HB Antwerp plans expansion after gov’t deal
Mbongeni Mguni | Monday April 3, 2023 06:00
HB Antwerp, a three-year-old firm that focuses on applying high technology to extract the best value from the diamond ecosystem, opened a state-of-the-art facility at the Diamond Technology Park on Monday.
Last November, the firm leveraged its technology, which includes robotics, to secure a ten-year deal with Lucara last year under which stones from Karowe bigger than 10.8 carats are sold to HB Antwerp at prices based on the estimated polished values, rather than the industry standard where traders purchase based on rough values.
According to HB Antwerp, the projected polished price is determined using “state-of-the-art scanning and planning technology and is then adjusted through top-up payments based on actual polished sales, less a fee, and the cost of manufacturing”.
An earlier 24-month arrangement between HB and Lucara reportedly resulted in 40% higher diamond royalties to the Botswana government over the period.
At the launch, President Mokgweetsi Masisi announced that government had decided to take up 24% equity in HB Antwerp and provide the firm with a portion of the Okavango Diamond Company's (ODC) rough diamond supply for five years. Details of the value of the equity stake and the percentage of ODC’s supply going to HB Antwerp will be clarified in two weeks when the two sign a form agreement, officials said.
HB Antwerp co-founder, Rafael Papismedov, told BusinessWeek the firm had secured land within the Innovation Hub and was planning to invest “a lot of money” into an expansion of the facility and activities launched on Monday.
It is expected that through the expansion, HB Botswana, the Antwerp firm’s local subsidiary, will employ 485 employees by 2026, up from the current 30 employees.
“The facility will be doing everything from in-taking rough diamonds, scanning them, analysing them, planning them, cutting them, polishing them, to branding, marketing and sales; everything will be done from here,” Papismedov told BusinessWeek. “What we want to build over there is at least a 15,000 square metre facility which will probably be one of the largest facilities. “This facility is not only about the size, but the equipment, the technology, and the methodology that will be brought inside.”
He continued: “We are going to invest a lot of money into it. “It’s going to be in the spirit of the Innovation Hub, green energy, full of light, full of glass and openings, and also to express our vision of transparency and openness to society.”
Papismedov said HB Botswana’s existing and planned expansions had virtually “limitless” capacity in terms of their output as the technology underpinning the operations had been developed in-house.
“It’s a limitless capacity of carats we will be able to process at our facility and I don’t say it as stupidity, but it’s limitless,” he told BusinessWeek. “This is because the technology belongs to us and if we decide we need 100 robots, we will have them. If we decide we need 300 robots, we will have 300 robots next year. “The capacity is limitless but it will take time to train the humans and our philosophy is to train as much as possible that new, fresh blood into the company. “The young Batswana in the organisation. Those are not people we are going to hide in a factory; those are people we are putting at the front of the company. “They are going to be the ones speaking the HB language in the future.”
Papismedov said HB Antwerp, from its beginnings, was built for scalability.
“Our robotics that we developed ourselves and got them even to a stage that they are now in the second generation, we could have sold two, three hundred robots and we could have made $40 to $50 million profit, but we decided not to sell any. “So we are now preparing more robots, more and more humans, more and more technology in order to bring that scalability to Botswana and we are going to start strong and just drive even faster and faster,” he said.