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Articles from DIAMONDS BY CUT - BRILLIANT (ROUND) (283 Articles)

Non-sightholder businesses will now be able to purchase De Beers' rough diamonds
Non-sightholder businesses will now be able to purchase De Beers' rough diamonds

De Beers increases accessibility to its rough diamond

A recent update to De Beers Group’s sales model means more businesses will have the opportunity to source the company’s rough diamonds.

De Beers announced that it would be adopting a “more flexible sales approach” for the March 2015 to March 2018 contractual period, which would result in an “enlarged pool of ex plan availability” being available to non-sightholders.

Previously, the diamond company had sold around 90 per cent of its total rough diamond availability by value – known as “in plan” – to a select group of clients called sightholders; De Beers’ currently has 83 sightholders listed on its website.

Philippe Mellier, De Beers Group CEO
Philippe Mellier, De Beers Group CEO

These sales were executed via term contracts through De Beers’ primary rough diamond distribution arm, Global Sightholder Sales (GSS). 

However, under its new “accredited buyers” scheme, businesses that have successfully qualified to be a GSS customer but have not qualified for a term contract and therefore sightholder status will now be able to purchase a portion of this rough – known as 'ex plan' – on an ad-hoc basis. Ex plan refers to supply that is not sold through the annual sightholder application process – otherwise known as intention to offer (ITO). 

As part of the same overhaul, De Beers will also introduce a “simplified, compliance and demand-based customer qualification process” to determine its rough diamond clientele.

“The sightholder system has been at the heart of our selling model for decades and it will continue to be central to our approach in the new contract period. However, the changes we are introducing will provide greater flexibility in purchasing opportunities at De Beers,” company CEO Philippe Mellier explained.

“The changes will enable those expressing strong demand for the rough diamonds we sell to, to purchase them on a term contract basis as sightholders, while also offering more opportunities for non-sightholder diamond businesses to demonstrate their demand for De Beers rough diamonds.

“The more rigorous financial and existing ethical compliance requirements will also help to reinforce third-party confidence in the strength and transparency of GSS’s customer-base,” Mellier added.

An opportunity for the smaller players
Garry Holloway, managing director of Melbourne-based diamond jewellery retailer Holloway Diamonds, told Jeweller that a recent spate of industry controversies – and in some cases, unscrupulous activities relating to international diamond sales – had increased the importance of transparency amongst major rough diamond suppliers, speculating that this could be one possible reason for De Beers’ recent announcement.

Garry Holloway, Holloway Diamonds managing director
Garry Holloway, Holloway Diamonds managing director

He explained that having new prospects to sell to and monitor for performance could be an “excellent screening process” for new sightholders, adding that De Beers would probably be letting go of some of its existing sightholders.

While it is likely that news of De Beers’ sales model overhaul was met with mixed reactions, Holloway viewed it as a positive step. He believed that “the big diamond players are far too slow to innovate” and that the updated model would allow smaller players to breathe new life into the market.

However, Holloway also expressed concerns that the quality of the ex plan rough diamonds might limit their ability to do so.

“It seems like the most likely boxes and goods to be made available will be material that is not in high demand,” he stated.

Businesses will be able to register their interest in applying for the March 2015 to March 2018 De Beers rough diamond supply from Monday 25 August to Friday 29 August 2014.

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Tuesday, 21 January, 2020 02:06pm
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