Friday, September 25, 2020

Debswana going through the pangs of pain

Once upon a time ? it now feels like a generation ago, the Debswana Diamond Company was an employer of choice ? a crown jewel in Botswana?s fast growing economy and a darling of the media.
Every Motswana child grew up hoping and aiming to work for the company.

It was the highest paying and most fulfilling company in the land; apparently.

Not only did the blue chip churn out billions that bankrolled the country, it also modeled itself as the sole midwife of the illusive economic diversification mirage that the country had been chasing for over a generation.

The multi billion pula empire was led by Louis Nchindo, an exuberant, swashbuckling and flamboyant celebrity Managing Director, who, in many respects, created the company in his image.
Such were the national expectations on Debswana that its executives saw it well in order and within their remit to take it upon themselves to venture into outlandish projects beyond diamond mining as a way to enforce and support economic diversification.

As part of that vision, the company found itself engaged in areas as far detached from diamond mining such as agriculture, tourism and hotel development.

Even more, Nchindo?s sphere of influence extended well beyond business.

He had political connections in high places, including a close and long running relationship with Festus Mogae at the State House.

Nchindo had in the 1990s also played a central role in ensuring the arrival of Vice President Ian Khama into politics.

But that was then.

Those days are truly gone.

Louis Nchindo has since been replaced by Blackie Marole at Debswana, a reticent and studious former civil servant of abundant intellectual reserve.
As if the change was not enough, Nchindo and Mogae have fallen out.

The two men are not even talking to each other, to a certain extent a result of government decision to appoint English lawyers to investigate how he had run Debswana.

The collapse of the two men?s longstanding friendship, which goes as far back as the duo?s days at Oxford University in the 1960s, mirrors the image of Debswana today.

Not only does Nchindo?s legacy at Debswana lie in tatters, Marole has announced a leap into total control by calling off the planned construction of a chain of hotels by Debswana.

Marole has gone beyond dismantling Nchindo?s empire by withdrawing Debswana from Nchindo?s pet projects of agriculture and tourism. He has recently announced a retrenchment exercise at Debswana Head Office.

It is not an ordinary retrenchment exercise.
?Structural changes are being contemplated and it is anticipated that some redundancies may result,? said the Group?s Corporate Communications Manager, Jacob Sesinyi, in his typical circumspect fashion.

But still insiders are saying this will not be an ordinary retrenchment exercise.

Over and above a good number of middle management and clerical staff, about six executive jobs at head office are said to be on the line.
With no one else but Marole safe on their job, the looming retrenchment has set tongues wagging.
?Marole is not only dismantling Nchindo?s empire, he is also crushing down a few heads,? said a former Debswana board member who spoke on condition of anonymity.

This has caught everyone by surprise, not least because Marole had been ruled out as a softie that lacked assertiveness.

Those who had wanted him to transform Debswana overnight, dismissed and bemoaned Marole?s lack of determination, urgency, depth and resolve to do things his own way.

?Marole is naturally a very honest and descent man but he is fiercely independent. He is also very patient. The problem is that neither of the shareholders trusts him. He is the kind of man who will take time to achieve his goals,? said a former colleague from Marole?s days at the Ministry of Minerals.

Permanent Secretary in the Ministry of Minerals, Dr Akolang Tombale, would not want to talk about the recent developments at Debswana Head Office, only saying Debswana is an independent company and there was no need for the shareholders to micromanage the company, adding that it?s the responsibility of the Board.

?But then I will not disclose what the Board has discussed as that would not be in order,? added Tombale, who is also the Deputy Chairman of the Debswana Board.

De Beers?s representative in Botswana, Sheila Khama, would also not want to talk.
Retrenchments aside, by any measure, Debswana faces tremendous problems.

And trouble has been brewing for some time.
Though they are not bringing forth evidence to back their case, pressure has been mounting from De Beers, accusing Debswana management of inefficiency.

Because of these alleged inefficiencies, De Beers wants to be given the management contract.
Government has rallied behind its citizens, saying they will not go back on Debswana?s hard earned localization programme.

There have also been murmurs within the engineering community that Orapa and Letlhakane mines have abandoned the mining plans, going exclusively for high diamond grades as a way of a shortcut to achieving higher carats per tonnage.
?If allegations of abandoning the mining plans in Orapa are true, then that would basically amount to plunder of national asset,? said a former Debswana engineer.

That aside, relations at Debswana head office have been souring for some time.

Staff openly talks of low morale, disgruntlement and loss of pride. That has seen the company lose some of its crack engineers to the smaller mining companies emerging around Francistown.
Relationship between Marole and his Deputy, Len Makwinja, is not at its best.

Debswana insiders say Makwinja is not happy that his boss publicly declined to come to his defence recently when some Debswana suppliers accused him of favouritism.

Instead Marole appointed a team of auditors to look into the allegations.

Whatever the truth, Marole?s determination to stamp his authority has sent chilling waves of uncertainty across the once revered Debswana empire.

?To meet Debswana?s future challenges of revenue growth and to ensure sustainability of business, the role of Head Office will change to increase its strategic guidance of the business. As a result of the refocusing of the role of Head Office function and the nature of the work delivered, structural changes are being contemplated and it is anticipated that some redundancies may result,? says Sesinyi.

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