Company Announcement - De Beers’s relocation from London to Gaborone has gone seamlessly in so many ways. This is the firm assurance from Paul Rowley, Executive Vice-President Global Sightholder Sales. “Actually, started probably two years ago in reality, when we sent the quality assurance and aggregation teams ahead of the relocation itself, and then we kicked up obviously with the sale; really was a pilot back in November sight nine of 2013. But I think it’s pretty fair to say our Sightholder customers were pleasantly surprised, not only with Botswana itself, but also the whole relocation of the building, the atmosphere, environment, transparency, openness of the executive I think which they had – perhaps - not seen for quite a while back in London. So it gave a different feel to it.”

Benefits of relocation:
“Apart from the fact that we are seeing obviously 10 sights a year, with some 250 or so people coming into the country now. It’s also the knock-on effect: hotels, tourism, transport in general, banking facilities, the whole beneficiation has expanded in general with additional services of grading... We have also seen a knock-on sort of restaurants building up.  So, Gaborone is a bit of a hive of activity not just in the sight week itself; but probably in the week before and half or so.”

Rough Diamond demand in 2014:
“Just as we went into the very first sighting in Botswana, we saw an uptake in demand; we saw a bounce back from the fall back of 2013. As we came into the first quarter, we saw demand really picking up; largely to do with a good season in the States, a very positive selling season. And of course we saw a lot of activity in the build up to the Chinese New Year last year. Again we saw retailers looking to restock in Q1 and Q2.
“And then from an industry perspective, we saw a slow-down, that didn’t really come to impact the business till probably in the last quarter, and there we saw the markets starting to get a ‘little bit full of goods’ - for want of a better term. And we saw a little over run of polished goods over the year which saw ourselves slow down.

“But overall, it was a very good year for the biz.”

Outlook for 2015:
“As we move into 2015 what I am pleased to report.....is that indicators coming back from the season in America have been extremely positive. As we moved into Valentines Day and Chinese New Year...we remained hopeful that we will see these markets also perform as well over that period of time.

“What we haven’t seen yet this year is, perhaps, the exuberance of the restocking phase of Q1 of 2014...and we see this as a slightly different phasing period....and certainly as we go to Q2, we will expect to see manufacturing coming back to a more expected level of capacity...and we will expect sales to move in a pretty strong way and we’ve got good confidence for growth at a retail level during the year as well,” explains Rowley.

On Antwerp Diamond Bank (ADB) closure:
“The closure of ADB I think...wasn’t a surprise to begin with; we have talking about it for a long time. So I think most of our customers in the market in general and the industry were expecting an imminent closure. Like all these things, it is a fairly large expense to the industry around $1.5bn. But at same time, the bank has been very sensitive and sensible in dealing with our customers in extending good long-term overdraft facilities for transfers and migration to new facilities in other banks. And we have been quite fortunate over this period of time. We have spent a lot of time with some new banks coming into the system, and some of the more traditional ones have also taken on some of those accounts. “In addition to that, we are seeing Sightholders, thankfully, bring in some of their own liquidity into the market as well. So, although obviously there is an impact, I think it’s been fairly smooth over the period,” assures Rowley.

Liquidity:
“To so much extent on the liquidity issue.......the real impact came towards last quarter of last year. What’s happened post that is that finances started to come in; of course there’s been lot less rough coming onto the market. So the pull on the liquidity is eased.
“So actually at the moment, I would say we are in a slightly easier liquidity position; but still it’s a little bit sensitive.”

Sightholder Contract:
“It’s a year ago since we actually announced the criteria around the new Sightholder contract. The real drivers behind it were flexibility, very much a customer relationship-driven business, and moving away from some of the mechanics of the past. However, what we did we put into that was a strong financial compliance and governance and that requires gating.

Midstream trends:
“The midstream is quite a changing environment at the moment. We have seen manufacturing particularly in India; gravitate towards some very large engines - for want of a better term - operating out of Surat, who have become incredibly efficient. The big issue we have at the moment is more around effective distribution of the product after polish... so what we are looking for is greater efficiency on the one hand and really good distribution channels to market, on the other.”

Personal views on relocation:
“Personally for me, I am a big lover of Africa. I have lived in Africa for... probably around 25 years - on and off – so it’s nothing new for me. But what I think is really important is to welcome a lot of new individuals. You know we had some 83 individuals and their respective families; in most cases, have migrated from London to Africa. And generally speaking, they have settled incredibly well. We have only two people - in effect - out of the original 83 that have departed, and both on understandable grounds. So, I think overall, a great success and we are enjoying very much (as well) the integration into the community in Botswana.”