De Beers Exec’s Discuss Prices, Forevermark and Future at Sightholder Cocktail

The DTC Sightholder Cocktail Party held Wednesday in London heard addresses from De Beers Chairman Nicky Oppenheimer, Managing Director Gareth Penny and DTC Managing Director Varda Shine. The managers spoke of the achievements of the group in 2007 and their outlook for the year ahead.

Nicky Oppenheimer welcomed guests by saying that 2008 will to be an important year for everyone present, not least with the beginning of the new contract period in April. He also added that, while he was saddened that certain companies would no longer be buying rough from the DTC, he said that it was exciting to welcome new players who “will add luster and vibrancy to the industry as a whole.”

Oppenheimer also spoke about the importance of the emergence of India, China and the Middle East as major diamond buyers and said that the fact that these “new” players will be a balance to the U.S. should give the industry confidence.

In his address, Penny pointed out that, “As India and China continue to register outstanding economic growth, their demand for finite supplies of natural resources has resulted in higher resource prices.”

He went on to say that the industry must continue to instill confidence in the consumer to uphold and protect the reputation of diamonds.

Shine highlighted the new commercial strategy for the DTC in her speech, one that aims to support De Beers’ overall strategy of growing demand, improving pipeline efficiencies and adding value to diamonds.

“This commercial strategy has resulted in a new structure for the DTC,” she stated. “We are now a family of companies…focused on two goals – working with those clients best able to add value to the diamonds we sell and helping our producer partners to achieve their legitimate aspirations to create sustainable downstream diamond industries in their country.”

She also cited as reason for the new Sightholder contract process a desire to build “a more mature partnership between the DTC and its clients. One based on greater transparency, on mutual understanding and on [mutually beneficial] commercial opportunities.”

“Over the next few months the DTC will communicate the way in which it offers those goods that do not lend themselves to distribution through the ITO system such as Sight buy-backs, refusals and other goods…We are already considering a wide range of options, and, as we move into the new contract period, we will be reviewing the way in which we offer ex-plan goods for sale. At this stage, we are not ruling out any options” she said.

Shine gave an update on the changes in Forevermark. The new De Beers Group Marketing will build and develop Forevermark, which will become a universal brand.

Her final point was on pricing. “As we did in the second half of last year, we will continue to have a more dynamic approach to pricing and will review our prices on a Sight by Sight basis. We will communicate price changes at 3 touch points throughout the year; in February, during our annual results meeting, and ahead of the 2 major trade shows of Las Vegas and Hong Kong,” Shine concluded.