RAPAPORT… De Beers Appoints Philippe Mellier as New CEO
De Beers named Philippe Mellier as its new chief executive officer (CEO). Mellier, currently president of Alstom Transport and executive vice president of Alstom S.A., will formally join De Beers on July 1. Former CEO Gareth Penny stepped down in July 2010.
“This appointment signals our determination to lead in a rapidly changing world,” said De Beers chairman, Nicky Oppenheimer. “In Philippe, we have found a proven leader with a reputation for delivering results while shaping businesses for the long term.” Oppenheimer added that the company was determined to find a leader with a proven track record of delivering large projects, understanding the needs of key stakeholders, including government partners and clients, and an instinct for shifting consumer patterns.
As president of Alstom Transport, Mellier oversaw a business with sales of almost $8.5 billion (EUR 6 billion) during the last fiscal year and was instrumental in building a major partnership in Russia. De Beers is 45 percent owned by Anglo American, with the Oppenheimer family holding 40 percent and the Botswana government the remaining 15 percent.
In other news, De Beers Diamond Jewellers (DBDJ) appointed Devon Pike as CEO of its U.S. business. Pike was most recently a senior vice president at Juicy Couture. “The U.S. market is strategic for us and the recruitment of Devon is a sign of our commitment to further developing our activities in one of the world’s largest jewelry markets,” said François Delage, CEO of DBDJ, which is a joint venture between De Beers SA and LVMH Moët Hennessy Louis Vuitton.
Diamdel Sells All Lots at Recent Auction
Diamdel offered and sold 218 lots of rough diamonds at its second cycle of auctions that ran from April 13 through May 3, 2011. Diamdel noted that 161 different businesses participated and 72 companies placed the winning bids, with firms from Belgium, Israel, India and across the Asia-Pacific region vying for Diamdel rough.
The company observed that rough demand remained strong across the board with price growth experienced in sizes above 2 carats, as well as for grainers and small stones. Prices for near-gem and large ranges stabilized from recent highs.
By value, 68 percent of lots were sold to nonsightholders and 32 percent were purchased by sightholders. Sales were noticeably softer to larger firms while buying was strong by specialist dealers who focus on a narrow range of goods.
DTC’s May Sight Estimated at $600 Million
The Diamond Trading Company’s (DTC) May sight achieved an estimated value of $600 million following further price increases. Sight participants at the De Beers subsidiary reported that prices rose by an average of 2 percent to 3 percent with prices on some smaller Indian goods up by double-digit percentages.
Sightholders noted that premiums on Indian goods were significantly down after the sight, while premiums on better-quality stones remained relatively strong.
DTC spokesperson Louise Prior reported strong applications for goods at the sight, but relatively little activity during the week. Most agreed that demand softened slightly in May after months of strong rough trading. Some attributed the slump to seasonal factors, with Indian factories closed for summer vacations in the second half of the month. “May is generally an off period,” stressed one sightholder.
Another sight participant noted that while the price hike was unsettling, sightholders had little to complain about as they have made “good money in the past few months.”
“We are now selling goods that we bought in January so the results are positive,” another sightholder explained, citing the strong performance of polished diamonds since the beginning of the year. He added, however, that working at current prices, the yields on the polished remain at zero.
Average prices of certified polished diamonds on the RapNet-Rapaport Diamond Trading Network rose 14.3 percent in the first four months of 2011.
Rapaport estimates indicate that DTC sales have increased 12 percent year on year to $2.35 billion from the first four sights of 2011. The next sight is scheduled to take place on June 13, 2011.
