Debswana Managing Director Andrew Motsomi says the diamond company is currently accelerating its transformation as its future looks bleak due to a myriad of challenges. Speaking during the Business Botswana 16th National Business Conference gala dinner held in Cresta Marang Hotel Francistown last week he said Debswana finds itself faced with challenges as profitability levels are under severe pressure, its assets are ageing, diamond pits getting deeper and the pressure it faces from lab grown diamonds.
“There is market volatility and growing macroeconomic headwinds such as the geopolitical uncertainty and soaring global inflation. Since 2018, key matrices are regressing, mainly due to market uncertainty and increasing costs,” he said.
Motsomi said given the infinity nature of their commodity, the future is uncertain for the economy. He said these realities at Debswana require the mining company to accelerate transformation in order to continue to make a meaningful contribution to the economy of Botswana. He emphasized that consequently, they have developed a bold technology-led change and transformation strategy that will help unearth new value and effectively mitigate pressure on profit margins and market turbulence.
“The transformation cuts across how we effectively operate, deploy technology and the manner in which we procure and source goods and services as well as the protection of the environment and how we impact communities,” explained Motsomi.
He added that their business strategy is largely premised on technology-led transformation. He said their strategic intent resonates well with the Theme of the National Business Conference “Road to High Income: Accelerating Transformation” being their Innovation and Digital Transformation Strategy Pillar. He explained that this pillar focuses on resolving issues that are critical to the business in the short term while laying the foundation for digital transformation in the medium to long-term, particularly in the areas of Green Economy, Knowledge Economy, Efficient and Responsible Mining, Diversification and Partnerships with communities and other players such as contractors, the academia and the banking sector.
“It is important to point out that technological evolution for the mining sector is an imperative that will afford our mines the extended lifeline that we desperately need, which will in turn buy our country the valuable time it requires for accelerated economic diversification,” he said.
Motsomi added that one of their strategic pillar which resonates well with the theme of the National Business Conference is the Safety, Environment and Communities within which they have overhauled their Citizen Economic Empowerment Programme (CEEP). He said Debswana is innovative and transformational in developing and implementing its CEEP. Motsomi explained that this programme is their roadmap to facilitating the creation of a middle class which will contribute in lifting the country from a middle income to a high income status.
“An important caveat though, is that in order for the programme to yield the desired results, the beneficiaries of the programme should refrain from fronting,” he said.
Focusing on the year 2022, he said the highlights of the CEEP are that to date, their total local spend in the country is at 88 percent which is P5.9 billion. He said the citizen spend is at P2.7 billion. Motsomi said another significant highlight is the P8.5 billion contract value partnership with Botswana Oil Limited (BOL) to drive citizen participation in the petroleum industry. He further revealed that Debswana awarded drilling contracts at a value of more than P1 billion to various citizen owned companies.
“Recently we awarded industrial lubricants contract to a citizen company, the contract is valued at P300 million. We are proud of the more than 100 citizen companies that have benefited under our Supplier Development Programme.
Among other important issues he said Debswana has a partnership with local commercial banks on access to finance for businesses. Motsomi said the banks have pledged P4.7 billion towards Debswana’s Supplier Development Programme with more than P300 million in loan facilities approved enabling citizen companies to acquire mining equipment and operating cash flow.
