IDEX India Retail, September 2012

SPECIALREPORT IIJW Grabs Attention With Sizzling Style & SocialSensitivity

SHOWREPORT

IIJS Lifts IndustrySentiment

SPOTLIGHT

Swarovski’s Jewellery Trend Report For TheComing Year

MARKETREPORT

Concern As DomesticDemand Fades

RNI Regd. No. MAHENG13178/12/1/2012-TC Rs.150 Vol. No.1 Issue No.2, Mumbai September 2012 Rs.150

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kar052312j07 KARP print ad@Idex indian magazine.pdf 2012-5-23 18:24:16

4 IDEX INDIA RETAIL MAGAZINE| NO 2

magazineindia retail

05 FROM THE EDITOR’S DESKSeparating Value From A Weak Currency

06 MUMBAI DIAMOND MARKET REPORTConcern As Domestic Demand Fades

08 SPECIAL REPORTIIJW Grabs Attention With Sizzling Style & Social Sensitivity

17 RETAIL ET CETERASeptember Stunners

22 SPOTLIGHTSwarovski’s Jewellery Trend Forecast For The Coming Year

27 DIAMOND RETAIL BENCHMARK

34 COVER STORYDelivering Diamond Value With A Weak Rupee

42 SHOW REPORTIIJS Lifts Industry Sentiment

49 INDUSTRY NEWSEnd Of An Era: Oppenheimer Family Exits De Beers

44 STONE SOURCESSierra Leone’s Diamond Mining Transformation

w w w . i d e x o n l i n e . c o m

S E P T E M B E R 2 0 1 2 VOL. 1 No. 2

Editorial Department EDITOR-IN-CHIEF Vinod Kuriyan

EDITORs Edahn Golan, Danielle MaxIDEX ONLINE REsEARCH Ken Gassman

INTERNATIONAL CORREsPONDENT Tamar Katzav

ADMINIsTRATION & MARKETING Managing Director Yaron BarzilayMarketing Manager Kuldip Bedi

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Printed, Published and Edited by VINOD KURIyAN on behalf of IDEX ONLINE (INDIA) PVT. LTD.

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Editor: VINOD KURIyAN

Reprints of individual articles are obtainable on application to the editor. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior written permission

of the Copyright owner.

ISSN 0334-68382003 IDEX ONLINE S.A.

CONTENTS

SEPTEMBER

Editor

5IDEX INDIA RETAIL MAGAZINE| NO 2: EDITOR

SEparating ValuE From a WEak CurrEnCy

by VINoD KurIyAN

ne of the immutable facts of life is that business is cyclical. As we enjoy the good times, we have to ready

ourselves for the trough that is waiting after the wave has peaked. The current economic situation both within the country and the around the world in general, is simply part of that great cycle of ups and downs. Put another way, it means that good times are most certainly ahead. The trick is to stay afloat while in the trough and not go under before the next up-cycle comes.

The trough the Indian gem and jewellery industry is in at the moment, has been generated by a range of forces, many of them too big and powerful for even a whole country to cope with, let alone an individual company. The almost vertical dip of the Indian rupee against the US dollar is one of those forces.

Economists have explained that as India is a net import economy for goods even though we a strong service export sector – the trade deficit is pegged in the region of $197 billion – the strong demand for the US dollar made it inevitable that the rupee would slide in value against it. And as India is unlikely to become a net exporter of goods even in the medium term, the weak rupee is something we will have to live with for some time to come.

Further, given that that India’s established export markets for gems and jewellery, the US and Europe are also still

shaky – Europe seems teetering on the brink of certain economic disaster – the only markets that can be relied on in the near term at least are the emerging ones of China and India’s own domestic one.

Thus the diamond, gem and jewellery industry in this country has to refocus its efforts deliver value to domestic consumers who are, nonetheless reluctant to pay what they perceive as far too high prices for the industry’s product – simply because the weak rupee has driven up the price of gold, diamonds and gemstones, which are all imported. The age-old method of relying on the value of the component materials to deliver overall product value to the customer is therefore extremely unlikely to get the industry anywhere.

The Gem & Jewellery Export Promotion Council (GJEPC) has the right idea in trying to get the industry to do something to excite the consumer and deliver value in other ways. The IIJW has done exactly the right thing by sparking a social and emotional interest in the industry’s product (see Special Report). Meanwhile, those relying on intrinsic material value alone to sell their product at the IIJS, have realized that intrinsic value is a fickle thing and not to be relied on (see Trade Shows).

Only a new value proposition will enable the industry survive and thrive in the future. idEX

o

6 IDEX INDIA RETAIL MAGAZINE| NO 2: MARKET REPORT

MUMBAIDIAMOND MARKET

REPORT

by VINAY PAREKH

CONCERN As DOMEsTIC DEMAND FADEs

here is concern in the Mumbai diamond market as domestic demand has been fading of late. Up until

now, this was what kept the industry going through the turbulence of the European debt crisis and the stumbling US economy. Business sentiment is depressed and the overall mood now is one of caution.

There are also no takers for rough diamonds even at softer prices and market watchers predict a full rough price correction in the near future. The domestic

slowdown has also meant that polished sales have been slow.

There was no noticeable demand from the upcoming India International Jewellery Show (IIJS) to provide some lift in the market and the outlook for the subsequent Hong Kong show was also pessimistic. Adding to the gloom are the failures of small and medium operators both in Mumbai and cutting centres such as Surat. The worry is that these failures might start spreading into the ranks of the bigger operators. IDEX

T

7IDEX INDIA RETAIL MAGAZINE| NO 2: MARKET REPORT

-0.01 (-2 ) Fair demand for SI2-I1 goods. Overall demand will remain very low. Demand & Prices for VVS-VS will be very soft.

-0.02 (+2-6.5) Good demand for white SI2-I2 goods.Fair demand for VS-SI/Top shades.

Overall demand & prices will remain soft.Demand & Prices for VVS-VS will be very soft.

0.03-0.07 (+6.5-11) Good demand for SI2-I1 whites.Fair demand for VS-SI/Top shades.

Overall demand & prices will remain soft.Demand & Prices for VVS-VS will be very soft.

0.08-0.14 (+11-14) Good demand for SI & piqué goods. Overall demand will be low. Prices will be under pressure.

0.30 (1/3) Good demand for VS-SI goods.Fair demand for piqué goods.

Steady demand & prices will be seen.

0.50 (1/2) Good demand for VS-SI/K+ goods.Fair demand for piqué goods.

Demand for SI goods will remain stable. Prices will remain under pressure for VVS/VS goods.

0.75 (3/4) Good demand for +0.90 cts. VS-SI/F-J col.Fair demand for I1-I2/I+ goods.

Demand for SI goods will remain stable.Prices will remain under pressure for VVS/VS goods.

1.00 (4/4) Good demand for SI/K+ goods.Fair demand for I1-I2 goods.

Overall demand will remain stable. Demand & prices for VVS-VS goods will remain soft.

0.15-0.17 (+14-15.5) Good demand for SI & piqué goods. Overall demand will be low. Prices will be under pressure.

0.18-0.22 (1/5) Fair demand for SI goods. Overall demand & prices will remain low.

0.23-0.29 (1/4) Fair demand for SI goods. Overall demand & prices will remain low.

0.40 (3/8) Good demand for VS-SI goods. Steady demand & prices will be seen.

