At the outset of my interview with Diamond Trading Company CEO Varda Shine—and we can still call her that, for now—she admitted that it’s still early days for De Beers’ latest reinvention, and all the details aren’t out yet. But she did drop some intriguing hints of where the company is headed, and what all this means for the industry:
So far, the biggest announcement is that the name DTC is going away, and we should now refer to your clients as De Beers sightholders. What impact will the name change have on a practical basis?
In practice, the main thing is [CEO] Philippe [Mellier] wants to make sure we are all working under the De Beers name. We are working on a new logo for sightholders. De Beers has a plethora of company names now. DTC is known inside the trade but outside the trade most people better know the name De Beers. Once we have one name, it will make it a little bit easier for people on the outside to understand. We believe that by consolidating the brand, we will strengthen it.
One thing is that the joint ventures will keep their identify. DTC Namibia and DTC Botswana will both keep their identity.
What will your new title be?
We are still working on that. This is going to take some time. This is something that also impacts the CEO of De Beers Canada, the CEO of De Beers South Africa. My job and responsibility aren’t changing, whatever title you give it.
We are hearing a lot about the fact that consumers need to be at the beginning of the chain, not the end of it. What does that mean on a practical basis?
For the last few years we have been starting to focus on downstream. What Philippe wants to do is take that all the way upstream. He keeps referring to mining to demand, rather than setting demand to mining. The whole idea is to listen to the consumers, and remember consumer demand.
But is it possible to mine to consumer demand? Doesn’t nature govern what comes out of the mines?
It’s not the same as: Can we produce more Diet Coke, and less Coke Zero? We do have an understanding of the different mines and the different pipes. As long as we are actually looking at the mines and doing it responsibly and doing it together with the governments of our producer partners, it can work very well. The whole idea is to actually explain how trading and consumers require much more flexibility and more choice than you generally have in the mining business. It will be about how do we make sure we produce in line with market demand.
If you are thinking more about the consumer, will De Beers do more consumer-focused advertising, the way it used to?
I don’t think it will change. We are not going back into generic advertising. You can see what we are doing with Forevermark and the Center of the Universe. We are aware that advertising does have some halo effect [on the rest to the market]. We are definitely going to make sure that Forevermark makes some noise.
In Chaim Even-Zohar’s interview with Mellier, the CEO talked about listening more to clients. What will that mean in practice?
The key account managers are in constant contact with the clients. It would be good for clients to have a little bit more airtime with Philippe and myself. It’s not about people telling us five times a day that the goods are expensive. It’s about understanding what goods are in the market and making sure that diamonds remain relevant to consumers.
Will sightholders be urged to start marketing initiatives, as happened in the past?
What we want to do—and we are already talking to sightholders about this—is look at what things the sightholders are doing already. There is no point in asking everyone to do the same thing. But if there are some good ideas, we may consider supporting them.
In the end, De Beers’ Supplier of Choice policy had a profound impact on the company and the industry. Do you think we’ll say the same about this new reinvention when all is said and done?
Supplier of Choice was introduced 12 years ago and we launched it nine years ago. This time we are going about it slightly differently. Supplier of Choice was a big bang. This time, we will work our way through it. I think in 10 years’ time, you will definitely be able to see the difference in De Beers.
And what do you think some of those differences will be?
It’s reorientation to the consumer. It’s focusing the brand and making it more meaningful. It’s about the whole working together under [85 percent owner] Anglo [American]. There are a whole lot of things that will happen over the next few years that should have a big impact.
Speaking of Anglo, its CEO is now your chairman. What will that mean for the company?
At the end of the day, Anglo has been a shareholder in De Beers since 1920. They understand that De Beers is different from the rest of the portfolio. On a day-to-day basis, I don’t think we will see much difference. We will get the benefit of being part of a much larger company. There is quite a bit we can get from Anglo. They don’t have much experience with something like De Beers Diamond Jewellers or the Forevermark, but they are supportive of the current management and the current direction.
On another topic, how do you see the upcoming Christmas season, and diamond prices?
We believe that this year is going to show consumer demand grow in about in the mid-single digits in the U.S. We have seen good results from the publicly listed companies in the U.S.
If you look at India, it’s been very quiet but India is now only getting into their season. We think India is going to have a nice season and we will see nice single digit growth. But since the rupee has declined against the dollar, we may see a standstill or decline in dollar terms.
Japan has been doing really well, it has just been surprising for all of us. Although consumer demand is not going to grow as rapidly as it did last year, if you look at info published by Rio Tinto, BHP, and others, we don’t see supply growing much in the next five years. So if you look at the next five years, we think diamond prices will continue to increase.
Anything else you have to add to JCK’s readers?
They should congratulate themselves for being in diamonds. I don’t know any business with such a good supply-demand outlook. The diamond business is the right place to be.