De Beers is considering ways to restructure mines, expand in jewellery and overhaul diamond sales, as the world’s biggest and oldest producer rethinks its entire business in an industry left paralysed by the pandemic.
The company founded by British imperialist Cecil Rhodes in the late 1800s was under pressure even before the coronavirus to reform. While De Beers boasts one of the world’s most powerful luxury brands, it remains tied to traditions that in some cases have barely changed for decades. Chief executive Bruce Cleaver began a modernisation process after taking over in 2016, and those efforts will be expanded and accelerated.
With the entire industry brought to a halt by the pandemic, De Beers sold just $56 million (Dh205.7m) of rough diamonds in the second quarter, down about 96 per cent from a year earlier. RBC Capital Markets expects the company to post a $100m loss in the first half of the year.
In a letter to staff last week, Mr Cleaver outlined a list of ways the company, owned by Anglo American, can narrow the gap between its revenue and costs. These range from selling rough stones “more quickly and in a more integrated way”, to rethinking how it recovers diamonds, according to a copy of the letter seen by Bloomberg. Diamond demand is likely to fall in the near term, he said.
“Covid-19 has compounded and exacerbated difficulties that already existed in the diamond world,” Mr Cleaver said. “These difficulties, which have inhibited our growth over the past several years, have become even more urgent to address. They require us to act now to protect the short-term health of the business while refocusing and reorienting it to realise our long-term potential.”
The details of the changes are still being worked out, Mr Cleaver said. However, the process is likely to involve job cuts, according to people familiar with the matter.
A De Beers spokesman declined to comment.
One longstanding tradition is the way the company sells its diamonds. De Beers holds what it calls “sights”, during which its 80-odd accredited customers fly to Botswana for about a week, where they inspect and purchase stones. The company sets the prices and its customers, known as sightholders, are not able to negotiate, a policy that has frustrated many of its customers in recent years.
Overall, it’s become clear the company needs to accelerate changes to the way it operates, Mr Cleaver said.
“We are now working through a process to start to shape an organisation that is better equipped and empowered to deliver this change,” he said. “It won’t be easy for any of us. We will, very likely, come out of this a more focused and more connected business.”
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
Global state-owned investor ranking by size
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How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
Copa del Rey
Barcelona v Real Madrid
Semi-final, first leg
Wednesday (midnight UAE)
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
UAE currency: the story behind the money in your pockets
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