+3.00 Fair demand for SI-I1/G-K col. Overall demand & prices will remain soft.

MUMBAI DIAMOND TRADING IN AUGUST

Size in Carat (Sieve)

Comments Forward Call

by Vinod Kuriyan

MEMO

8 idEX india RETAIL MAGAZINE| NO 2: SPECIAL REPORT

SPECIAL REPORT

he third edition of the India International Jewellery Week (IIJW) grabbed the country’s attention as some

of India’s best designers and jewellery manufacturers showcased a stunning range of fine jewellery in a five-day high voltage extravaganza that featured some of Bollywood’s biggest names.

It won India’s heart on August 19, its first day, as the opening event hosted by the Gitanjali Group, the integrated diamond manufacturer, jewellery manufacturer and retailer that owns a whole raft of Indian and international brands, came out strongly in support of the Beti campaign. Beti is an initiative run by Anu Ranjan and Gr8 magazine that is aimed at eradicating the horrific practice of female foeticide and countering violence against women in general. The campaign has embarked on a drive to generate all the funding necessary for Sonali Mukherjee, the victim of a

T

IIJW GRAbS ATTEnTIOn WITh

SIzzLInG STyLE & SOCIAL SEnSITIvITy

terrible acid attack in Jharkhand, to have the reconstructive and plastic surgery that will enable her to lead a normal life.

Gitanjali has not only donated to the cause, but it dedicated its IIJW opening event to it. With a staggeringly long line-up of film and television personalities walking the ramp to showcase Gitanjali’s Envi and Nizaam jewellery lines, the event grabbed countrywide media attention. Adding to the draw was the fact that Hema Malini was the chief guest.

Following the high-intensity opening show, the IIJW then continued to deliver show after show of extremely high quality events, many featuring well-known names from films, television and fashion. The event went on over five days, climaxing as the official after-show event on the first day of the India International Jewellery Show (IIJS).

Anu Ranjan’s daughter Anushka, who has been made the face of the Beti campaign

Walking the ramp for Beti

Gitanjali Chairman Mehul Choksi (centre right) with fashion designer Vikram Phadnis and celebrities

9idEX india RETAIL MAGAZINE| NO 2: SPECIAL REPORT

consumer and like all fashion week concepts, created a buzz about the products that were worn and paraded by them.

The adoption by Gitanjali of a social cause has served to enhance the emotional draw of the event. Gitanjali Chairman Mehul Choksi observed, “As a socially concerned corporate citizen, Gitanjali has taken up different initiatives for the empowerment and uplift of socially underprivileged

The IIJW came about as the Gem & Jewellery Export Promotion Council (GJEPC) realized first of all that despite huge advances in the way it designed and developed jewellery from scratch, the world still didn’t accept India as anything more than a production outsourcing centre for jewellery. The “Made in India” label carried no value in global markets. Something had to be done to change that. India had to be recognized as a one-stop destination that not only cut and polished diamonds and gemstones and then set them into well-manufactured jewellery, it also was capable of driving global trends with innovative design and product development.

The GJEPC also realized that despite the resounding success of the IIJS, all that was happening was that the middle section of the gems and jewellery pipeline was being stimulated. There nothing being done to excite the end consumer about jewellery and create a strong build-up of demand that would ensure a healthy flow through the pipeline.

The IIJW, a fashion week type of concept, featuring a series of ramp walks displaying product, was seen as the answer to both problems. By ensuring foreign buyer and media presence, the GJEPC was able to begin getting the message out to the international industry that India is a formidable design talent and is capable of driving global market trends. The IIJW adds value to the “Made in India” label.

Through the involvement of film, television and fashion celebrities, the show caught the imagination of the Indian

Simran Kaur Mundi walks the ramp for JJS

GIA Show: Kirtee Shah and models

IGI Show: Preeti Desai and Neha Lulla


sections of society. We are now extending our support and involvement to a new sector by espousing the cause of women who have been discriminated against. Through Beti, Gitanjali will identify causes in need of a voice and assistance, and will conduct events throughout the year across cities to raise funds for them.”

The event has received tremendous institutional support from its very first edition. The Gemological Institute of America (GIA) and the International Gemmological Institute (IGI) have both sponsored a whole raft of young designers who have come out of their design schools. They did so this year too and showcased some astonishing talent. Adding some more institutional weight was the Jaipur Jewllery Show (JJS) that took part as an umbrella group that presented a group of jewellery design and manufacturing talent from Jaipur. Further, it being the 60th anniversary of Indo-Japanese trade relations, Infiniti Creations showcased some remarkable Japanese jewellery design and fabrication talent.

Having run at high energy through the week, event climaxed in a grand finale on August 23. The grand finale featured a “Best of the Best” fashion parade that showcased the best piece from every designer and jewellery manufacturer that participated in the IIJW.

The wrap-up show delivered a high-voltage performance featuring Bollywood stars and playback singers that was aimed at the Indian consumer. The heavy press and television coverage of the event ensured that the GJEPC got a great deal of mileage in its attempt to step outside its customary business-to-business promotions and directly target the consumer.

Sushmita Sen for Birdichand Ghanshandas

Walking the ramp for KGK Entice Pvt. Ltd.

Walking the ramp for Agni Jewellers

Walking the ramp for Dwarkadas Chandumal

Anand Shah, Sonali Bendre & Kanti Shah

Walking the ramp for Anmol Jewellers

Sahil Shroff for Ganjam Nagappa & Sons

Bipasha Basu for Nakshatra by Gitanjali

Jewels Emporium - Smriti Bohra, Dipali Goenka and Anup Bohra


Dia Mirza for Golecha’s Jewels

Showcasing Tanvi Garg’s creations

For Kashi Jewellers - Shreyansh Kapoor, Esha Gupta and Ridhi Gala

Walking the ramp for YS18

Madhuri Dixit struts it for P.C. Jeweller

Walking the ramp for Capuccino Collection

Ayushman Khurana for Jewels By Preeti

Walking the ramp for Aavriti Jain and Siddharth Daspan

Nisha Merchant and model for Saboo Fine Jewels


IIJW Brand Ambassador Sonam Kapoor

For Kays Jewels - Vijaya Kapoor, Juhi Chawla and Soumya Khurana

Abhay Deol for Amrapali

Walking the ramp for Raksha Enterprises

Walking the ramp for Zeenat Desai

Nidhi & Karan for Jewel Trendz (Sanskriti Jewellers)

Laksh Pahuja’s “Prime Czar”

Nirmal Kripalani creation for D. Navinchandra

Walking the ramp for Laxmi Jewellers


Walking the ramp for Gehna Jewellers

Walking the ramp for Infinity Creations, Japan

Infinity Creations Japan - Atul Parekh, Kiyoshi Asako, Yoshie Ishikawa and Carol Gracias


Ever since De Beers stopped its umbrella diamond promotion campaigns worldwide – its efforts in India created an appetite for diamonds where previously there was almost no penetration – the GJEPC has been concerned that jewellery as a product category is steadily having its market share eaten into by a whole slew of other heavily promoted products, particularly consumer electronics. The IIJW helped rekindle that lost spark within the country while also engendering the idea internationally that the “Made in India” jewellery label is something that delivers lasting value.

In all, the IIJW featured 50 designers and 33 shows. There were 20 new names among the participants and the event turned out to be a great platform for the gem and jewellery industry’s emerging talent.

