Rapaport News interviews Judy Meana, Vice President of the Panama Diamond Exchange on its growth and potential since it opened in April.
RAPAPORT… The World Jewelry Hub in Panama City was inaugurated in April as the first dedicated diamond, colored gemstone and jewelry trading center in Latin America. The development encompasses the Panama Diamond Exchange (PDE), which is intended to serve as a meeting point between global diamond suppliers and buyers in the region. Rapaport News spoke with Judy Meana, vice president of the PDE, about the significance of the grand opening and the associated Latin America Diamond and Jewelry Week:
Rapaport News: What’s your background and how did you get involved in the PDE?
JM: I began working as a TV journalist in 1994. I was 19 at the time, and the youngest person in Panama to be working as both an anchorwomen and a correspondent.
I then won a scholarship and studied TV news production in Spain. I returned to Panama and resumed my career in television. I served as news director of Channel RCM in Panama until 2004, when I was invited by the government to become spokesperson for the Minister of Government and Justice.
I actually worked for two governments, both headed by a different party. While working for the second government, I was asked to serve as the government’s chief spokesperson. I worked in that position for three years, coordinating the government’s program of communications, including relations with the local and foreign media.
When I left the government I wanted to enter the private sector, so I began working as a consultant with corporations, often on large institutional projects that involved the government.
Last year I was invited to speak to the PDE, which was looking for someone to head up its communications operation. I understood that it was a new project, but its growth potential was tremendous. The opportunity to be part of something that will develop into a major operation fascinated me and I accepted the job.
Rapaport News: What is your role at the PDE and World Jewelry Hub?
JM: I started out as communications director and was then appointed the PDE’s vice president in charge of marketing for Latin America.
The scope of the role is to plan, coordinate and head the communications operation in Latin America, where our goal is to instill in the public consciousness the idea that Panama is the primary trading center for gemstones and jewelry in the region. I’ve been traveling throughout Mexico, Central America and South America, meeting with members of the industry and serving as the PDE’s public face in the region.
Because the concept of what we’re doing is new to Latin America, I not only need to market the project but explain it as well, outlining its advantages and benefits.
Rapaport News: Can you give us an update on the development of the PDE and World Jewelry Hub?
JM: The World Jewelry Hub has been planned in two phases. The first phase is the construction of a two-story building, which will serve as the headquarters of the PDE, and provide office space for up to 69 companies and service providers.
The first phase was completed at the end of 2014. All available office space has been taken and the building is now in the process of being occupied. The PDE is already fully operational, including its trading floor. From a functional perspective this means that the World Jewelry Hub is up and running, including the Gemstone and Jewelry Free Zone that was declared by the government of Panama.
Office space in the first phase building has all been leased, while space in the second phase building is available for purchase. A substantial percentage of the space has already been sold, even before the start of construction.
Phase two of the project, which was unveiled during the grand opening event, will include a state-of-the-art multi-story tower with office space for hundreds of companies. Ground will be broken on the project in the next few months, and it should be ready for occupancy by the end of 2017. The tower will house the permanent headquarters of the PDE and will include luxury commercial space.
Rapaport News: What is the significance of the recent opening and associated jewelry week that took place?
JM: The opening was a high-profile event to mark the start of operations at the World Jewelry Hub with the inauguration of the hub’s phase one building. The event signaled the launch of the first fully-fledged diamond, gemstone and jewelry center in Latin America.
The opening was attended by Panama’s political leadership, including the President. The project has enjoyed strong political support from the start because it is regarded as an important initiative to strengthen Panama’s position as the business, financial and logistics center of Latin America.
However, we wanted it to be more than just a ceremonial event because ultimately, the hub is a place that has been designed to facilitate business. We initiated the first Latin American Diamond and Jewelry Week to bring together the suppliers and buyers who will use the complex as a regional and international trading center.
The response from the industry was tremendous and we were fully sold out.
Rapaport News: What were the key takeaways from the event?
