ODC revenue reaches historic high
Although staying alive has been the priority for most of us this year, it seems the lure of diamonds still burns bright throughout much of the world.
For state-owned, Okavango Diamond Company (ODC) this has resulted in record revenues.This week, the rough diamond marketing company announced its revenue for the first eight months of the year stood at a jaw-dropping US$830 million (roughly P8.3 billion).
With four months of sales still to be included, the figure already dwarves the US$181 million raised in the whole of 2020 – indeed it represents a 484 percent increase!
It is also way above the US$500 million the company rakes in on average every year.According to ODC Managing Director (MD), Mmetla Masire, the improvement is attributed to several positive market dynamics as well as ODC’s ability and accuracy in reading its customers’ buying behavior.
“We were able to make informed decisions about how, when and what we should sell,” explained Masire, who took over as ODC MD in July.
“Early on, before the government lockdown, ODC started pre-emptively planning its business continuity framework to handle Covid-19 situation while helping generate sustainable economic benefits for Botswana and Batswana,” continued Masire, adding ODC’s vision is to be a world leader in the sales and marketing of natural diamonds.
ODC was able to achieve its current financial performance despite economic disruptions caused by imposed lockdowns, international travel restrictions, business closures and a consumer demand said to have been at an all-time low.
The company also had to contend with low supply and then an oversupply of rough diamonds which saw market prices collapse.
According to Masire, a shortage of supply in rough diamonds fuelled an unprecedented price spike, with demand throughout the diamond pipeline remaining robust.
Masire revealed industry profitability remains healthy and overall liquidity is good.
“Expectations are that nothing will change until at least the end of the first quarter next year,” he concluded brightly.
Going forward, ODC Board Chairperson, Dr Gape Kaboyakgosi said the company, which sources most of its diamonds from Debswana, hopes to receive a greater allocation of Debswana’s run-of-mine production. Currently, it stands at 15 percent.
“On the back of a robust five-year strategy, the future impact of ODC on the domestic economy, as well as a player globally, cannot be overemphasized,” said Dr Kaboyakgosi.
“As you are all aware our diamonds are sourced from Debswana which accounts for over 98 percent of Botswana’s diamond production. We are, therefore, relieved, and happy to see that Debswana has recently increased production and look forward to future increases,” he disclosed.
Dr Kaboyakgosi said since 2013, when ODC started trading as part of the broader strategy for the expansion of Botswana’s diamond industry, the company has contributed immensely to the emerging phase of Botswana’s diamond industry.