Among the Bollywood stars walking the ramp at the grand finale was Sonam Kapoor, who is the GJEPC’s brand ambassador for jewellery and had also opened the event alongside Hema Malini. As it wrapped up, it became clear that the IIJW is now an annual event that is way up on the Indian fashion calendar with the likes of the Lakme Fashion Week. A measure of the event’s success, the GJEPC said, was that an extremely high percentage of the participants had already said they wanted to sign up for next year – as did many big-ticket jewellery brands that had hitherto stayed away.

The IIJW appears to have come of age. IDEX

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IDEX INDIA RETAIL MAGAZINE| NO 2: RETAIL ET CETERA 17

RETAIL ET CETERA

SEPTEMBER STUNNERS

PURITY AND QUALITY JEWELRY BY TOWE NORLÉN

Towe Norlén says it creates unique diamond jewels with Scandinavian purity and Swiss quality. The Corail collection unites the beauty and fragility of natural corals in 18 karat white gold and diamonds while the Manta Ray line is inspired by the smooth shape and sharp contours of these underwater creatures.

18 IDEX INDIA RETAIL MAGAZINE| NO 2: RETAIL ET CETERA

The Tring collection from Brosway Italia features three rings in one that can be worn in a variety of ways to create a unique and beautiful piece. The latest color additions to the line include golden shadow, fuchsia and silver night. The rings are made of stainless steel and colored Swarovski Elements.

JEWELRY BY BROSWAY ITALIA

TRING, TRING

Shamballa Jewels is inspired by the mythical Shamballa kingdom. Translated from Sanskrit, Shamballa is “a place of peace and tranquillity,” informed by the traditions of Buddhism and yoga. Carefully knotted threads, using the ancient technique of macramé, embed beautiful diamonds and coloured gemstones in endless color and stone combination bracelets, which clients can customize and mix and match according to their fancy.

JEWELRY BY SHAMBALLA JEWELS

MYTHICAL KINGDOM

Roberto Giannoti specializes in wit and whimsy. This fabulous feline is from the Mysteries of the Night collection. This line of fashion jewelry (which features silver and zircons) is inspired by the suggestions of things that go bump – or yowl – in the night. Other night mysteries include a series of all-seeing, all-knowing owls.

MEOW!

JEWELRY BY ROBERTO GIANNOTI

19IDEX INDIA RETAIL MAGAZINE| NO 2: RETAIL ET CETERA

The Barrel collection from Giovanni Raspini was born from memory of the hoops of barrels, a characteristic of the Tuscan countryside and its vineyards. The name, says Raspini, who specializes in silver, evokes the fragrances and flavors of winemaking rendered in jewelry form.

JEWELRY BY GIOVANNI RASPINI

ROLLING ON

This ring from the Soirée collection from Victor Mayer is made of brilliant fire enamel with a diamond-set ring shank. The 18 karat white gold ring is limited to just 500 pieces worldwide.

OH WHAT A NIGHTJEWELRY BY VICTOR MAYER

20 IDEX INDIA RETAIL MAGAZINE| NO 2: RETAIL ET CETERA

JEWELRY BY H.STERN

ANCIENT TIMES

The Serpent line is part of H.Stern’s new Ancient America collection. To simulate the pattern of snakeskin, various tones of cognac and black pavé diamonds are set in Noble Gold. Further depicting the movements of a serpent, rings wind and curl up around the finger, and the bracelet intricately wraps the wrist; the earrings are long and winding, while the necklace hugs the curves of the neck and sinuously extends down the back.

With the Melodia collection, Utopia combines the harmony of form, light and color of South Sea pearls. Ellipses of black rhodium plated gold and diamonds envelop the pearls and intertwine in a harmonious and sinuous continuum. As in a musical melody the succession of notes creates the tone, so in this collection the pearls are the notes that dictate the evolution of the piece.

PERFECT WORLDJEWELRY BY UTOPIA

Luca Crati’s Golden Clouds Collection consists of pendants, rings and earrings in matte white gold with white diamonds, matte rose gold with brown diamonds and matte white gold and blue rhodium with white diamonds, all in an iconic round shape.

UP IN THE CLOUDSJEWELRY BY LUCA CRATI

warovski Gems celebrated the tenth anniversary of its annual Gem Visions jewellery design and trend

forecasting publication with a special edition. The Gem Visions 2013 publications is entitled Celebrate to mark ten years of continuous publication. As it has in previous years, the publication offers Swarovski’s insight into the innovation and inspiration that is driving jewellery design trends for the coming year. The company says the special edition also looks at the evolution of the jewellery world.

Swarovski says, “Celebrate delves into the changing attitudes, dreams and desires of jewellery buyers, looking at the enduring appeal of gemstones and explores their profound meanings and messages in the context of today’s fast-changing markets.” The company adds, “Most of all, Celebrate ties the Gem Visions anniversary to the spirit of celebration that is always an integral part of the jewelry-

S

buying experience, highlighting the different underlying impulses that drive the desire for gems and jewels.

The company has encapsulated the celebratory trends in design by putting together creations under specific categories: - Celebrate Yourself treats the gem and jewel rediscovered as the most powerful expression of individuality.- Celebrate Love focuses on the emotions that are the soul of a jewel – celebrating love, occasions, achievements and milestones.

SwarovSki’S Jewellery Trend ForecaST For The coming year

Dress: Ralph & Russo. Trimmings: Sabine Roemer, Swarovski Gembraced

Mohamed Nassar, Egypt Gold

22 IDEX INDIA RETAIL MAGAZINE| NO 2: SPOTLIGHT

SpoTlighT

- Celebrate Life looks at the the gemstone as a life-affirming miracle of nature.

- Celebrate Time sees the gem as a work of art, gem-cutting as a true art form, inspiring today’s connoisseurship and appreciation of exquisite craftsmanship.

Melanie Newton, J.D. Lorenz, Industrial Strength

Pallavi D. Foley, Gold Plus from Tata Titan Industries Ltd.

Mathieu Tourmaire, Tourmaire

Delphine Bagot, Bermudes

23IDEX INDIA RETAIL MAGAZINE| NO 2: SPOTLIGHT

In terms of specific trends, the publication sees:- Origin. In meditative mood, this gentle, quiet, low-color look encapsulates the luxury of comfort and serenity through a style of modern minimalism, expressing the quest for inner balance, harmony and life in the slow lane.

- Celebrate Light highlights the otherworldly light within each gemstone, the light of life, elevating and illuminating, the light that triggers emotions.

A whole range of designers from around the world has worked on translating Swarovski’s vision into actual jewellery that illustrates what is being described. The insights into global cultural megatrends that Swarovski sees as shaping the world and global markets, include such intangibles as the hunger for luxury in emerging markets, which is encapsulated in the True Luxury category; the concept of fractional ownership, sharing and leasing lifestyles in a price-conscious world, bracketed in the Owner Less banner; the influence of augmented reality in Digital Marketing; the client’s involvement in the design process through new technology in DIY Robotic Lab and the new ideals of feminity in Womanity.

ThE GEmsToNE ITsElf As ThE focusGem Visions 2013 sees the focus shifting subtly away from complex design to the rare, important gemstone itself; the gem as the ultimate one-of-a-kind possession, made even more appealing by its investment potential. In terms of design overall, the publication sees “a new sense of daring and conviction that inspirations – whether from Glamazon femininity or super-technology, from myth and fable, or from the jewel’s intimate relationship with the body – that are interpreted in a style of contemporary fusion, perfectly integrating concept, form, material and craft.

