Richest man

Chapter 43 Africa: Nicky Oppenheimer (1)
——Nicky Oppenheimer: Dictator of the Diamond Kingdom The origin of some wealth in the world goes back a long time, and the wealth history of South Africa's richest man, Nicky Oppenheimer, is one of them.

Before the 19th century, there were many "booms" in human history, such as the earliest "alchemy fever" and the "tulip fever" in the 17th century; The "Gold Rush" in California in the middle of the century, and the "Diamond Rush" in South Africa in the second half of the 19th century.These two crazes have created a group of people who "get rich overnight". The former is the richest poor man in the world - Suter (it is said that he owns all the land in San Francisco, USA, but he will never be able to get it) , and the "diamond fever" made the Oppenheimer family the richest family in South Africa and even in the whole of Africa.Nicky Oppenheimer, the richest man in South Africa we see today, is the third-generation offspring of that boom. In the 19 "Forbes" global rich list, Nicky Oppenheimer has assets of 19 billion US dollars , ranked 2005nd.

When Nicky Oppenheimer's grandfather Ernest first arrived in South Africa in 1902, when there were no independent British colonies there, he was drawn to this desolate place by an alluring story.It is said that a shepherd boy in South Africa picked up a beautiful stone on the side of the road, but he did not know that it was a priceless diamond. After exchanging a caravan, 1 cows and 10 fat sheep, this The "Star of South Africa" ​​with a rough stone weighing 500 carats doubled its value tens of thousands of times, and finally became a priceless treasure.This story happened in South Africa (in fact, South Africa does have a lot of diamonds, and it is still the largest diamond producing area in the world), which has attracted the attention of all the people in the world, so people from all over the world (mainly Europe) People) came to South Africa with all kinds of diamond hunters, and Ernest came to South Africa in this upsurge.

But Ernest is not a simple follower, or he is a bit different from most people: After several years of diamond panning, many people left with a lot of gold and diamonds, but Ernest Deciding to stay in South Africa, his heart is far from simply wanting to make a fortune, but has greater ambitions.

After Ernest settled in South Africa, he took over a diamond mine in Johannesburg.Soon, this diamond mine brought him a lot of wealth - he became one of the well-known local rich businessmen.After a series of events, Ernest unexpectedly became the mayor of Kimberley, South Africa and a member of the city council. His politically stable position brought Ernest huge gains in wealth and fame. .In 1917, Ernest registered and established South Africa's first mining company, the Anglo American Company, which also started the nearly century-long diamond journey of the Oppenheimer family.

Monopoly is the simplest and most effective strategy

From the very beginning, Ernest set the goal for his company to monopolize the diamond business, because he found that as long as the monopoly is realized, everything will be decided by himself.The goal was to defeat De Beers, South Africa's main rival at the time, in the early stages.At that time, the British colonist Cecil Rhodes had established a huge network in order to control diamond mining in South Africa and the diamond trade around the world, and the De Beers company he led was the best tool for British colonial expansion. A professional company named after the farmer Johannes Nicholas De Beers, born in 1888, mainly engaged in diamond mining and sales.

So Ernest identified his primary goal as crushing Rhodes' De Beers.However, this was a whimsical thing at the time, just like a snake trying to swallow an entire elephant.But Ernest is a master who is good at monopolistic competition. He adjusted his independent sales network twice, lowered the price of diamonds and entered into long-term vicious competition with De Beers.De Beers, which was controlled by the British colonists, gradually could not withstand the blow of the rapid decline in wealth. They worried that the lower the price of diamonds, the greater their losses, and that the stocks of diamond companies in their hands might become a pile of rubbish. Specially included in the De Beers system, that is, the merger of two companies together.Since then, Ernest's career has been smoother. With his back to De Beers, he began to eliminate other weak diamond companies one by one.

