Varda Shine, managing director of DTC London and board member of DTC Botswana, said De Beers will spend US $ 200 million (P1.25 billion) in the fourth quarter of this year to try to push up sales of gem-diamonds.
Shine told The Sunday Standard in an exclusive interview that they want to take advantage of the Christmas spending spree to shore up the fortunes of the company in the light of the credit crisis that has hit America.
“We are going to spend US $ 200 million to create demand in the diamonds major market,” she said, adding that most of the marketing will be done in China, India, Europe, Japan, The Gulf States and the Unites States of America.
“The idea is to try to maximize our sales in the second half of the year by taking advantage of the Christmas spending spree,” she added.
The move comes at a time when the world’s biggest diamond consumer, the Unites States, has been hit by credit crisis fears sparked by the sub-prime lending in the mortgage sector.
The USA alone consumes about 40 percent of the world’s diamond jewellery and is closely followed by Japan.
The credit crisis is likely to affect what would have been otherwise a better year for the industry following the jaded results in the previous year.
“We think people who earn up to US $ 100,000 per annum would not be affected but our fear is that those earning as high as US $ 250,000 per annum would not be able to buy diamonds if the situation worsens,” Shine said.
According the world’s leading diamond producer, De Beers, the year 2007 took off well with cutting and polishing centers being back to business. Last year’s poor results were compounded by the reduced supply from the Russian Alrosa.
DTC London said it is being encouraged by sales results of the six months up to June but warned that there are almost certain that they would sell less volumes compared to last year.
In July this year, De Beers reported total sales of US $ 3.4 billion which was seven percent lower than last year at US $ 3.6 billion for the first six month of the year. And underlying earnings were at US $ 324 million while last year they were recorded at US $ 308 million, which were five percent better.
De Beers AG, is 15 percent held by the Botswana government while the rest is between the Oppenheimer family and Anglo American.