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Varda Shine Speech to DTC Sightholders

Jan 17, 2008 5:55 AM   By Varda Shine
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RAPAPORT... The following speech was delivered by DTC managing director, Varda Shine to DTC sightholders in London on Wednesday (January 16, 2008.)

Good evening and thank you for joining us.

Before I get started, I would like to ask you all to take a couple of moments to think about those lost in the tragic air accident in Namibia last week. I am sure many of you knew them as friends or colleagues and our thoughts are with their families.


I want to share with you a few thoughts … thoughts about the journey we have all made since I spoke to you in January last year …

But particularly, I want to share my thoughts about the journey on which we are embarking this year, as we start the new contract period.

This evening, I want to recognize that changes of the sort we have all been through is not … and cannot be without its regrets. I believe that the new Sightholder contract was implemented fairly and objectively … applying the same rules to every applicant.

I believe too that it has resulted in a list of diverse, quality Sightholders that are best placed for future success, particularly in the current environment of constrained supply. But let’s not pretend that change is easy. It has been a tough year … for you as well as us.

It has been tough on some good friends … on well run and well managed companies that the DTC would like to supply, if only we had enough diamonds to do so. These were not easy decisions but I know they were the right decisions. They were made in the best interests of our business and were also the right one for you, our Sightholders, to whom we must ensure sustainable, viable supply levels in the next contract period.

I wish to say thank you to all of you for your hard work and professionalism. So, what has been achieved over the past year? We have introduced a new commercial strategy for the DTC … one that entirely supports our overall strategy of growing demand, of improving pipeline efficiencies and of adding value to diamonds. This commercial strategy has resulted in a new structure for the DTC.

We are no longer the old London based company. We are now a family of companies with sales operations in four countries. A family of companies focused on two goals … working with those clients best able to add value to the diamonds we sell and helping our producer partners to achieve their legitimate aspirations to create sustainable downstream diamond industries in their country.

I have heard questions asked about our policy towards our producer partners. But it is not a question of policy or even about doing what we feel is right. It is about facing our commercial realities and meeting the expectations and requirements of consumers – our ultimate bosses.

Over the past year we have successfully created and implemented the new Sightholder contract process. A process in which we engaged in a real dialogue with you … in which we listened to your views … and acted on many of your suggestions.

I make this point because it reflects something close to my heart … and something I said this time last year … our desire to build a new relationship, a more mature partnership between the DTC and its clients. One based on greater transparency, on mutual understanding and on commercial opportunities that would benefit both us and you.

Last year was just the start. Now we want to demonstrate even further that DTC is committed to this partnership, from top to bottom in our company. And a demonstration of this is the manner in which we will work together on your account plans with the Key Account Management team.

Over the coming weeks and months, prior to the new contract period, your KAMs will be working closely with you to refine your account plans based on the content of your Contract Proposals. They are there to help you get the most out of your ITO and the world leading IP that only the DTC can offer.

And, we will work with you to help you achieve or exceed these plans. A second way in which we will demonstrate our commitment to this relationship is our determination to develop ways in which we can maintain a relationship with you all … whether or not we will be able to offer you supply.

As you are aware from discussions this week, we are working on the details of these plans and will communicate this to you over the next few months. I can sum up what we are offering in two words … partnership and excellence. What do we require in return?

The same … Partnership and excellence.

There is a third requirement … One that we promise to deliver to you and one that we must have in return … and that is accountability.

• Financial accountability
• Professional accountability
• Ethical accountability

You know that we will only be confirming supply contracts following the completion of third party verification of your contract proposals. We are setting high standards for ourselves … and we expect you to share those standards.

I’m sure you are all aware of recent developments in Antwerp. The DTC has suspended supplies to those companies involved pending further investigations. This is not about sending a message but about living up to the ethical standards that we should all expect of 21st century companies …

More important than that – it is about ensuring that diamonds live up to the emotional value they represent to our consumers.

In 2008, DTC Botswana will be opening its new building in Gaborone and we will be working on our plans to transfer aggregation from London to their fantastic new facility in 2009. I am delighted that DTC Botswana Managing Director Brian McDonald is here with us this evening. And I would also like to welcome Faried Sallie, the managing director of DTC South Africa.

