Image: Ellen Joncheere (HRD) – HRD sale

The HRD rejects the bid of ex-CEO Peter Meeus, even though he is paying the right price. The focus now goes from an HRD sale to the restructuring plan of his successor Ellen Joncheere.

The search for a buyer is put on hold“, says spokeswoman Margaux Donckier of the Antwerp World Diamond Center (AWDC), the umbrella organisation of Antwerp diamond and the mother company of diamond certifier HRD. “The HRD will fully concentrate on the restructuring plan of brand new CEO Ellen Joncheere“, it reads. Donckier does not exclude that after the implementation of the plan – “if HRD becomes attractive again” – there will be another (partial) HRD sale.

Peter Meeus, the former HRD top man who this week made a second bid of 51 percent on the heavily loss-making HRD, is severely disappointed. He speaks of a ‘strange’ decision. I met 100% of the asking price and all the conditions. On Thursday evening I was told in two lines that my bid had not been accepted.

Meeus says he always found it strange that at the end of last year, in the middle of the sales process and two weeks before the first bid, HRD hired a new CEO who had no experience whatsoever in the diamond sector. “That criss-crossed the whole acquisition process in a peculiar way.

The HRD lab and research centre specialises in certifying and inspecting cut diamonds and jewellery. In its centres in Antwerp, Istanbul, Dubai and Mumbai, HRD issues some 120,000 certificates each year, which include details of ‘the four C’s’ – cut shape, carat, colour and clarity. At its peak in 2005, this figure still stood at 240,000.

HRD also organises training courses and develops microscopes and detection material to screen the authenticity of diamonds. HRD has about 100 employees in the Middle East, about 90 in Asia and just under 70 in Antwerp. In 2018 it recorded a loss of 4.2 million euros on a turnover of 9 million euros.

Ellen Joncheere, the current CEO of HDR, does not want to say whether jobs are disappearing. “A restructuring plan doesn’t necessarily mean a downsizing. We are looking at how we redirect functions and activities. There is a shift of the market to Asia and the Middle East, Antwerp is structurally in trouble“. To get HRD out of the slump, Joncheere wants to focus on research, marketing, new training programmes, certification of jewellery and synthetic diamonds, certification apps and storytelling via social media.

“HRD has been too introverted for far too long.”

But worldwide, it’s still a strong brand name. Our brand is worth something. That is what the interest of the prospective buyers proves”. In addition to Meeus, Israeli Sarine Technologies and Serge Couvreur, also an ex-HRD director, made an offer last year, when the possible HRD sale was announced. These were not accepted either.

Joncheere sees potential growth in Dubai and Mumbai in particular. “Last year we grew 25 percent in India. This year we are aiming for the same, although we fear for the impact of the corona crisis. India exports 30 percent of its diamonds to China.” Joncheere also wants to put more effort into jewellery certificates. With the rise of synthetic diamonds, more end customers are asking for certificates because they want to know what they are buying.

Some claim that HRD is being prepared for the International Gemological Institute (IGI), a certification organisation for diamonds, stones and jewellery that is anchored in Antwerp and owned by the Chinese company Fosun. IGI announced its interest in HRD last year, but did not submit a bid.