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KGK says Botswana lacks capacity, expertise to produce diamond jewellery

07 august 2017

omphile_masuku_xx.jpgKGK Diamonds Botswana opened its operations in the southern African country and the world’s second largest diamond producer in value terms, in 2014 and it is currently cutting and polishing rough sourced from De Beers’ Diamond Trading Company.

Company representative Omphile Masuku told Rough & Polished’s Mathew Nyaungwa in an interview that Botswana was not as good as India and Belgium in producing diamond jewellery at the moment.
So when they locally cut and polish diamonds they are shipped to India and Belgium for further value-addition.

She, however, said that there was a possibility that the company will in future start producing its own diamond jewellery.

Below are the excerpts.

Can you shed some light on your operations as KGK Diamonds Botswana?

KGK Diamonds Botswana is a company focused on diamond cutting and polishing. It was first originated in 1905 in India and we only opened our operations in Botswana in 2014, so we have offices and branches in Namibia, South Africa, Belgium and India. So, in Botswana we get our diamonds from DTC... We ensure that the diamonds are authenticated, they have a certificate and they are original, which is why we take them from DTC. We take them as they are, we take them to our company where they get cut and polished. So, we plan out the diamond from scratch, we get like a block and we need to know how we are going to cut it, where we are going to cut it and what is going to come out of it and how many carats etcetera. So from there they get shipped after they have been polished to our other branches in Belgium and India for further processing, be it diamond manufacturing, jewellery or rings and all that, so that’s what we do.

So basically, you are just cutting and polishing and you don’t produce any diamond jewellery in Botswana?

We basically cut and polish. It’s shipped off to Belgium and India because that’s where they specialise in jewellery making. Here we specialise in cutting and polishing.

Any plans to make jewellery in the country?

Maybe in future, because we are looking at the market in Botswana, we are still new and the expertise here as well in terms of jewellery making. I don’t think it’s as good as in India and Belgium where they have already established offices and they have been operating for over 15 years. So here I think, first, we want to settle down in terms of our cutting and polishing and then expand if it works well.

What is the size range of rough stones that you cut?

We cut from 0.14 carats to 20 carats.

Do you pre-order rough stones from DTC?

We only buy diamonds when sightholder sales are conducted once every month, you can’t make a pre-order. Diamonds are put on display and you buy what you see.

How many carats of rough diamonds do you buy on average every month?

It’s probably more than 2000 carats per month.

Some well-established cutting and polishing firms in Botswana closed down their operations last year. What were the challenges that faced the sector?

I think the challenge had been the prices of rough stones. Prices of rough stones increased leading to companies closing down. They could not afford to buy diamonds from DTC anymore… I am not quite sure what the full story was but I know that due to the high prices of rough stones companies closed down, they won’t be able to make any profits. There is a company, for example called TMC (Teemane Manufacturing Company) that closed down. It was one of the largest employers with over 300 employees.

How are you managing under such difficult conditions?

I think, we came at a time when people had already invested…I wouldn’t say we felt the effect [of high rough prices as] we were backed up by the fact that there are people running the company with a lot of experience from South Africa and Namibia where the market was also turbulent, so they have experience and when people were closing down, we were just starting, so we just rode the wave, let’s say.

What is your general assessment of the state of diamond beneficiation in Botswana?

It’s coming up, because companies are now opening, though not at the rate that it was back then when it was flourishing. There is a sense of opportunities, unlike three years ago when we were just starting, people would ask ‘why are you even doing this?’. But now it’s okay there is a future.

What is your relationship with the diamond hub?

We have a good relationship with them, they try to help us as much as possible especially when we have requests for expatriates... Although we had certain issues, for example when our applications were taking long or not approved, they really helped a lot.

How many workers do you have?

I have 117 workers, of which 40 are expatriates and the rest are locals. The expatriates are basically there to train, but they polish as well. We have machines that have never been in the country so they teach our local employees.

Going forward where do you see yourselves, say in five years?

I wish the management were here to explain that. However, probably expanding, we have now decided to buy a plot (land) to build our own building so we can hire more people and become more settled. Those are the future plans.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished


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