond specialist HB Antwerp and the engineering company Comate have jointly developed an innovative capsule in which diamonds can be safely stored.
• The innovation lies mainly in the fact that the capsules store all the information about the trajectory that the diamond has traveled since it was mined.
• HB Antwerp presents itself as an outsider who wants to shake up the Antwerp diamond industry by controlling the entire production chain and giving governments a larger slice of the cake.

HB Antwerp, which has exclusive access to a mine in Botswana through a deal with the Canadian mining company Lucara Diamond, previously entered into a partnership with Microsoft for the verification of the stones that are mined there. All data about the trajectory of the diamonds is stored on a blockchain.

“As owner, you can virtually track your diamond in real-time with the capsules,” say the co-founders of HB Antwerp Shai de Toledo and Rafael Papismedov. “Only those who have permission can open the capsule and access the information. That goes far. For example, the Internet of Things registers exactly where the diamond was found in the mine.”

Antwerp outsider

HB Antwerp, which was founded just over two years ago, presents itself as an outsider who wants to wake up the diamond industry. The company does this not only by managing the entire production chain from mining to polishing but also by exporting its know-how outside Antwerp.

The group is currently training students from Botswana so that they can work as tech operators or designers in their home country. This should also give HB Antwerp the opportunity to develop a complete ecosystem in Africa that benefits the local community, says Papismedov.

“Usually for many countries the story ends when the diamond is extracted from the mine. Communities generally do not see any return of the proceeds from the rest of the diamond trade. We believe that they should become the main beneficiaries. Because we can eliminate many intermediate steps by controlling the entire production chain, a larger part of the pie can be distributed among the local population.”

HB Antwerp’s work isn’t only based on goodwill. The group is paid commissions on, for example, the analysis and processing of diamonds and is growing at lightning speed. HB Antwerp last year clocked in at a turnover of just under 230 million dollars and a gross operating cash flow of 11.2 million dollars.

HB Antwerp recorded a turnover of 230 million dollars last year.

HB Antwerp’s model is a hit. In the margins of the General Assembly of the United Nations, the president of Botswana put forward the collaboration with HB Antwerp as a model for other African countries. The Botswana government had also cited the example of HB Antwerp in previous negotiations with the diamond giant De Beers to put pressure on the counterparty.

“The diamond giants will have to adapt their business model in order not to become outdated,” says Shai de Toledo. “Not only do governments want the way of working in industry to change, the population and consumers also want it.”