State Diamond Trader

Strategic Plan2012/13

Introduction

The State Diamond Trader (SDT):Has been in operation for 5 yearsHas 92 registered clientsHas sold diamonds to an average of 60 clients annuallyHas provided support to its small clientsHas inspected & purchased from all large & medium producersHas been participating in KPCS processesIs currently working on inspecting & purchasing from small producers & diggersIs planning further growth through support for its clients and other work

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Strategic Goals

1. To ensure continued sustainability of the State Diamond Trader

2. Be an efficient and professionally managed organization

1. Promote and uphold efficient governance

2. Ensure constant access to rough diamonds

Strategic Objectives

Improve profitability of SDT operations to ensure its sustainabilityFacilitate support to SDT clientsDevelop and acquire appropriate Human Resource capacityDevelop, implement and maintain systems, procedures and controls in line with PFMA and other applicable policiesDevelop and maintain trading relations with other African diamond producing countriesImprove positive relations with producers to access better quality goodsEnforce compliance with the legislation on trading matters

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Improve profitability of SDT operations - ensure its sustainability

Key Activities

Improve stock turnaround time in terms of SDT Stock Holding PolicyMaintain gross margin rates Review and streamline operational expenditure Ensure that trading policies create an enabling environment to deliver required profitIncrease number of and value of sales to HDSA clients

Measures 2012/13

Measures:

Reduced turnaround times on stocksGross margin maintained at targetImprove efficienciesA review of trading policies Increased number of and percentage value of sales to HDSA clients

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Targets 2012/13

Targets:

Below a weighted average of 14 days  Minimum of 4% per trading cycle Operating expenses not exceeding budget September-Annually 20% p.a. for 2012-2014

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Key activities:

Facilitate technical and business management training• Training on branding and marketing• Facilitation of training and mentoring of HDSA clients

Provide market intelligence • Market briefings at Client information sessions on a quarterly basis • To sponsor small client participation at Jewellex Show in Sep 2012 

Facilitate access to finance

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Facilitate support to SDT clients

Measures 2012/13

Measures:

Number of clients trained

Market Intelligence briefings

Increased number of trading clients

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Targets 2012/13

Targets:

10 HDSA clients p.a. Growth in business management confidence

Quarterly

10% p.a.

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Develop and acquire appropriate Human Resource capacity

Key Activities:

Implement HR policy

Review HR Plan

Ensure continuous capacity building for all personnel

Review and monitor training provided to ensure appropriateness

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Measures 2012/13

Measure:

Compliant HR processes HR Plan responding to SDT requirements Relevant training for all diamond trainee personnel Skills gaps identified and relevant courses/ training initiated

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Targets 2012/13

Targets:

On going, annually April 2012 Annually Quarterly and on going

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Implement and maintain admin systems, procedures and controls

Key Activities:Improve the use of admin processesEnsure quarterly Internal Audits are conductedTraining staff on all policies and business processesDevelop and get approval of Asset Management PolicyMaintain asset register Develop and approve IT Policies and ProceduresAcquire and maintain adequate insurance for diamond stock and SDT assetsReview and maintain compliant procurement procedures in line with SDT Supply Chain Policy

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Measures 2012/13

Measures:All approved procedures implemented and monitoredTested internal controls and systemsImplementation of and compliance with all policies and proceduresCompliant legislative framework on assetsSecured assetsSecured IT environmentAppropriate IT support for SDT businessSufficient insurance for all stock and assetsCompliant procurement procedures

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Targets 2012/13

Targets:

Positive Internal Audit results Quarterly QuarterlyApril 2012On goingMarch 2012On goingMay 2012April 2012

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Adhere to Corporate Governance, Legislation and Policies

Key Activities:

Ensure Audit and Risk Management Committee meetings are heldPreparation and approval of Statutory reports Address All Audit findingsConduct annual Risk Assessment

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Measures 2012/13

Measures:

Compliance monitoring and guidance to BoardSubmission of quarterly and annual reportsImproved performance on systems and controls Frequently assessed risk profile Risk appropriate mitigation plans

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Targets 2012/13

Targets:

Minimum of 4 Meetings per annumQuarterly and annually reportingQuarterly and annually reportingMarch 2012Controlled risk environment,On going monitoring of environment

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Enforce legislation compliance

Key Activities:

Ensure all producers declare their production cycles

Inspect rough diamonds produced in SA

Purchase up to 10% of total SA production (volume and value)

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Measures 2012/13

Measures:

Increased amount of rough diamonds available to SDT and its clients

Increased % of Productions inspected

% of SA production purchased

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Targets 2012/13

Targets:

10 additional Producers trading with SDT by end 2013

90% by 2013

  9% by 2012-2013

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Key Activities:

Update client demand analysis

Engage producers on suitability of supply per SDT Producer Engagement strategy

Improve relations with producers

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Measures 2012/13

Measures:

Report produced December annually 

Reduced number of disputes with producers

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Targets 2012/13

Targets:

5% increase of preferred rough diamonds bought by 2014

50% reduction in disputes and on going

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Develop and maintain trading relations with other African diamond producing countries

Key Activities:

Test purchasing with 3 African countries producing diamondsNegotiate supply agreements with 3 selected diamond producing countriesContribute to KPCS development and in RSA KPCS compliance processes Attend KPCS meetings as part of RSA team

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Measures 2012/13

Measures:

Costs and sales analysis of purchases made from 3 countriesSupply agreements concludedCompliant KPCS processes locally and internationallyCompliance with KPCS on international rough purchases

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Targets 2012/13

Targets:

March 20131 country agreement by March 20131 KPCS compliant purchase of rough by March 2013June and November annually

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In Conclusion

The State Diamond Trader:Has spent its formative years creating capacity, and developing skills Instigated procedures that have enabled it to establish itself in the diamond industry

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State Diamond Trader

Has proved itself as a viable commercial operation during the most volatile conditions the industry has seen in living memory

With no recourse to public funding, it has had to constantly innovate to ensure its sustainability

Will continue to improve on its competencies during the year

State Diamond Trader

Thank you

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