DTC Chooses 11 New Sightholders

June 9, 2005

DTC Chooses 11 New Sightholders

The Diamond Trading Co., the sales and marketing arm of The De Beers Group, today confirmed the outcome of the application process for the 2005-2008 Supplier of Choice contract period. The company says 11 new applicants will become its clients, or sightholders, and all existing sightholder groups will receive supply contracts for the period starting July 7. DTC has advised all applicants of their sightholder status. It will not release a specific list until January 2006, to allow individual sightholders to make their own announcements.

All the new sightholders have met the rigorous and objective criteria required under Supplier of Choice, said DTC. A critical element of this relates to the customer's ability to add value and to help grow consumer demand, as sightholders will play a vital role in driving the consumer market forward, DTC added.

DTC also confirmed the success of Supplier of Choice in creating more value, together with supply chain efficiencies, has resulted in a gradual increase in production, in carat terms, during the last contract period, placing it in a position to satisfy more requests for supply from applicants for the 2005 contract period and add more sightholders from July on.

Launched in 2000, Supplier of Choice is DTC's business strategy to drive consumer demand for diamond jewelry in an environment where diamonds are facing greater competition than ever before from other luxury categories, such as international travel and luxury goods brands. To date, DTC said the strategy has helped to generate significant and positive benefits for the diamond industry by encouraging its customers to add value and to market diamond jewelry more effectively to consumers. In 2004, diamond jewellery sales increased by 8%, following a 7% increase in 2003.

"Our aim is to help grow the value of the diamond jewelry market, which we anticipate will be worth $75 billion by 2012 and the Supplier of Choice strategy is helping us, our sightholders and the wider industry to achieve this," said Gareth Penny, managing director of DTC. "I am delighted to welcome on board all our new and existing sightholders for the next supply contract period. They represent an impressive group of demand-driven, customer-focused businesses."

"We have been through a rigorous process in identifying sightholders for the new contract period. The standard of the profile submissions we received from applicant businesses was of a very high quality, demonstrating the progress that has been made by DTC and its sightholders in aligning their businesses," said Varda Shine, sales director of DTC. "It was also clear from the profiles that our clients are now well placed to continue adding value for their customers and helping grow demand – on which the future expansion of the industry rests."

The successful new applicants represent a range of different business models and come from many geographic locations, said DTC, which also noted sightholders will benefit from a number of improvements in the next supply contract period. In line with feedback from existing sightholders, the contract period starting in July 2005 has been extended from 2 years to 2.5 years. From July, sightholders will also have access to DTC's new value-added services, including supply planning tools, as well as growth and business development tools.

For the current Supplier of Choice applications, DTC applied the same process as it didi in 2003. This involves inviting current sightholders and new applicants to submit profiles, which are then assessed by the DTC using objective criteria. There are three elements to the process:
• Assessment of the relative performance of applicants against six key criteria: financial standing, market position, distribution abilities, marketing strengths, technical and manufacturing ability and compliance with criteria relating to business ethics and DTC's Best Practice Principles.
• Application - DTC also takes into account the rough diamonds that clients request to be supplied.
• Availability - it is important that DTC can meet the supply request of the applicants.

by Peggy Jo Donahue

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