- Goddess. A celebration of modern “womanity”, powerful, sensual and exotic, travelling the Silk Route, from Byzantium to India, paying homage to the goddesses of near-Asia, encompassing the growing Arabic and Ottoman oriental influences on contemporary design.

Pornchai Anukulwittaya,International Gem Gems

Charnchai Duangrawa,Well Field Corporation Ltd.

Prernaa Makhariaa, Tara Jewels Ltd.

24 IDEX INDIA RETAIL MAGAZINE| NO 2: SPOTLIGHT

- Take Time. Tinged with the last vestiges of nostalgia for a faded elegance, for the leisured lifestyle of a lost era, its savoir vivre and its savoir faire, this trend rediscovers family heritage, through a style characterized by a dark, poetic melancholy and a sense of the sacred.

- Toxic Attraction. The fast-growing wealth, power and influence of Asia nurtures this extreme style of modern Asian fusion glamour, passionate and audacious, inspired by traditional costume; balanced between attraction and repulsion.

- Outer Space. A contemporary space odyssey, pushing boundaries through new technology and augmented reality, exploring new materials and processes, generating a radical visionary space-age style, between science, design, astronomy and mathematics. ideX

Jessica Fong,Unicorn Jewelry Design Co. Ltd.

Christine J. Brandt

Stephen Webster

25IDEX INDIA RETAIL MAGAZINE| NO 2: SPOTLIGHT

For the first time ever, Indian diamond jewellery retailers have a retail benchmark for diamond prices, enabling them to assure their consumers about the retail prices being charged for diamonds. The endorsement of the All India Gems & Jewellery Trade Federation (GJF) makes the benchmark prices accepted countrywide, giving the consumer further confidence to buy diamonds.

The Diamond Retail Benchmark (DRB) is derived from up-to-date market data using an objective and fully transparent system. Standard retail mark-ups across the country have been factored in to ensure that the norms of every geographic market in the country are accounted for.

The diamond category is one of the few retail sectors that up to now has not had a credible retail price benchmark for consumers. For consumers, many of them first-time diamond buyers, the purchase of a diamond may sometimes prove to be a confusing experience. As a

luxury product that is bought to celebrate major life events and which will accompany them everywhere, confidence is essential. Consumers should be able to buy a diamond with the confidence of knowing they paid a fair price.

The DRB presents a retail price benchmark for a diamond based on each of the 4Cs – Cut, Carat, Colour and Clarity. The DRB should be used as background information only. Actual prices are determined by the sellers.

Your input will only make the system better. We urge you to contact us at anytime with your comments, suggestions and questions.

IDEX OnlineCall us at (022) 6633 2187 Fax us at (022) 6633 2186 Email us at [email protected]

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{dídmg ~hþV Oê$ar h¡ {Ogo H$ht ^r co Om`m Om gH$Vm h¡& O~ J«mhH$ hram IarX| Vmo Cgo `h {dídmg hmoZm Mm{hE {H$ CgZo ghr Xm_ na hram IarXm h¡&

S>rAma~r, H$Q>, H¡$aoQ>, H$ca Am¡a Šbo[aQ>r H$s Mma {deofeVmAm| Ho$ AmYma na hram H$m IwXam _yë` ~|M_mH©$ XoVm h¡& S>rAma~r H$m BñVo_mc Ho$dc nyd© OmZH$mar Ho$ ê$n _| {H$`m OmZm Mm{hE& dmñV{dH$ _yë`, {dH«o$VmAm| Ûmam V` {H$E OmVo h¢&

Amngo go àmá CÎma go hr ̀ h {gñQ>_ ~ohÎma hmo nmEJm& Amngo AZwamoY h¡ {H$ Amn {H$gr ̂ r g_` AnZo {dMma, gwPmd Am¡a àíZ {ZåZ{c{IV Zå~a/nVo na S>mc gH$Vo h¢:

AmB©So>Šg Am°ZcmBZna gånH©$ H$a|&\¡$Šg na gånH©$ H$a|&[email protected] na B©_oc H$a|

AmB©So>Šg Am°ZcmBZ hram [aQ>oc ~|M_mH©$-EH$ OmZH$mar

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27IDEX INDIA RETAIL MAGAZINE| NO 2: DRB

29

Disclaimer: This Diamond Retail Benchmark India (DRB™) is an informational and educational tool for diamond consumers. Organized around the “the 4C’s” - Carat, Cut, Color & Clarity - the DRB India is based on market data from the diamond trading centers Worldwide and market research assessment of customary retail mark-ups. Endorsed by the All India Gem & Jewelry Trade Federation (GJF), as well as the World Federation of Diamond Bourses (WFDB) The DRB™ should be used as background information only. Actual diamond sale prices may be di�er compared to this benchmark, depending on demand and supply at time of transaction; source of the diamond certi�cate; �uorescence; cut speci�cations; payment and other terms of business; foreign exchange rates; special stones and other business considerations. This is published jointly by The All

India Gems and Jewellery Trade Federation (GJF), a trade body headquartered in Mumbai, and IDEX, a diamond research house headquartered in Tel Aviv Israel, with a view of unbiased service to the consumer

IF VVS1 VVS2 VS1 VS2 SI1 SI2 SI3 I1 I2 I3

D 269286 223022 214499 175650 162701 145434 119535 97565 79856 66519 53237

E 197233 188600 184283 162701 145434 115219 110902 88711 71002 57665 48810

F 192916 179967 175650 149751 136801 110902 102048 79856 71002 57665 48810

G 179967 162701 158384 141118 132485 102048 97565 75429 71002 57665 48810

H 162701 158384 154068 136801 128168 97565 93138 71002 66519 53237 44383

I 158384 154068 141118 128168 119535 93138 88711 66519 62092 53237 44383

J 149751 145434 115219 93138 88711 75429 71002 62092 57665 48810 39900

K 110902 102048 88711 79856 71002 66519 62092 57665 53237 44383 35473

L 88711 84283 79856 75429 66519 62092 57665 53237 44383 35473 31046

M 84283 79856 75429 71002 62092 57665 53237 48810 39900 31046 22191

N 75429 71002 66519 62092 57665 53237 48810 44383 35473 31046 22191

Roun

d 0.

18-0

.22


D 291588 237908 225291 191588 183177 153348 149032 110183 97233 75429 62092

E 233702 216823 208412 183177 174765 140398 136082 97233 92916 71002 53237

F 225291 212618 204206 174765 170559 136082 127449 92916 88600 66519 53237

G 216823 191588 187382 170559 149032 131765 114499 88600 84283 66519 53237

H 191588 183177 174765 149032 144715 127449 101550 84283 79856 62092 48810

I 178971 170559 157665 140398 127449 114499 92916 75429 71002 62092 48810

J 174765 161981 118816 97233 92916 88600 84283 71002 66519 57665 44383

K 131765 114499 97233 84283 79856 75429 71002 66519 62092 53237 39900

L 105866 97233 84283 79856 75429 71002 66519 62092 53237 44383 35473

M 97233 92916 79856 75429 71002 66519 62092 57665 44383 35473 26619

N 88600 84283 75429 71002 66519 57665 53237 48810 44383 35473 26619

Roun

d 0.

