21.08.2019
 DE SODAS PRESENTATION Article

" A Diamond is forever..

nevertheless power can be not”

Deb E W EE 3rd there�s r S C A S i9000 E H T UD Y

A Cash Cow Industry

An estimated US$13 billion well worth of difficult

diamonds happen to be extracted every year

 Removed diamonds can be utilised for

industrial purposes or in the luxurious sector

(gemstones)

Diamond jewellery is worth more than US$72

billion dollars per year (very high profitability)

The biggest slice of the cake

A giant's first measures

 Founded in 1888 in South Africa by Cecil

Rhodes, Para Beers quickly obtained a dominant

placement in the world precious stone market.

 In just a several years, DeBeers started to be the leading

firm of an worldwide cartel, typically

thanks to Ernest Oppenheimer as well as its heirs.

" Common sense tells us that the only way

to improve the value of diamond jewelry is to

make sure they are scarce, that may be to reduce

production”

E. Oppenheimer

The Diamonds " Trilogy” for success

You will find 3 primary pillars to get the maintenance of

DeBeer

major position with time:

Control of source through gemstone

stockpiles

DeBeers sales and distribution arm:

CSO/DTC

 Marketing and advertisement

The Lion and the Gazelle

 In the 80s Zaire (DROC) measured for 3% of

world production of business diamonds and

was person in the De Beers' association

 The region asked for a reduced a controlling fee,

asks for were declined and in 81 Zaire left

the CSO

 8 weeks later the market was overloaded by

diamond jewelry and the value fell dramatically.

 Strike by the deficit of foreign currency Zaire

asked to be admitted once again in the affiliation.

 Obviously De Beers imposed even worse conditions

 There is no formal proof that it was De Beers,

but just De Sodas had the power to act through this

way.

Economic Hurricane by Israel

In 1970s, Hyperinflation in His home country of israel and Retailers wanted to hoard up

expensive diamonds for advertising them later on.

PDVic < PDViD

To stop retailers from breaking away from its cartel, DeBeers:

- Produced temporary surcharge.

- Slice Israeli dealers' quota by 20%.

-- Dismissed these people from the CSO

As an outcome, Israeli dealers again conceded to DeBeers contract and paid a

defection great.

Thus the DeBeers cartel was increased.

From Russian federation with like (…and return)

Why is Russian federation so important?

 Large quantities of expensive diamonds discovered in The ussr in

1957: it became one of the most powerful single producer

beyond the cartel (20-30% of planet's production)

 Therefore DeBeers was seriously under risk

 Quickly negotiated a

(Mirny Gemstone Mine, present in the

late 50s)

Act I: The trick Agreement

The estimated car finance terms were:

 DeBeers dedicated to purchase 95% of

Russian output and trade that with CSO.

 Soviet Diamond Industry was in order to cut,

enhance and sell the rest of the 5% autonomously.

 Russian diamonds had been paid a cost 10%

greater than general association price.

Action II: The last Agreement

 In the eighties Russia deviated from the arrangement

 It was not penalized! On the contrary, a compromise was

reached:

-- Soviet Union officially became a member of the agglomeration

- Para Beers certain steady influx of foreign exchange by buying every its outcome

Concluding remarks

While coach anyone how to possible to force little players

(Zaire) back to the cartel, that wasn't so simple

pertaining to bigger manufacturers (Russia).

 DeBeers' business fell by 90% in the

1980s to less than 40% in 2012

 " In the event everyone supports to the association, then

everybody wins. When anyone is silly enough

to be able to the contract, then EVERYBODY

LOSES! ”