VENTURES AFRICA – Last November, South African diamond magnate Nicky Oppenheimer made the momentous decision to sell the 40 per cent stake in De Beer’s, the largest diamond producer in the world. Anglo-American’s $5.1 billion takeover will end the control of the Oppenheimer family over De Beer’s, which began when his grandfather Ernest took over the firm in 1927. Ever the hard-headed businessman, however, Oppenheimer is already looking forward to new investments. He is worth a cool $6.5 billion. Tom Jackson looks at five of the lessons from his career.
Believe in Africa
Oppenheimer has controversially stated in the past that Africa is suffering from “donation fatigue”, and that there are ways for the continent to go it alone without help from western governments and NGOs.
“Because I am an African I reserve the right to say that Africa does not exist simply to make people in the UK, or anywhere else in the developed world, feel good about themselves,” he said back in 2005. This is something he reiterated after announcing the sale of his stake in De Beer’s.
“I’m a great believer that, if you know how to operate in Africa, there are unbelievable opportunities.”
Be down to earth
Businessmen all over the world will tell you that the trick to success is not getting ideas above your station or losing touch with your customer base. Oppenheimer, comments about aid aside, appears to be the master of discretion and being down-to-earth.
Unlike many of the business elite, he dislikes opera or theatre – “I’m a philistine” – and he is quick to quash suggestions that he collects antique books. “No, that was my father,” he says.
In choosing to sell his family’s stake in De Beer’s, Oppenheimer has proven the importance of thinking with the head rather than the heart in matters of business.
“Obviously very emotional for all of us in the family when we debated whether this was the right thing to do or not,” he said upon announcing the news. “You know, it’s a 100 years of history – 1902 when my grandfather came out here first to join the diamond business in Kimberley. So indeed very emotional. But at the end of the day we in the family decided this was indeed the right thing to do, and it was a unanimous decision. And in a sense you’ve got to move on and now’s the time to look to the future and think what exciting things we can do in Africa in the future.”
Even at 65, the future is something that is very clearly on Oppenheimer’s mind and he is planning on reinvesting the money made from the sale to Anglo-American once the deal is completed later this year.
“We’re going to be obviously looking at investments,” he says. “That’s a compensation for the sadness and the emotional feeling we have about De Beer’s. We will be looking for opportunities and we are very Africa-orientated and we are going to be looking, obviously, around the world, but there will be a very clear African bias to what we hope to do in the future.”
Know the art of recovery
After struggling through the recession as demand for luxury goods sagged, De Beers appears to have righted the ship. Revenues surged 53 per cent to nearly $5.9 billion in 2010 from a dip in 2009. Such impressive performance has led some analysts to assert that the offer from Anglo American undervalues De Beers, though Oppenheimer denies this. “Anglo American is the natural home for our stake,” he says.