Enduring success of multi- billiondollar Okavango Diamond Company
State- owned rough diamond marketing firm, Okavango Diamond Company ( ODC), has demonstrated resilience throughout its decade- long journey.
It has surmounting challenges such as unfamiliarity, lack of trust, and penetrating the Tel Aviv markets, along with prolonged delays in USD payments. During the company’s 10- year anniversary celebration, Managing Director, Mmetla Masire, delivered a speech and awarded 40 certificates to those in attendance. A total of 90 were ODC customers by end of 2014.
Masire reflected on ODC’s evolution from its humble beginnings with only 25 registered clients to boasting a clientele of over 500 by 2023.
He proudly highlighted the company’s remarkable growth, transitioning from generating less than US$ 100 million in annual diamond sales revenue to now exceeding US$ 1 billion annually. Furthermore, the government’s vision for Botswana’s diamond indust ry has been highly compelling.
“We recognise the pivotal role our company plays in realising this vision. We embark on this journey with enthusiasm and a sense of privilege, contributing to a significant phase in the development of Botswana’s diamond sector.
“Reflecting on our journey from inception to our current noteworthy achievements, it is important to express gratitude and acknowledge the groundwork laid by those who came before us.”
Mas i re highl i ghted the Debswana Sales Agreement as a pivotal moment, paving the way for the establishment of what is now ODC. He emphasised the resilience shown in the early years, which laid the foundation for the growth that has been experienced.
He reflected on joining ODC during the challenging times of the Covid- 19 pandemic, highlighting how the company navigated economic and financial challenges that threatened the livelihoods of the communities in which they operate. Masire said the growth they have experienced since then is a story of overcoming hurdles, adapting to change, and always aiming for the stars.
He said ODC broke the world record for the largest one- day Diamond Auction sale ever conducted for rough natural diamonds in September 2021 to generate sales revenues of US$ 123 million for one- day. In February 2022, the ODC broke the world record again for the largest one- day Diamond Auction sale ever conducted for rough natural diamonds generating sales revenues of US$ 182 million. In 2022 the Okavango Blue was on display at the American Museum for Natural History, and “this was a great exposure for ODC and the Okavango Blue.”
The Okavango Diamond Trading Company was officially registered in 2012. In April 2013, the entity underwent reregistration and a name change to ODC. One might wonder about the swift alteration.
The reason lies in its initial registration as a company limited by guarantee, akin to clubs, associations, and non- profit organisations, which precluded it from distributing dividends and essentially rendered it dependent from its inception. Recognising this limitation early on, the decision was made to re- register the company as a private entity, thus affording it the opportunity to formulate profitable and competitive strategies.
Initial working capital was provided in the form of a loan from the shareholder, marking the sole instance of governmental financial assistance to ODC, which was subsequently repaid.
However, to bolster confidence in the market, particularly among financing institutions, the government extended a USD 100 million guarantee, although ODC never utilised this provision.
The signif icance of this guarantee lay in its facilitation of ODC’s negotiations for favourable credit facilities from banks, enabling beneficial rates and terms. This pivotal moment catalysed a partnership between ODC and Standard Chartered Bank, which took a leap of faith with an unestablished entity, especially one owned by the government. Gratitude was extended to Standard Chartered Bank for their trust and support.
When ODC was gearing up for its inaugural sale in June/ July 2013, Masire remarked, “there was little to no awareness of ODC, let alone confidence in entrusting it with substantial sums of money for diamonds yet to be delivered.”
The initial hurdle ODC faced when venturing into the market was a lack of trust. It commenced operations with a select group of trusted clients, gradually building its reputation and reliability.
Over time, ODC became recognised and trusted, now counted among the most reputable and transparent sellers of rough diamonds. Presently, ODC boasts a clientele of well over 600 customers. However, this achievement was not without its
challenges. Initially, customers were hesitant to pay until seven days after the diamonds were delivered.
ODC diligently cultivated trust and relationships with its clientele, working with each customer individually. Although it was a time- consuming process, the effort proved successful in the end.
Their next challenge was how the ODC breaks into the markets of Tel Aviv, Mumbai, Antwerp and Dubai as the other diamond companies had sales representatives in these countries. ODC also could not allow cherrypicking as they had to sell the run of mine. They needed to come up with compelling value proposition and an attractive selling model that could reach all the markets and allow for the sale of Run of the Mine. India did not initially recognise ODC as a mine and wanted to charge import duty.
Masire said after negotiations with the Reserve Bank of India, another challenge was that USD payments to Botswana were taking two days and Standard Chartered Bank was able to negotiate those payments to Botswana be precleared and have payments processed in one day.
He said the one pivotal factor in the transformative journey has been the influence of the Mindset Change campaign, a national initiative emphasising innovation, adaptability, and a forward thinking ethos.
Masire highlighted recruitment as yet another obstacle. Those who did choose to join were individuals seeking fresh challenges. To address this, certain roles were consolidated to enhance job enrichment while simultaneously reducing labour costs.
“We have already seen ODC launching its first Citizen Only Tenders called 3P3E in October 2023 where eight companies viewed the goods, but there were no bids. While in December 2023, six companies viewed the goods, and only two participated in bidding with one successful bidding, and in February 2024, a total of five companies viewed , three submitted bids and two were successful.”