Investment Prospects in Botswana

“Apart from diamond manufacturing, jewellery-fabrication as well as some other sectors, offer good scope for investments in Botswana”. This is stated in an exclusive interview by Vishal Doshi, group executive director of the leading Indian diamond and jewellery manufacturing firm, Shrenuj & Company Ltd. and Consul of Botswana in Mumbai. A commerce graduate from the Mumbai University, he has studied finance in the USA and is now involved in strategies and systems for achieving the group’s all-round growth. He throws light in this interview on Botswana’s economy and its prospects. Excerpts….

Diamond World : What is the progress of diamond manufacturing industry in Botswana. What are its prospects ?
Vishal Doshi : Botswana produces rough diamonds worth US$ 3.46 billion. Of this, stones worth about US$ 500 million are earmarked for local processing. Presently, 16 units are engaged in processing diamonds there. There is a steady increase in the production of polished diamonds there.

Diamond World : How many more diamond manufacturing units are expected to come up, say by the end of next year?
Vishal Doshi : Currently the government of Botswana is not granting any more licences for this industry.

Diamond World : What incentives do diamond manufacturing units in Botswana get at present? How is the availability of artisans?
Vishal Doshi : Availability of high quality rough diamonds from the local source is the main incentive that diamond manufacturing units get there at present. There are no other specific incentives for this industry. The supply of good quality rough diamonds is an important advantage enjoyed by the DTC-Botswana Sightholders.
Availability of skilled labour remains an issue in Botswana. The industry is training the local workforce. The labour cost there is comparable to that in India which is a fraction of the raw material cost.

Diamond World : It would appear that at present about 16 units have been licensed for diamond manufacturing industry in Botswana. How are the chances of new entrepreneurs getting the facilities like those available to those that have already been licensed?
Vishal Doshi : As I mentioned earlier, the government does not plan to issue further licences for manufacturing diamonds in Botswana. One can join some existing unit. In near terms, if the reports in the media are any indicator, Botswana may become a home to trading in rough diamonds. But it is too early to comment on this development.
However, this is just a pilot study which would help the government to create a platform for the manufacturing industry in Botswana.

Diamond World : Once the units already licensed reach their full capacity will they be able to get for their expansion additional supply of roughs from the local sources, or will they be required to turn to the open market for their additional requirements ?
Vishal Doshi : Currently, only a small proportion of the earmarked capacity is being utilized and there is enough room for local units to grow, since Botswana is the largest producer of rough diamonds in the world.

Diamond World : You also have a manufacturing unit in Botswana. How big is your unit? What are your further plans in Botswana ?
Vishal Doshi : We have recently started manufacturing operations in Botswana with about 120 workers plus high degree of automation. We have a long vision for Botswana. We will continuously increase our diamond manufacturing capacities and add jewellery manufacturing operations there, thus adding more value to local diamonds. In the coming 18 months or so, we plan to double our staff-strength there. We will continuously step up our diamond polishing and jewellery manufacturing operations in Botswana.

Diamond World : Are there any jewellery units in Botswana at present?
Vishal Doshi : There are no significant jewellery units in Botswana at present. We plan to be among the first to start a modern unit of this kind. There will be challenges in terms of finding local skilled staff and support for machinery, but we have plans to overcome such issues.

Diamond World : Which are the other areas where Indian entrepreneurs can invest fruitfully there?
Vishal Doshi : Botswana is a mineral-rich country. It has large deposits of coal, iron ore, copper, nickel, silver etc. which offer opportunities to global players. The country has a very stable economy with deep democratic roots. It is poised to become the financial hub of Africa.

Diamond World : How is the two-way trade between India and Botswana? What are its prospects ?
Vishal Doshi : The trade between the two countries at present largely comprises diamonds. In some other areas however, there is a significant scope. For instance, there is good scope for exports of Indian drugs and pharmaceuticals to that country. Also there are good prospects for export oriented investments in Botswana which provides preferential access to South African Customs Union (SACU), USA and EU markets. Besides there are possibilities of co-operation in information technology, human resources development, engineering and SSI sectors. Its tourism industry is also growing. Despite its small population, Botswana is a rich market with per capital income of over US$ 3000, the highest in Africa.

\*Diamond World : Botswana is expected to have a big diamond sorting centre. How soon is it expected to start functioning ? Is it likely that the Diamond Trading Company may shift some of its activity from the UK to Botswana ?
Vishal Doshi : The proposed unit Diamond Trading Company Botswana (DTCB), is being developed as the major partner of the government in distribution of diamonds. This sorting unit is expected to be operational by the end of 2010. It may then decide what additional activities it can take up.