Every new Sightholder contract period has brought its shifts and changes. But this time, despite prior anxiety, things have passed rather quietly even though the Diamond Trading Company is shedding 25 percent of its current clients and sharply reducing the total number of Sightholders by 20 percent.

 

 

“It's completely aligned with Supplier of Choice,” Shine said, adding that as before, the change rests on two pillars: consumer demand and diamond suppliers – their clients. She says that during the evaluation process of their future clients, she saw how transparency and professionalism have increased and that there has been a greater focus on consumers, which is the mainstay of SoC.

 

The most recent application for the 2008-2011 contract period was less oriented toward “getting to the consumer,” than in previous applications. It was instead focused on adding value, with the DTC concluding that efficient rough sales could be conducted in several ways. While not willing to comment on who is on the list, the list is known to include both diamond dealers and “preparers,” which specialize in turning rough diamonds in hard-to-polish shapes into cut diamonds that are easier to polish.

 

Another change mentioned by Shine is that in their applications, firms were required to detail what they planned to do with each item they were requesting from 16 bands of goods the DTC offers. “We asked them to make us a proposal in the bands. It wasn't a generic request [on their part]. That helped us put the right goods in the right hands.”

 

The DTC took it even further saying that, “A marketing campaign did not give an automatic scoring [on the application]. Now give us a business strategy that includes details on how you plan to use the goods.”

 

While rejecting talk in the market that the human aspect of the selection process included decisions on the allocation of specific goods (keeping to the computerized system also used during the last selection process), there were some rules that were set six months before the final decisions were made, a geographical spread, for instance, of allocations.

 

The carved up list, 75 Sightholders – 79 including Sightholders in Botswana, Namibia, South Africa, Canada and London (sans duplicates) is, as noted, a far shorter one. Not only is the DTC losing its Alrosa supplies, it has also sold a number of producing-yet-losing diamond mines in South Africa.

 

“We are committed to $300 million [in supplies] to Namibia, about $500 million in Botswana, some $500-$600 million in South Africa – that is $1.3-$1.4 billion in goods. We don't have the availability anymore and they were out-competed,” she says about the Sightholders whose contracts were not renewed.

 

In a show of support for those Sightholders, Shine expressed sorrow, adding that they are all good businesses. In a media release on the morning of the announcements, the DTC said it is “investigating ways in which it can retain its valued relationships with current Sightholders” that are now off the list. The statement led to hopes that the de-selected Sightholders would get some sort of supply. That will not be the case.

 

While specific plans are not expected to be announced until February 2008, this support may include some sort of accreditation program. A source at the DTC revealed that these are firms that “meet BPP (Best Practice Principles), are high-quality, fantastic companies. DTC is putting its name behind them.” Possible ventures may include cooperation on Forevermark programs, for example.

 

Regarding Forevermark, the program is run now by the new De Beers Marketing Group and not the DTC. Forevermark is a program of marking diamonds sourced from De Beers that were polished according to DTC guidelines to ensure high ethical standards, thus driving a premium. Plans are underway to extend the program to non-DTC goods and non-Sightholders, providing that they are BPP compliant. Here too, plans will be announced in February.

 

One issue that seems to have escaped the radar screen is the fact that the DTC has not had a sales director since Des Cavanagh retired at the end of September. The DTC is seeking one, and has even published an ad, but so far no one has been chosen to fill the post. It is understood that there is no “home grown” candidate and that the company is in fact considering hiring a person from outside the diamond industry.