23-0

.29

Roun

d 0.

45-0

.49

Roun

d 0.

50-0

.69


D 497731 394743 333094 317543 231489 211566 207526 203486 171112 134034 96126

E 375540 333094 290315 259103 215551 187438 166962 158771 134034 91920 78971

F 352518 321417 278639 231489 211566 179303 154676 142335 130216 79137 70504

G 305866 282512 255119 215551 199502 175208 150526 138240 117598 79137 70338

H 286386 259103 231489 207526 191422 171112 146431 134034 113392 75097 66187

I 282512 215551 207526 179303 166962 158771 138240 129828 104981 74820 66187

J 211566 195462 191422 162867 154676 142335 134034 125623 96403 70338 57388

K 191422 179303 162867 150526 146431 138240 129828 117211 83453 66021 53071

L 166962 158771 150526 142335 138240 134034 108744 104538 78971 57388 48755

M 158771 146431 134034 129828 125623 121417 104538 87604 70338 57388 44383

N 142335 138240 129828 121417 112950 100332 96126 83287 70338 57388 44383


D 663088 524184 453514 393359 351577 294079 247593 239845 196901 185058 128611

E 509353 445988 408467 362977 328666 267072 216491 212618 181129 157056 108024

F 453514 408467 374377 343996 305589 243719 208688 204759 177144 136801 95407

G 438517 366740 355340 320974 278694 228168 200830 196901 169120 120365 91201

H 397122 355340 328666 278694 251522 220365 192916 188987 157056 116270 82789

I 328666 301771 270946 243719 224294 188987 173160 165080 140897 99613 78583

J 255396 239845 224294 208688 188987 173160 161096 157056 128611 91201 70061

K 224294 208688 196901 173160 161096 157056 153016 149032 128611 86995 70061

L 208688 181129 177144 161096 157056 149032 144992 140897 124460 74377 57111

M 188987 177144 165080 157056 153016 140897 132706 128611 103818 70061 57111

N 185058 173160 161096 153016 149032 136801 128611 108024 78583 70061 57111


D 339292 275650 235196 206419 185778 156336 152131 139513 122579 96680 70780

E 287714 247482 218760 194079 177366 147925 139513 135307 122579 83730 66464

F 251522 226951 206419 177366 173160 143719 135307 131101 113946 75097 57665

G 222856 206419 189983 173160 152131 135307 126895 122579 113946 75097 57665

H 198174 185778 177366 152131 147925 131101 122579 118262 100996 75097 57665

I 181572 173160 164748 143719 131101 122579 113946 109629 96680 70780 53237

J 177366 164748 143719 126895 122579 113946 109629 100996 83730 62092 48810

K 143719 135307 131101 118262 113946 105313 96680 92363 79413 57665 44383

L 131101 122579 118262 113946 109629 100996 88046 75097 66464 53237 39900

M 113946 109629 105313 100996 96680 88046 75097 62092 53237 39900 31046

N 109629 105313 100996 96680 92363 66464 57665 53237 44383 35473 26619

Roun

d 0.

30-0

.39


D 366353 315772 284505 260819 208744 175982 171887 167792 142833 109186 79137

E 311898 292363 268733 236912 196569 171887 151245 142833 130216 83730 74820

F 292363 260819 236912 212784 192418 163697 147039 138628 130216 79137 70504

G 268733 240952 228888 208744 184228 159546 142833 134422 117598 79137 66187

H 240952 236912 208744 188323 171887 155451 134422 126010 113392 75097 66187

I 224848 192418 184228 163697 159546 151245 130216 121804 104981 74820 66187

J 192418 180133 167792 151245 138628 130216 121804 113392 96403 66187 53237

K 175982 159546 155451 142833 134422 126010 109186 96403 83453 61871 48810

L 163697 155451 147039 134422 126010 117598 100719 83453 70504 53237 44383

M 155451 138628 130216 126010 117598 104981 83453 66187 57554 44383 35473

N 130216 126010 117598 113392 109186 96403 79137 61871 57554 44383 35473

Roun

d 0.

40-0

.44


D 797510 639513 563697 523852 480243 391865 328224 297952 267515 190315 128611

E 650360 560044 520255 476646 432595 365800 316934 286552 240620 186386 123243

F 574543 520255 465634 443608 402988 358273 301716 282734 232928 186386 123243

G 513005 480243 447261 399281 365800 328224 294134 263641 225235 174709 119203

H 487548 447261 388157 365800 347039 313116 267515 252131 205866 162977 106973

I 399281 354510 335750 324516 309353 263641 232928 217543 186386 131267 90537

J 305534 290315 286552 248312 232928 221417 205866 201992 170836 115163 82180

K 244438 240620 225235 201992 190315 178639 166962 159048 135307 98727 70061

L 232928 213614 201992 182512 178639 170836 155119 151190 131267 94632 69563

M 225235 209740 194189 174709 170836 166962 139292 135307 123243 82180 69563

N 198063 194189 182512 170836 166962 159048 135307 119203 98727 73769 61151

Roun

d 0.

70-0

.79

Roun

d 0.

80-0

.89


D 919867 720919 638572 559380 519701 432706 366685 337023 284560 200553 128611

E 756613 634975 559380 530548 476259 403486 351854 314555 254178 188932 126453

F 638572 602601 516049 487106 443608 385113 322081 303320 242778 186386 123243

G 573824 523298 494355 440011 396182 348146 303320 269341 227449 177255 119203

H 516049 476259 432706 392474 366685 337023 284560 257941 219757 165634 106973

I 421804 396182 374101 344438 337023 292031 254178 246541 208246 134311 102324

J 333315 314555 310791 273160 257941 242778 235141 223575 177255 118428 94134

K 273160 257941 254178 219757 212064 192861 181184 177255 150028 102324 77698

L 265578 231267 227449 188932 185058 177255 161704 153957 131267 98229 69563

M 254178 219757 215938 185058 181184 173381 153957 150028 123243 90039 69563

N 223575 208246 196680 177255 173381 165634 146154 126453 106364 81793 69286

Prices are in Rupees Per Carat Powered by www.idexonline.com

THE DIAMOND RETAIL BENCHMARK - INDIADIAMOND RE TAIL BENCHMARK FOR POLISHED DIAMONDS

SEPTEMBER 1st 2012

SEPTEMBER 1st 2012

30

Prices are in Rupees Per Carat Powered by www.idexonline.comIF VVS1 VVS2 VS1 VS2 SI1 SI2 SI3 I1 I2 I3

D 1258993 1071998 861871 713116 613171 534200 454842 404206 331046 226010 141229

E 1016270 932208 769950 641837 555838 505423 425899 382346 316159 210791 133426

F 939236 777034 691754 584505 548644 476591 411455 360432 308744 195407 125567

G 798284 684615 584505 541450 498229 447648 396901 345766 293913 195407 125567

H 627504 606032 570172 505423 469341 418705 375097 338406 271389 172330 117709

I 577366 505423 462092 440398 404206 367792 331046 293913 226010 134311 102324

J 512618 418705 404206 375097 345766 323575 293913 263863 210791 125567 94134

K 316159 308744 301328 293913 286386 263863 241173 233592 187714 117709 85556

L 278860 271389 263863 256336 248755 226010 210791 203099 133426 101716 85556

M 263863 256336 248755 241173 226010 210791 172330 156779 133426 101716 85556

N 256336 210791 203099 195407 187714 172330 164527 148976 117709 93691 77310

Roun

d 0.

