ODC revenues top P5billion
Keikantse Lesemela | Friday January 23, 2015 17:58
ODC stakeholder relations executive, Kutlo Thathana told BusinessWeek that in 2014, which was their first full year of operations, they refined their business and grew the customer base in the global market.
“Operationally in 2014 we were able to embed and refine our business, grow our customer base and establish ourselves as a reliable and important source of supply to the global market,” she said.
ODC was entitled to 13 percent of Debswana production last year, one percent up from 2013. As per the 2011 agreement, the supply of the diamonds increases by one percent annually, until it reaches 15 percent by 2016.
“Our sales result reflects the fact that we were able to offer our customers regular access to scale supply of Botswana’s diamonds throughout the year, and that we enjoyed healthy customer participation and high sales,” said Thathana.
Viewings for the first 2015 auction started on Monday and are expected to finish on the 28th with auction scheduled for the next day.
Last year ODC said that is was planning to introduce fixed-term supply contracts in 2014 to become a direct competitor to De Beers.
Currently, the fledgling state-owned diamond company only sells through auctions.
The decision by ODC to venture into contract sales will see the company competing directly with De Beers, which sells 90 percent of its $6 billion a year supply to handpicked, contracted buyers known as sightholders.
Thathana explained that ODC is now reviewing the fixed term contract supply for 2015 and 2016 based on latest supply forecasts.
She said based on customer feedback, they did not feel ODC had sufficient volume to set aside supply for contract sales in 2014 without compromising spot auctions. “We recognise the importance a number of customers place on regular committed supply arrangements and it remains our long term intention to introduce contract sales to complement our regular spot auction sales. We will continue to engage with our customers and keep them informed of any developments,” said Thathana.
De Beers sold 19 million carats of diamonds in the first half of the year, including about 900,000 carats of Debswana’s supply to ODC.
ODC buys partially sorted diamonds from De Beers Global Sightholder Sales (DGSS) and then sorts the goods into its own sales assortment before inviting its customers to view and purchase the stones through an auction process.
On average Okavango sells about 250,000 carats of rough diamonds per auction with projected annual sales of about $400 million (P3.5 billion) and buyers from Botswana and all over the world can participate in ODC’s sales and access Botswana diamonds at market-determined prices.