ODC lures citizen owned companies into diamonds
Okavango Diamond Company, the government-owned rough diamond marketing company has launched a ground breaking sales model for citizen owned companies, which, according to Managing Director, Mmetla Masire will encourage more to participate and benefit from the multi-billion Pula industry.
The new Citizen Sales Model (3e3p sales model) is a tailor-made process, designed as a level field for local companies to bid against each other, ascertaining that a Botswana owned company wins, said ODC. The new sales model will be used in the next round of auction scheduled for next month.
Until the announcement, which was made last week by Masire, local companies were forced to compete with well-resourced international rough diamond buyers through auctions, which often disadvantaged them, since they could compete pound for pound since among others, they lack financial muscle. The new model, basically pits local diamond cutting and polishing companies against each other, which ultimately ensures a citizen win.
The new model, according to Operations Director, Sethunya Molosiwa, is designed in such a way that parcels (diamonds being sold) are reduced in size, in the process giving prospective buyers competitive prices. Citizen players in the sector will still be allowed to bid against their international peers on a mainstream auction platform. Masire emphasized that the model is set to make economic sense for citizens. “We're not just empowering local companies; we're boosting Botswana's diamond sector," said the ODC Managing Director, stressing the move will help in creating employment, which is much needed for the country. The ODC, despite having relaxed the sales model to benefit citizen companies, will continue to be transparent and adhere to the best international practices.
ODC was established in 2012, as part of government broader strategy of developing the diamond sector in the country. At inception stage, the company had access to 12 percent of Debswana’s rough production. The limit was eventually increased to 25 percent. Few months ago, De Beers and Botswana government, who are still to finalise a sales agreement, announced the ODC will access as much as 50 percent of Debswana rough production once the deal is done and dusted. "From the start of the new contract period, ODC will receive 30 per cent of Debswana production, progressively increasing to 50 per cent by the final year of the contract, ensuring a sustainable transition path for both partners," De Beers said in the statement. ODC has exponentially increased its revenue, year on year. For example, the Gaborone-based company raked in revenues of $1.1 billion (P14. 4 billion) in the 2022 calendar year, nearly 15 percent higher than 2021.