Brian is busy now preparing for DTC Botswana’s first ever sales from the new building from April. The new Sightholder contract will mark the completion of major period of change in the structure of our business relationship with you, our clients.

I want to make it clear, though, that completing on these structural changes … does not mean the end of innovation. This will continue. We want to continue looking at ways in which we can enhance our services to you, how together we can identify new opportunities that provide mutual commercial benefits. But, if these changes are to be truly beneficial to us and to you, then innovation must – wherever possible – be in partnership.

From our perspective, this means keeping you informed, inviting your input and participation … and listening to you, as I believe we listened in 2007.

There will be occasions when our commercial priorities require swift innovation. What I do promise is that, where this occurs, we will do our best to explain our thinking. To aid this process we have the Sightholder Consultative Committee which will start again with the new contract period.

It is our desire to see this group continue to be a forum for regular discussion and feedback between the DTC and its Sightholders on a range of issues … and all volunteers are welcomed!

Our joint ventures with the Governments of Namibia and Botswana are start up businesses. They have access to the knowledge and expertise of the DTC and will adapt as lessons are learnt.

Together, the DTC, its producer partners and the Sightholders with operations in these countries will continue to seek ways of maximizing the value of diamonds and work together to ensure that a sustainable downstream business is created.

I would now like to take a moment to talk to you about some further exciting developments for 2008. Firstly, we can update you on the leadership of the Client Value Proposition department, the new name for the sales department which better reflects our commitment to you.

I expect to be able to announce the new Director of the CVP department within the next few months. Mike Aggett continues as Head of Client Management, supported by the Sales Manager Ricky Ng. Philip Stockton will continue to co-manage the department and run strategic projects.

Joining the CVP division is Howard Davies as Head of Commercial and Services. Also new to the department is Louise Prior as Manager of Communications, as well as Matt Freeman, in the role of Brand and Client Services Manager.

Secondly, over the next few months the DTC will communicate the way in which it offers those goods that do not lend themselves to distribution through the ITO system such as Sight buybacks, refusals and other goods.

We are already considering a wide range of options, and, as we move into the new contract period, we will be reviewing the way in which we offer ex-plan goods for sale. At this stage, we are not ruling out any options.

Another update for you is about the Forevermark and the changes in the way this will operate. As you are aware, in 2007 we announced the creation of a new division at De Beers. De Beers Group Marketing will continue to build consumer demand for diamonds, maintain consumer confidence and build and develop the Forevermark.

The Forevermark will become a universal brand … the definitive point of reference in the industry and in the minds of consumers. As you know, in future participation in the Forevermark will be open to all eligible diamantaires and not just DTC Sightholders.

This means that existing and new DTC Sightholders through their continuing compliance with the Best Practice Principles will meet one of the fundamental criteria to be a Forevermark diamantaire.

A final update for you all is on pricing.

As we did in the second half of last year, we will continue to have a more dynamic approach to pricing and will review our prices on a Sight by Sight basis. We will communicate price changes at 3 touch points throughout the year; in February, during our annual results meeting, and ahead of the 2 major trade shows of Las Vegas and Hong Kong. Before I leave you this evening, I want to conclude with some key points.

Whilst DTC has changed structurally in the last year – our ultimate vision and strategy remain the same. We want to maintain our position as the world’s most efficient and leading distributor of rough diamonds. We will continue to add value - to you, our clients - and to our producer partners. None of this will change.

However we also want to be better known for other qualities, such as being an icon of ethical standards that reflect well on all associated with us. We want to ensure that consumers have absolute confidence in the cutting and polishing segment of the diamond pipeline. And we want to be acknowledged as an unparalleled expert in rough diamonds, with world renowned intellectual property.

For you the most important ambition is that we are known for excellent client service and the first choice of rough diamond supplier. I would encourage you all to give us feedback on how you think we are performing – and how we can continue to improve.

We intend to remain leaders in this industry – and I hope we will do this by example.

Thank you.
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Tags: Compliance, Consumers, De Beers, DTC, Hong Kong, Namibia, Polishing, Sightholders, South Africa, Trade Shows
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