De Beers’ Diamond Trading Company (DTC) on Monday announced the start of the 2012-2015 Supplier of Choice (SoC) contract (on 31 March 2012).
This follows the announcement in December 2011 of the provisional qualification of 72 Sightholders.
According to De Beers statement, following the successful outcome of the pilot announced in August 2010, the commencement of the new contract period also marks the inauguration of a more dynamic and integrated distribution model which will enable De Beers to take into account the demand demonstrated by all its rough diamond customers (DTC Sightholders and Diamdel registered businesses) in allocating its finite availability.
For the first time, Sightholders and non-Sightholders demonstrating consistently strong demand at Diamdel auctions will, subject to availability, have the annual opportunity to compete for an Intention to Offer (ITO) by being invited to submit a Contract Proposal Questionnaire (CPQ).
DTC’s new process for replanning future ITO allocations will better reflect individual Sightholder demand as demonstrated during the preceding ITO period. This could result in future ITO allocations increasing or decreasing in line with the demand demonstrated.
De Beers said Diamdel registered bidders (Sightholders or non-Sightholders) that purchase at least US$3m in aggregate in a particular category of rough diamonds and make at least three separate purchases across a calendar year (pro-rated to US$2m and at least two separate purchases for 2012) may, subject to availability, be invited to submit a CPQ to qualify for an ITO in the boxes for which they have demonstrated demand.
Philippe Mellier, CEO of the De Beers Group, said this is an exciting time for De Beers’ rough diamond customers.
“The new SoC contract introduces a series of innovations to enhance the dynamic nature of our distribution strategy, offering wider access to our rough diamonds and enabling us to manage our distribution risk better,” he said.
Varda Shine, CEO of DTC, said: “We have great confidence in the Sightholders that have qualified for the new contract period and we look forward to offering them the right buying opportunities as their businesses evolve and as we move our sorting and sales functions to Botswana.”
Neil Ventura, CEO of Diamdel, said, “This latest evolution of the De Beers sales strategy provides more businesses with more opportunities to buy the products they require at auctions, and provides a potential path to longer term supply from DTC.”