Brent Eiseb, NDTC's new Chief Executive Officer, sets his goalpostsJuly 01, 19
Brent Eiseb, a 24-year veteran of the diamond industry who has risen through the ranks of the Namibia Diamond Trading Company (NDTC) who was recently appointed as its new Chief Executive Officer, gave an extensive interview to the Windhoek Observer, saying that in the previous 11 years since the establishment of Namibia Diamond Trading Company (NDTC), the firm has successfully executed its mandate of sorting, valuing, selling and marketing of rough diamonds mined by NAMDEB Holdings while ensuring downstream beneficiation makes a positive impact on the lives of ordinary Namibians.
Eiseb reported that the NDTC had sold diamonds worth over N$30 billion to Namibian cutting and polishing factories since its inception in 2007. He said 17 million carats of rough diamonds have been sorted, valued and distributed by the company, with N$1.5 billion paid in corporate taxes and N$1.2 billion in dividends declared to government.
"NDTC has and continues to play a major role in the establishment of a sustainable, resilient cutting and polishing industry that directly employs over 1,000 Namibians. It is evident from the above, that NDTC is well-placed to continue to successfully fulfill its mandate and to create value for its shareholders and stakeholders," he told the Windhoek Observer in an exclusive interview.
He, however, acknowledged that the requirements and pressures on the business have changed, with the company now required to split 15 percent by value of diamonds and offer them for sale to NAMDIA.
"Increased amounts of rough diamonds made available for sale locally requiring us to split off and prepare a larger proportion of Namibia's production for offer to NDTC Sightholders, value the entire +10.8ct diamonds in Namibia, a position which has forced the company to establish a specific department equipped with the latest technology and appropriate skills to ensure this is done properly in Namibia. This will be done in line with the new Namibian sorting, valuing, sales and marketing agreement between the Namibia and De Beers.
"This, coupled with the ever-changing business environment because of increased volatility in the global diamond industry, means there is a definitely a need to constantly look at how NDTC delivers against its strategic objectives. Like any other business, NDTC is also under pressure to deliver more with less and as such, we will be looking at how we can deliver the strategic objectives efficiently," he told the Windhoek Observer .
On the impact of the turbulence in the global diamond industry which has witnessed a decline in prices and decreased demand from key markets such as the United States, Eiseb said, "We are currently navigating our way through a challenging period in the midstream of the diamond industry, however, we anticipate that the key issues will be short term.
"The challenges that we currently face are mainly because of polished inventory overhang, tight liquidity in the midstream and tight margins due to a sustained reduction in the prices of polished diamonds. In addition to this, the trade tariff standoff between the USA and China, two of the biggest diamond jewelry consuming markets, is impacting sentiment and confidence in the industry.
Eiseb told the newspaper that he believes that lower rough diamond sales over recent months coupled with robust retail demand in the key market of the USA, accounting for approximately 50 percent global diamond jewelry demand, should aid with addressing the challenges in the short to medium term. "On this basis, we remain cautiously optimistic about the sustainability of the business and the industry at large, "he said.
The NDTC CEO ruled out on the possibility of NDTC localizing its diamond auctions, following in the footsteps of Botswana.
"NDTC's rough distribution strategy is based on what is commonly referred to as the Sight system. This Sight system is premised on NDTC entering into long-term supply contracts, typically 3-5 years, with its customers. In addition to this, NDTC provides its Sightholders with the ability to plan the delivery of its allocation over a 12-month period. We believe that this coupled with the regularity of supply enhances the planning capabilities of the ND TC Sightholders thus improving supply chain efficiencies while giving them a longer planning horizon," he said.
"One must also take into consideration that NDTC Sightholders have and continue to invest in infrastructure and technology in order to improve the sustainability of their Namibian factories and it is therefore important that the rough diamond supply is not only regular but is dependable over a longer period. On this basis it is clear that the current rough distribution model is aligned to and fully supportive of NDTC's mandate of facilitating downstream beneficiation in Namibia and as such there is no intention to move away from this.