Claudia Bompani from Irresistible Rough Diamonds
Forging transformation in the diamond sector through nurturing carefully selected small businesses, De Beers takes a hands-on approach that adapts to past experience.
This has led the company to extend its support beyond the cutting and polishing segments, and into manufacturing and jewellery, according to De Beers Beneficiation Manager Kagiso Fredericks. The first cohort of De Beers Beneficiation Programme, which graduated in 2019, took five cutting and polishing SMMEs through an intensive three years of incubation, training and mentoring.
As a leading supplier of rough and polished diamonds, De Beers established the Beneficiation Programme on the basis of its key role at the beginning of the diamond value chain, he explains. However, Fredericks emphasises that the cutting and polishing of rough diamonds is only one next step in a longer journey to the end-customer.
“When we consider the scope for beneficiation, our focus is really on value addition – so the programme could cover design, manufacturing and all the other phases through to retail,” he says. “Our 2020 cohort therefore included a jewellery manufacturing and refinery business and also jewellery designers and retailers.”
An essential aspect of this programme, he says, is to encourage participants to sharpen their vision and value proposition – to differentiate themselves in the marketplace and clarify exactly what business they are in. This has led to exciting results during the three year incubation period. A refining business in the programme, for instance, explored ways of adding value to its business model.
“As a refiner, you are limited considerably by the market price of the commodities you refine,” he explains. “This business saw the opportunity to expand into jewellery manufacturing as it was already dealing with the raw material, but could achieve better margins in the jewellery space while diversifying their customer base.”
By emphasising that business success is built on a clear strategic focus, the Beneficiation Programme has seen remarkable innovation in business models in the diamond sector. A company in the current cohort was initially involved in trading diamonds, with the owners being well endowed with cutting and polishing expertise.
“The trading environment, however, is extremely competitive – with many people equipped with the necessary skills of cutting, polishing, identifying and valuing diamonds,” says Fredericks. “This company therefore explored how they could create a niche for themselves, and evolved into educating diamond buyers. This training focus suited their skills, as one had been a trainer and the other a student in the De Beers-sponsored Kimberley International Diamond and Jewellery Academy.”
Important learnings within this incubation are issues that are very specific to each business – such as succession from one generation to another. A mother and daughter team tackled this daunting task and – with support and guidance – managed to transition to the daughter taking over as CEO in a business started by her mother.
“It is impressive to see the growth of the people within these businesses, taking on more responsible roles and talking in the media about their work and offerings,” he says.
The programme’s adaptation to include other phases of the value chain has opened doors to collaboration between the participants, he notes. The cutters and polishers are able to work closely with jewellery manufacturers, for example, in co-creating the magic of the final items.
Another of the companies in the programme began in the trading of rough and polished diamonds, and has also been able to branch out through strategic targeting of new markets. He highlights that being a trader did not preclude them from developing and marketing jewellery into selected markets – including high-end items for corporate long-service awards.
“Every business and entrepreneur is unique – just like diamonds,” he says. “One of our participants in the cutting and polishing trade has been able to develop her own direction by matching her interest in art with her work in diamonds.”
This is leading her to engage with artists and art studios, to curate art that speaks to the diamond story. This innovative angle is a very fresh concept, he says, but will see its expression during 2024.
Despite the competitiveness of the diamond cutting and polishing, the programme has been able to help those participants in this trade to grow turnover significantly during its second year. He explains that after the first year of establishing commitment, De Beers supplies rough diamonds for year two.
“Even with their better turnover, our emphasis remains on helping the SMMEs build a healthier bottom line,” says Fredericks. “This really underpins our work, as the vision is to create sustainable entities that will transform the sector while meeting participants’ diamond dreams.”