In the process of expansion, Ernest summed up several tricks: brutal price competition, sanctions and delineation of spheres of influence.Through these methods, by the 20s, with the death of Rhodes, in the entire diamond industry in South Africa, only Ernest was the only one who made a promise. In 1929, he almost wiped out all his opponents, and easily became the president of De Beers Diamond Company, a multi-shareholding company listed on the Johannesburg Stock Exchange. Ernest has basically completed his original goal. The rest was done by his son Henry and grandson Nicky.

During his son's tenure, a small episode occurred.Beginning around the 80s, competition from Australia, Canada and Russia hit De Beers hard.Henry decided to follow his father's example and fight his own way, so the vicious competition in diamond sales was staged again, and it lasted for many years.At that time, unprocessed rough diamonds had an annual market of about 80 billion US dollars, and De Beers' share was once squeezed to 45%.If it were any other company, such a global share would probably be able to satisfy all ambitions, but for De Beers, this figure can only mean a deep crisis.Reluctantly, Henry broke through the noble barriers of diamonds in the original sales concept, and began to advertise De Beers diamonds with great momentum, expanding the market and making diamonds a high-end jewelry that middle-income earners can also own.His strategy brought new opportunities to De Beers.

On January 1998, 1, Nicky took over as president of De Beers.Prior to this, Nicky, who grew up surrounded by the brilliance of diamonds, had accumulated at least 1 years of professional experience in diamond trading and mining management.Nicky started his first job in Anglo-American Company as personal assistant to the president after receiving a master of arts from Christ Church College, Oxford University, UK in 30.Nicky, who is familiar with the business, worked very smoothly in Britain and the United States. Six years later, Nicky became a department manager. In 1968, he also served as the manager of De Beers. In 6 Nicky became Vice President and Non-Executive Director of Anglo American.The following year, Nicky became Vice President of the London-based Central Sales Organization (predecessor to the Diamond Trading Company) and later Vice President of De Beers Consolidated Mines. In March 1978, Nicky was named Vice President of De Beers Century...

Whether it is Henry or Nicky, and no matter how their positions change, they seem to have inherited Ernest's business philosophy by nature.That is to say, since the Oppenheimer family first came into contact with diamonds at the end of the 19th century, they have always regarded monopoly as the ultimate goal of the company and have been working hard for it.And they have indeed done a good job, although in many cases, people do not recognize this behavior.

When De Beers, led by the Oppenheimer family, became the monopoly of the world's diamond industry, everything became simple.De Beers only allows 125 jewelry cutting companies to buy rough diamonds directly from it, and people in the industry refer to them as "De Beers 125".Every year, De Beers sells uncut rough diamonds to these jewelry cutting companies through 10 diamond appreciation activities, but the selling price is completely determined by De Beers unilaterally.De Beers sells the diamonds in pairs, of various sizes and qualities, in sealed plastic bags with a price tag. "De Beers 125" has no right to bargain, and these jewelry cutting companies can only decide whether to buy or not.Only when the weight of a single diamond is more than 10.8 carats, there is a very small room for bargaining.By controlling the supply of rough diamonds, De Beers has completely controlled the world's diamond market, which has provided great convenience for it to grab huge profits from diamonds.According to statistics, the current global annual diamond production is 1.2 million carats, equivalent to 24 tons.Each year, the mining cost of these 24 tons of diamonds costs about 20 billion US dollars.When the 24 tons of diamonds are sold to all dealers, the price paid by diamond dealers will reach 70 billion US dollars, and when the 24 tons of diamonds are all purchased by consumers, the total price paid by consumers is 500 billion US dollars .How lucrative are the diamond profits!
Because of this, there are always some small companies who want to get a piece of the action, but in that environment, it will be very dangerous for any small company to try to break the monopoly position of De Beers, because in most cases, they will Crazy revenge by De Beers Group.Their usual way of retaliation is to release a large amount of reserve diamonds from the De Beers central sales office in a very short period of time, causing the market price of diamonds to plummet, and most dealers simply cannot bear this kind of competition.

(End of this chapter)