JM: I feel that attendees left the event with a realization that the World Jewelry Hub, together with the PDE, is the primary location for suppliers of diamond, gemstones and jewelry to connect with key buyers from South America, Central America, Mexico and the Caribbean. We showed that we offer a secure environment to do business with all of the necessary services.
The event also showed that the project is already a reality. We are not asking people to imagine something that may happen, we are talking about the here and now. The World Jewelry Hub will certainly grow much larger, but it is already operational, providing the Latin American market with the type of facility that is standard in the U.S., Belgium, Israel, Mumbai, Hong Kong and Dubai, but never existed in this region.
Rapaport News: What added value does Panama offer the diamond industry?
JM: Panama opens up a market with a population of 600 million to the industry. This region has never been adequately tapped into by the international gem and jewelry trade, and has never been properly understood. There is a huge unrealized potential in the region. It is more politically stable today than ever before, and has a fast growing middle class with a rising level of disposable income and an appetite for luxury and brand-name goods.
Panama is a small country, but it is strategically located at the midpoint of the Americas. It is a major banking center, has a dollar-based economy and is quickly developing into a regional business center on par with Dubai or Hong Kong.
It is also a good place to do business. In terms of facilities, what we are establishing in Panama will be unparalleled in the Americas. The hub is located in an official Gemstone and Jewelry Free Zone, meaning that transactions are exempt from taxes and duties, and registered companies do not pay corporate taxes on profits.
Rapaport News: What has been the response to the development from jewelers in the region?
JM: It has been an interesting process. Given the general isolation of the region from the mainstream of the market, concepts that are familiar elsewhere are not necessarily understood here.
There has been an educational process, but we are definitely seeing the fruits of our labor. When we announced the opening of registration for the Diamond and Jewelry Week, the response took several days to build up momentum, but we then reached our capacity very quickly.
We are confident that we are the most important development to happen in the Latin American jewelry sector in many decades.
Rapaport News: How different is the market in Central and South America compared with the traditional jewelry markets in the U.S., Europe and Far East?
JM: The lack of a trading infrastructure has meant that the mix of merchandise in the region is different to that in the more developed markets. There is a relative preponderance for jewelry set with colored gemstones, but a lower percentage for jewelry set with diamonds, especially in the mainstream of the market. At the upper end, this is less pronounced.
Diamonds are not as readily available in the region and have consequently been less of a driving force. With the establishment of the World Jewelry Hub, with the PDE at its core, we believe this will change.
Rapaport News: What is the state of the jewelry market in Central and South America in 2015?
JM: When we last surveyed the market, we found that annual demand for jewelry and gemstones in Latin America was worth more than $8 billion, with jewelry being sold in more than 11,500 stores across the region. In addition, there are more than 320 mining companies and almost 750 wholesalers of diamonds, precious stones and jewelry operating in the region.
Those figures were valid about two years ago but the market has grown since then. Sales are likely quite a bit higher today and we expect the value of demand in the region to exceed $10 billion per annum by 2017.
Rapaport News: What are the biggest challenges facing jewelers in the region?
JM: Latin America covers a massive region, consisting of 20 countries and six dependent territories, mainly in the Caribbean. Therefore, it is difficult to talk of a typical market. The challenges facing jewelers vary greatly.
However, there are some common issues and we plan to provide solutions to many of these through what we are doing in Panama. One of the difficult aspects to manage in Latin America has been to establish a comprehensive and regular supply of jewelry and jewelry components, as is customary in the more developed markets, at prices that are competitive from an international perspective.
By creating a critical mass of people and merchandise at the World Jewelry Hub, we believe we have provided a solution to that challenge.
Rapaport News: What advice would you give to someone seeking to enter the Latin American market?
JM: Start your journey in Panama, at the World Jewelry Hub and the PDE.
Rapaport News: What is the long-term vision for the exchange and how do you expect the industry to grow there in the next 10 years?
JM: Our plan is to transform the diamond exchange into one of the world’s most important diamond bourses, and Panama into one of the world’s key trading centers. We believe it’s possible.