Beers is aiming to increase its core earnings by 30% to $2-billion by stimulating demand and pushing up prices, reports the Antwerp Diamond High Council (HRD), in its Antwerp Facets magazine.
It also aims to raise the value of the group to $12-billion by 2009. While it did not disclose current value, it provided a figure of $9,3-billion when the firm was taken into private hands four years ago.
Even with a background of flat rough diamond supply forecasts, ”sustainable price increases can be achieved if we can continue to raise demand”, De Beers’ managing director-designate Gareth Penny (he will takeover next year) is reported as saying.
The DTC would boost worldwide demand for diamonds by continuing its aggressive marketing efforts. De Beers’ target was to raise growth in demand to around five percent annually from an average of 3,2% per annum over the past five years.
”We’ve now put ourselves a real stretch target of five percent annual growth in our business, which is going to be a challenge for us to meet,” Penny said.
Meanwhile, De Beers’ South African marginal diamond mines would be jeopardised by the proposed re-introduction of a 15% export duty on diamonds, said De Beers group managing director Gary Ralfe.
This was in the face of De Beers’ lower share of the global diamond market.
”Around half of De Beers’ South African production with a value of around $500-million cannot be polished in South Africa, so the proposed export duty will come to about $75-million,” Ralfe said.
”That will jeopardise the marginal mines.”
Ralfe said De Beers’ share of the global diamond market was currently standing at less than 50%, down from 60% before it launched its Supplier of Choice programme, and mainly due to the reduction of its stockpile of diamonds.
De Beers faced challenges in its efficiency and productivity, but said that the management of pipeline efficiencies had improved. – Sapa