De Beers Diamond Trading Company (DTC) has pruned the number of its sight holders from 94 to 75 in its list for the period 2008-2011. The names that were left out include 8 Indian sight holders and 3 other Indian sights based in Belgium.
DTC is the rough diamond distribution arm of De Beers and sorts, values and sells around half of the world’s rough diamonds. Its clients are known as ‘sightholders’ and are carefully chosen for their ability to add value to the diamonds it sells.
However, the company has also included 6 new sight holders of which 3 are Indian companies. With 11 Indian companies out of the DTC list, the Gems and Jewellery Exports Promotion Council (GJEPC) is worried about the fallout of this exclusion on the diamond business, which is already undergoing a rough patch.
“If the company is citing a shortage of rough diamonds as the reason to trim its list, then why add new sight holders?” GJEPC’s chairman Sanjay A. Kothari asked.
Requesting DTC to review its decision, Kothari said: “These people (the sight holders whose name is excluded) have made heavy investments to diversify their business according to DTC guidelines in the cutting and polishing business. What will they do now? We already have over 150,000 people laid-off due to the rupee's appreciation and other factors.” He, however, declined to comment on how the operations of the sight holders would be affected, other than having to source rough diamonds from a company other than DTC. He also said that 40-50 small businesses that received their business from these sight holders would be affected by the exclusion.
Though no DTC spokesperson was available for comment, DTC had announced a list of new sight holders in December 2007 and a statement had said : “The DTC is currently investigating ways in which it can retain its valued relationships with current sight holders that have not secured supply for the 2008-2011 contract period. The company will provide further information on these initiatives before March 31, 2008.”
The diamond major had said that 75 clients (sight holders) would be offered supply through DTC London and DTC South Africa. “These clients form part of a global network of 79 sightholders that would receive sights through wholly-owned and joint-venture DTC operations around the world,” the release had stated.
Kothari alleged that the overall impact of the exclusions could have been reduced if the DTC would have increased allocation to the Hindustan Diamond Company (HDC), which is a joint venture between De Beers and the Government of India and is part of what is known as the De Beers’ Diamdel system—a rough diamond supply system set up to feed the open market outside its own closed client list.