90-0

.99


D 1956724 1392142 1234477 1028002 861372 607692 522081 486276 385390 268622 155285

E 1371555 1200166 979635 868345 756226 579192 493414 471887 378141 253791 147593

F 1172662 986552 847427 812396 671555 572053 486276 464693 370891 238794 139790

G 958771 868345 819424 692750 614831 550692 464693 443110 356447 223796 132042

H 819424 742169 685722 621915 564970 507748 443110 407084 334643 208744 124239

I 671555 636082 579192 536414 507748 457499 399834 392584 327393 193525 124239

J 550692 529220 507748 457499 435916 385390 370891 341948 276038 155285 116491

K 471887 450304 435916 407084 392584 341948 305479 276038 223796 132042 116491

L 407084 392584 370891 349198 334643 298174 276038 261206 216325 132042 108633

M 349198 341948 312839 298174 268622 246320 238794 231323 208744 132042 100775

N 341948 334643 298174 290814 231323 216325 208744 185944 155285 124239 100775

Roun

d 1.

00-1

.24

Roun

d 2.

00-2

.99

Roun

d 3.

00-3

.99


D 3711677 2873215 2535861 2237853 1560321 1165689 882789 665302 555783 340952 173713

E 2774045 2330548 2118539 1793414 1353237 1091865 828611 638019 507692 305700 151356

F 2317322 2038960 1833260 1573658 1313060 1024571 794687 631157 438683 270227 139790

G 1746818 1606973 1413448 1239458 1152241 909851 740288 624350 424792 223796 132042

H 1366630 1293027 1226010 1091865 977421 869231 726674 610625 424792 208744 128722

I 1091865 1011123 997620 889541 801439 733481 644826 562645 424792 193525 124239

J 889541 821804 808246 740288 672108 610625 548921 466353 369009 177034 121140

K 753901 733481 706198 651633 603763 555783 452518 424792 270227 133426 121140

L 610625 583232 555783 507692 473215 403929 362037 333924 234532 132042 115108

M 535196 521472 507692 480133 403929 355008 305700 270227 220199 132042 115108

N 500775 486995 473215 459436 355008 333924 284449 234532 213060 130548 107305


D 7017820 5125401 4298561 3417764 2812175 1695905 1264804 750083 621859 369507 187936

E 4830216 4416713 3634754 3009685 2390149 1516989 1224903 743387 601550 355728 166519

F 4022579 3608467 2785778 2436359 2277919 1404261 1131655 723188 581184 328168 166519

G 2963641 2535307 2429718 2132540 1841561 1298063 971334 709685 519978 300443 159325

H 2211843 1980465 1887880 1715772 1457333 1111621 884339 682734 513171 279579 152186

I 1702490 1609795 1490481 1384394 1178307 877643 797178 628611 451799 265578 152186

J 1410902 1304704 1231544 1098284 978030 810570 709685 554012 431267 230437 144992

K 1084947 1024848 1011455 931212 803874 689485 587936 492750 369507 180797 137797

L 810570 763586 736635 689485 635362 479081 431267 417598 348866 180797 137797

M 669175 662424 635362 581184 513171 417598 390094 335086 279579 173658 137797

N 554012 526785 485944 459436 362590 355728 321251 293525 244549 173658 130548


D 2068345 1549198 1331821 1086054 921251 664638 566132 495241 409574 272496 155285

E 1508467 1345434 1079192 935030 824737 629552 544936 481018 395241 253791 147593

F 1215938 1099723 900553 866132 734532 615495 523630 466740 373658 238794 139790

G 1003763 907471 838517 734532 664638 594411 502380 459602 373658 223796 132042

H 838517 783177 692695 650636 587327 544936 481018 438185 373658 208744 124239

I 685667 636635 587327 559048 523630 481018 431046 402380 359270 193525 124239

J 566132 544936 523630 495241 473879 416713 388046 366464 301494 155285 116491

K 481018 452463 438185 416713 409574 366464 323188 286995 235916 132042 116491

L 416713 395241 373658 366464 337631 308688 279745 272496 221140 132042 115108

M 388046 373658 330437 301494 272496 265191 257941 235916 213724 132042 115108

N 380852 352075 323188 294245 235916 221140 213724 198783 168677 130548 107305

Roun

d 1.

25-1

.49


D 2409961 1882568 1641339 1392474 1108080 855728 663254 587050 468013 304372 173713

E 1721804 1587659 1358771 1209906 1033260 814610 628722 559159 453901 297178 151356

F 1520476 1304704 1203099 1080908 910515 794023 594023 552186 432706 268345 139790

G 1169175 1094466 985556 889983 835196 725291 580077 517211 397233 223796 132042

H 951467 903652 821472 800885 745932 670172 552186 489098 390149 208744 128722

I 800885 766574 739070 683951 614831 580077 489098 460930 368733 193525 124239

J 677034 649419 621749 587050 531212 482070 432706 404317 325844 166298 121140

K 566132 531212 524239 482070 432706 390149 354510 318705 261151 132042 121140

L 468013 446818 418539 397233 375872 333038 304372 275595 232208 132042 115108

M 411400 397233 368733 340177 297178 282789 261151 253901 217709 132042 115108

N 383011 375872 361594 333038 275595 253901 246707 232208 195849 130548 107305

Roun

d 1.

50-1

.99

Roun

d 4.

00-4

.99


D 9471389 7558052 5643608 4210017 3219203 2061262 1413890 809685 675872 378694 199557

E 8322081 5892197 4137908 3705091 3087770 1744549 1360985 769618 628943 355728 166519

F 6604649 4059270 3495019 3265191 2706475 1665246 1327836 762922 615551 328168 166519

G 5035141 3265191 2962922 2739347 2173326 1460266 1148921 756226 568456 310293 159325

H 3842833 2462977 2357665 2153569 1823796 1360985 983011 682734 548257 303431 157222

I 2930050 1764361 1724682 1533038 1420531 1109131 896458 628943 500941 289707 152186

J 2239181 1526397 1387438 1255008 1162203 916436 796348 554953 446763 269009 150138

K 1407305 1288102 1175429 1062756 949751 783011 635639 494189 371887 199557 150138

L 1168843 1056115 903099 829718 762922 602103 514499 426342 351411 199557 142999

M 936414 803044 689319 642335 602103 528002 446763 385501 317156 199557 142999

N 702712 635639 568456 487438 405977 371887 358218 337687 275927 192529 135861

Roun

d 5.

