While the relocation of the De beers sales wing from London to Gaborone is often presented as a big coup for Botswana, there are many behind the scenes hurdles that De Beers and its customers will have to contend with.
The relocation was a result of extensive horse-trading by both De Beers and Botswana Government, part of which included increasing the tenure of the sales agreement between the two parties from a traditional five year cycle to 10 years.
Information passed to Sunday Standard indicates that the long negotiations between the old partners were often characterized by arm twisting as each party went out of its way to gain maximum concessions from the other.
In a rare and candid media briefing, the head of Diamond Trading Company in Botswana, Varda Shine, said it is to be expected that sightholders who are used to flying direct flights into London would take time to get used to the fact that Botswana does not have direct flights from many diamond key centers around the globe.
Such places notably include New York, Tel Aviv and China.
Shine said in the interactions between De Beers and the sightholders some of the customers expressed the discomfort and apprehensions of lost business hours that will inevitably come with the relocation.
She said she foresaw instances where some sightholders will be opening regional offices in either Gaborone or Johannesburg so as to permanently handle their transactions in Gaborone more conveniently.
The De Beers trading activities are a close to P50 billion a year business. And it is the first time that the operations will be headquartered in Africa.
“We believe it is a ground breaking opportunity for Botswana and indeed the region. It has never happened before that such a big business moved its headquarters to Africa. This will be a major catalyst for Botswana,” said Shine.
She said De Beers’ decision to move its trading activities to Gaborone was a symbol of faith the company had on Botswana. As a result Botswana will become a true international diamond centre, she said.
The relocation is expected to bring in an abundance of expertise including at executive levels in the diamond trading industry.
Shine said, naturally, it has not been easy for De Beers to convince all of its employees to move from London to Gaborone.
The hardest to convince, she said, have been the top level executives, as well as those employees with school going children, especially at secondary school ages.
She said the company had to deal with the difficult realities of having to tell their employees that some of them will become redundant, not to mention the fact that among those moving to Botswana some of them will move back to an uncertain future after a three year stint in Gaborone after setting up the new company in Botswana.
“It has not been easy convincing the executives and most skilled to relocate. It’s a big social impact. But we are consoled by the fact that its history in the making,” she said.
She underscored the fact that many of the people coming will, after some time, also be made redundant as more and more Batswana take up the jobs. Already recruitment processes have begun.
The uncertainty created by the relocation, it has surfaced, has given an opportunity for De Beers competitors to make spirited attempts to poach the disaffected employees.
Shine is, however, adamant that the timing couldn’t have been more opportune.
She says this is because the market dynamics today make it almost a guarantee that De Beers will carry its customers along.
She added that customers will come along because there is currently a variance between supply and demand which has been the case for the last few years.
“The fact of the matter is that coming to Botswana ten times a year eats into the time for business for many businesses executives used to direct flight to London. I foresee some of them opening up businesses. But there is now bigger confidence among customers that some positive changes are in the offing for them,” she said.
