De Beers announces DTC reorganization

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De Beers announces DTC reorganization

July 11, 2007

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London—De Beers announced today that it will reorganize its sales and marketing unit, the Diamond Trading Co. (DTC), into two separate business units with separate management structures to focus on its core distribution and marketing activities.

The DTC will continue to be headed by Managing Director Varda Shine and will be responsible for the distribution of rough diamonds to DTC sightholders and producer partners. But the DTC will split off its marketing operations, which will be guided by De Beers Group Marketing and headed by Worldwide Marketing Director David Lamb, who will report to De Beers Managing Director Gareth Penny.

"We can really focus now, like never before, on being the best distributor of rough diamonds in the world and selecting those new sightholders best able to add value to the rough we sell to them," Shine told National Jeweler. "We believe that having separate divisions, with separate management structures, will enable us to focus more on maximizing value for our clients and producer partners."

The news comes following increased speculation, heightened last week by a report from Tacy Ltd. Managing Director Chaim Even-Zohar, who said the DTC would focus solely on rough distribution.

De Beers made the announcement following its first DTC Business Excellence Seminar today in London. In a statement, the company offered the details of the realignment.

The DTC will now focus on two key elements of its business:

Driving value for producers by:
* Ensuring the optimum, sustainable price for producers' diamonds.
* Providing a secure and sustainable channel to market.
* Providing support and facilitation for sustainable local beneficiation.

And maximizing value for clients by:
* Providing sustainable arrangements that deliver a stable and efficient supply of goods.
* Providing leadership and partnership for the sightholder community by giving access to DTC industry insights, expertise, market knowledge and technology, which will help to build comparative advantage.

De Beers Group Marketing will continue to focus on driving consumer demand for diamond jewelry in three core areas:
* The development and marketing of "big ideas" such as "Trilogy" and "Journey."
* The continuing exploration and development of the Forevermark program.
* Maintaining consumer confidence in diamonds.

"De Beers and the DTC have been actively looking at ways we can operate more effectively and efficiently," Shine said in the statement. "To improve our offer to clients and our producer partners, we need to focus on being the world's best rough-diamond distributor."

She said the realignment would help to deliver that objective.

"De Beers is constantly evaluating all areas of the business to ensure that we remain highly competitive in a rapidly changing business environment," Penny said. "I fully support the DTC's reorganization and would like to commend Varda for championing the process and driving it through."

Shine added that she's optimistic about the changes, despite the challenges faced.

"There is already a tremendous amount of activity going on at the DTC with the new sightholder selection process underway for the 2008-2011 contracts, establishing DTC Botswana and Namibia DTC, as well as the management of the geographical shift of some of the DTC's operations," she said. "There are certainly challenges, but we are confident and fully committed to delivering the excellent service and delivery of supply that has always been the hallmark of the DTC."

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