00-5

.99


SEPTEMBER 1st 2012




D 11376480 8411787 6224184 4603818 3399281 2230493 1585169 870725 704372 402490 211345

E 8659934 6707416 5388323 4492640 3320587 2223907 1472994 777643 637576 355728 169618

F 6604649 5238019 5211843 4165523 3209131 2217377 1446541 764361 617543 328168 169618

G 5035141 3353403 3346818 3307471 2946707 2033149 1433315 757665 610847 310293 159325

H 3842833 2913890 2762867 2664361 2309408 1558771 1347427 691035 550581 303431 157222

I 2930050 2473824 2375208 1987050 1914665 1400332 1129164 637576 510349 289707 155617

J 2239181 1980465 1940952 1571998 1525789 1175484 970172 563973 463254 273215 150138

K 1710459 1492750 1472994 1254898 1129164 864084 777643 503597 409242 218207 150138

L 1307803 1122524 983453 956890 824239 777643 630880 449751 361815 211345 142999

M 996680 850802 771002 731046 684339 610847 496901 409242 327781 211345 142999

N 764361 724350 657609 557277 456502 422800 395739 355008 293691 204427 135861

SEPTEMBER 1st 2012

31


D 162701 145434 132485 123852 110902 97565 79856 62092 53237 44383 35473

E 141118 132485 119535 102048 97565 71002 66519 53237 48810 39900 31046

F 128168 110902 102048 84283 79856 66519 62092 48810 48810 39900 31046

G 115219 102048 93138 79856 75429 62092 53237 44383 44383 35473 31046

H 106475 97565 88711 75429 66519 53237 48810 39900 39900 31046 26619

I 102048 88711 84283 71002 62092 48810 44383 35473 35473 31046 26619

J 97565 84283 66519 53237 48810 39900 35473 31046 31046 26619 22191

K 62092 53237 48810 44383 39900 35473 31046 26619 26619 26619 22191

L 48810 44383 39900 35473 31046 26619 22191 17764 17764 17764 17764

M 44383 39900 35473 31046 26619 22191 17764 13282 13282 13282 13282

N 39900 35473 31046 26619 22191 17764 13282 8854 8854 8854 8854

Fanc

y 0.

18-0

.22


D 183177 178971 166298 149032 131765 110183 101550 75429 71002 53237 44383

E 170559 166298 161981 140398 127449 105866 97233 66519 66519 48810 35473

F 153348 149032 144715 131765 123132 101550 92916 62092 62092 44383 35473

G 149032 136082 131765 118816 114499 92916 84283 57665 57665 44383 35473

H 136082 127449 123132 114499 105866 88600 75429 53237 53237 44383 31046

I 123132 118816 114499 101550 79856 75429 71002 48810 48810 39900 31046

J 114499 97233 88600 71002 66519 62092 57665 44383 44383 35473 31046

K 88600 79856 71002 66519 57665 53237 48810 39900 39900 35473 26619

L 71002 66519 62092 53237 48810 44383 39900 35473 35473 31046 22191

M 62092 57665 53237 48810 44383 39900 35473 31046 31046 22191 17764

N 57665 53237 48810 44383 39900 35473 31046 26619 26619 22191 13282

Fanc

y 0.

23-0

.29


D 344770 259103 227559 215551 195462 179303 150526 142335 121417 100332 70338

E 259103 227559 199502 191422 179303 166962 146431 134034 108744 83287 66021

F 235418 211566 187438 175208 166962 134034 129828 112950 104538 70504 57388

G 215551 187438 171112 166962 150526 125623 121417 96126 91920 61871 53071

H 191422 175208 154676 146431 138240 121417 104538 87604 83287 61704 48755

I 179303 162867 129828 125623 117211 112950 100332 83287 70504 57554 48755

J 138240 129828 112950 108744 104538 100332 91920 78971 66021 48810 39900

K 121417 112950 104538 96126 91920 87604 83287 70338 66021 44383 35473

L 108744 100332 96126 83287 78971 74654 70338 66021 48755 39900 31046

M 100332 96126 83287 78971 74654 70338 66021 57388 48755 39900 31046

N 96126 87604 78971 74654 70338 61704 57388 53071 44383 39900 31046

Fanc

y 0.

45-0

.49


D 438517 336359 278694 267072 247593 216491 177144 173160 153016 128611 78583

E 332485 278694 255396 224294 220365 188987 173160 157056 149032 95407 66021

F 294079 247593 235971 216491 212618 177144 165080 149032 144992 95407 57388

G 247593 232042 216491 196901 185058 169120 161096 144992 140897 95407 57111

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Prices are in Rupees Per Carat Powered by www.idexonline.com




SEPTEMBER 1st 2012

SEPTEMBER 1st 2012

32 SEPTEMBER 1st 2012

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SEPTEMBER 1st 2012

Untitled-5 1 12-07-16 1:38 PM

34

Both the diamond processing industry as well as jewellery retailers have in recent times, come around to the idea that unless something is done, a disastrous situation could well result. But what does one do about the weak and volatile rupee, which impacts the price of gold and diamonds?

IDEX INDIA RETAIL MAGAZINE| NO 2: COVER STORY

Delivering Diamond Value With A Weak Rupee by Vinod Kuriyan

35

The Indian rupee’s 24 percent plunge in value against the US dollar over the past year and its stubborn refusal to climb back up, has had an extremely negative impact on not only the jewellery retail industry, but the whole luxury goods sector. Its most significant impact has been on consumer sentiment. The weak rupee, combined with Europe’s debt crisis, the US economy’s struggle to get back on its feet and the realization that India isn’t entirely insulated from either of them, has depressed consumer sentiment significantly. The ‘feel good factor’ has gone to a great extent.

IDEX INDIA RETAIL MAGAZINE| NO 2: COVER STORY

IDEX INDIA RETAIL MAGAZINE| NO 2: COVER STORY36

While the Indian gem and jewellery industry is struggling to cope with consumers who seem disinclined to buy, the weak rupee has made gold so expensive that it is no longer the blindly sought-after commodity it has been in this country. Worse, the weak rupee has landed a second punch by also making diamonds significantly more expensive. As with gold, diamond prices have risen so sharply and in such a short time that consumers are no longer confident about the diamond’s value.

This is what the gem and jewellery industry is faced with in the run up to the Diwali sales season – the single biggest sales period of the entire year. “We have to do something in terms of communicating directly with the consumer,” says Sanjay Kothari, Vice Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), “all this while, we’ve piggybacked for free on either somebody else’s efforts or an age-old social phenomenon – that has changed completely.”

Kothari is referring to the fact that the Indian diamond processing industry, the largest in the world by far, has had, until a few years ago, no worries about consumer demand worldwide as mining giant De Beers ran its global promotional campaigns, spending over $200 million (Rs.1,105 crore at today’s exchange rate) annually. The global campaign successfully implanted the idea among consumers everywhere that the diamond was the symbol of the relationship between men and women. Even in today’s depressed global markets, the diamond engagement ring has kept the diamond processing industry from total collapse. Kothari’s other reference is to the fact that in India, the almost religious fervour with which gold has been regarded, has meant that until now, jewellery has not even remotely come close to requiring a hard sell. All that has changed, as he observes.

IDEX INDIA RETAIL MAGAZINE| NO 2: COVER STORY 37

EXTRANEOUS FACTORS GOVERN RUPEE VALUE

Both the diamond processing industry as well as jewellery retailers have in recent times, come around to the idea that unless something is done, a disastrous situation could well result. But what does one do about the weak and volatile rupee, which impacts the price of gold and diamonds?

Without some sort of major effort, Indian diamond consumption, currently pegged at Rs.24,800 crore ($4.5 billion) annually, and estimated to be growing at 40 percent a year to hit Rs.33,100 crore ($6 billion) by 2015, could well flounder.

