Leo Schachter Diamonds, one of the biggest diamond polishing companies in the world, is to open the second plant in Botswana in a bid to consolidate its position in the country.
David Greenberg, one of the partners in the company told The Sunday Standard in an interview in Tel Aviv, Israel, that the new plant is expected to be in operation by the end of the year.
“We are opening another office in Gaborone Diamond Park, specialising in the cutting of larger goods,” he said.
The second plant in Gaborone is expected to employ up to 250 people, bringing the total number employed by the company in Botswana to 550.
Leo Schachter first came into the country ten years ago when it acquired the then loss-making Lazar Kaplan in Molepolole.
The taking-over of the Molepolole plant was a strategic move to position itself for the beneficiation programme, which only gained momentum in recent years. At the time, polishing in Botswana was not seen as viable because of the high labour costs in the country compared to China and India.
According to India’s Gem and Jewellery Export Promotion Council’s Praven Shankar Pandya, labour costs are as low as US 125 per month against Botswana where they are expected to pay minimum wage plus production commission.
However, Leo Schachter introduced state of the art technology which has helped to bring the cost of production down.
“We entered Botswana 10 years ago. And we had to bring in skills and technology and that is what beneficiation is all about,” he said, adding that the biggest challenge they still face in Botswana is that of low productivity.
Leo Schachter, which was founded in New York in 1952, has been a sight holder of De Beers London since 1966 and has also acquired the sight holder status for DTC Botswana.
The sightholders status has given the company a stable supply of rough diamond which makes up to 60 percent of orders, the best coming from Russia, Canada and Belgium.
The company has plants in Botswana, China, India, Israel, Thailand and New York. It also has subsidiaries in India and New York.
Greenberg said the company is launching a big campaign to try to stimulate the market demand that has been seriously hit by the USA sub-prime crisis.
“I think liquidity is affecting everybody and payments are going to be slow this year. I think business is going to contract a little bit,” he added.
Further, he said his company is taking a shift in its marketing strategy to look at the Far East, mainly Hong Kong, mainland China and India to develop those markets.
Leo Schachter prides itself of its best performing diamond brand, Leo Diamond, which was coined by a leading consultancy firm in the 1990s.
“We knew that we had a great product, we did a lot of market research,” Greenberg said.