The value of the rupee is governed by several factors, chief among them are the interest rate regime, fiscal deficit, export and foreign investment in India. Added to this are global issues such as the current economic crisis in the Eurozone. This may make investors more risk-averse. As a result, they may reduce their asset exposure from emerging economies like India, thereby selling more rupees. Also to be factored in is the level of demand for the US dollar in India. Rising oil prices mean more dollars are required by Indian oil companies to import crude oil. Economists say the rupee is likely to remain weak for the foreseeable future.

All these factors put together make it difficult for even the Reserve Bank of India (RBI) to steady the rupee against other currencies. Industry leaders have stated clearly that there is not much the gem and jewellery industry can do about the value of the rupee. All it can do is focus on generating demand for its product among Indian consumers. Imbuing the diamond with some emotional content specifically for Indians is one way that is now being discussed.

“We have to do something in terms of communicating directly with the consumer, all this while, we’ve piggybacked for free on either somebody else’s efforts or an age-old social phenomenon – that has changed completely.” /Sanjay Kothari, Vice Chairman of the Gem & Jewellery

Export Promotion Council (GJEPC)/

The GJEPC had tried previously, using Bollywood star Sonam Kapoor as it brand ambassador, to push the diamond as the symbol that truly reflected the many facets of the Indian women – a daughter, wife, mother, professional and achiever. The campaign was, however nowhere near the scale of the De Beers ones in terms of financial muscle and reach. Its returns have thus, been limited. But more needs to be done, warns Kothari. Without some sort of major effort, Indian diamond consumption, currently pegged at Rs.24,800 crore ($4.5 billion) annually, and estimated to be growing at 40 percent a year to hit Rs.33,100 crore ($6 billion) by 2015, could well flounder.

38 IDEX INDIA RETAIL MAGAZINE| NO 2: COVER STORY

The continuing GJEPC effort this year was seen in media tie-ups in this year’s the India International Jewellery Week (IIJW). With the Star Plus TV channel and the Bombay Times as media partners, the direct outreach to the consumer this year has been substantive. The message has been that unique design and a product that has enduring value are factors that make the buying of jewellery a great decision.

INVESTMENT VALUE MATTERS IN LONG TERM

In the long term, however, instilling value in a product is a tricky business. Research has shown that in India, even with international luxury brands, although value is defined distinctively by a range of varying parameters, the ‘price’ proposition of the value platform continues to be of essence. Thus even worldwide, luxury assets are perceived to be investments. So for the gem and jewellery industry, the process of developing an emotional value proposition will still have to take into account the weak rupee as the consumer also assesses the product’s return on investment.

Jewellery manufacturers have pointed out that even if the gold content of a piece of jewellery is kept down to the minimum while a ‘large look’ is maintained through the use of hollow castings, if a substantial diamond is used as the centerpiece, the consumer could still wind up being asked to pay tens of thousands of rupees more than it would have cost a neighbour a year ago.

One view being looked at is the ‘bridge to luxury’ concept. This is something that


luxury car makers have exploited in the country by introducing significantly lower-priced entry-level models. This pricing ‘bridge’ to the top end of the luxury car segment allows the consumer the ‘luxury experience’ and fulfill the ‘flaunt quotient’ at a price that delivers a feeling of value for investment. The diamond industry’s parallel idea could be to promote the idea that even if it is of lower quality, just owning a diamond is a special experience.

De Beers has always maintained that ‘buying a diamond always whets the appetite for more diamonds’ and encouraged price segmentation to allow a low entry price-point. Some Indian retailers including market leader Tanishq have done that, taking a very long-term view and going specifically after the youth market (see IDEX Magazine – India Retail June issue).

Analysts have, however, pointed out that in general, the practice of offering substantial discounts on existing jewellery during festivals and for the bridal market, significantly dilutes any idea of building a price bridge to a top-end product.

SEEING VALUE IN DESIGN

However consultancy and research firm Technopak has, in an analysis of the emerging trends in luxury consumption in India, noted that “the perception of ‘design’ having intrinsic value rather than the metric of carats and quantity of gold shall be a trend in the coming years. Consumers are more inclined towards classy, unique pieces, crafted by internationally renowned designers, commanding a high

40 IDEX INDIA RETAIL MAGAZINE| NO 2: COVER STORY

ticket price due to the intrinsic value attached to their design. Taking a cue from this, over the last few years, domestic and international brands have lured the customers with creativity and innovation in design.” The Technopak report goes on to list some of the watch and jewellery brands that have created the concept of delivering value by design: “A few examples amongst others are Longines, Breitling, Omega, Rolex, Morellato, Guess, Cartier, Tiffany & Co., The Gem Palace, Harry Winston, Caratti, Ganjam, Mirari Jewels and Opulence By Jewelex.”

While the industry struggles with product promotion issues and wonder how to generate sufficient sales over the all-important Diwali season, industry watchers say that help may be on the way after Diwali. toward the end of the year, in the form of a diamond price correction. They note that ill-considered overbidding for rough diamonds by Indian diamond manufacturers was one of the primary causes of the sharp escalation in diamond prices over the past year. Non-existent margins and unsold stocks have, however, brought about a return to realism and along with sharp cutbacks in production which will lessen the pressure to go on buying rough, balance will begin to be restored in the diamond processing value chain by the end of the year. They caution that the price correction may not be in time to provide any sort of fillip to the year-end-beginning-of-the-next-year marriage season. But the diamond price situation is expected to improve considerably by then.

Diamonds are in short supply and going into the future, prices will continue to escalate. But this is expected to be the steady escalation that gives consumers confidence in the enduring value of the product they are buying.IDEX


he 29th edition of the India International Jewellery Show (IIJS) that ran between August 23 and 27,

kicked off in a considerably gloomy and pessimistic market. It was thus no great news to learn that there were no market-moving events at the show. What was surprising, however, was the fact that in the space of just five days, the show managed to lift market sentiment. Things didn’t seem so black going forward through to the end of the year by the time the show wrapped up.

Those exhibitors who came with not only well-designed, but clearly differentiated jewellery, said the show ranged from fair to good. Branded jewellery in general had a good outing at the show – especially those who brought new lines and new product offerings.Those with the usual offerings went home disappointed.

Tby VINOD KURIYAN

IIJS LIfTS InduSTry SenTImenTNew liNes & differeNtiated product are rewarded

this year’s iiJs, spread over 46,000 square meters, featured 852 exhibitors who had taken 1,700 booths and included five country pavilions from thailand, dubai, turkey, israel and Belgium. official trade delegations from over 20 countries – including for the first time one from singapore – visited the show.

42 IDEX INDIA RETAIL MAGAZINE| NO 2: SHOW REPORT

Show rePorT

haRd woRk pays off.m a n u fac t u r e r i m p o rt - e x p o rt p o l i s h e d d i a m o n d s i n a l l s i z e s a n d q u a l i t i e s

m a n u f a c t u r e r o f l a r g e s i z e s , r o u n d s a n d f a n c i e s , u p t o 25.00 c t s

schupstraat 1/7 2018 antwerpen belgium tel + 32 3 231 21 47 [email protected] www.pinchasi.com

please visit us at the hong kong jewellery show 19-23 september 2012, asia World expo, hal l 5 a15

With a price correction happening as the show took place, it was again no great surprise that the loose diamond exhibitors were disappointed overall. However, even here, those with fancy cut inventories did surprisingly well – as did those with lower-clarity round-cuts that offered value for money. Princess cuts, pears, cushions, emerald- and Asscher cuts all did well. This lifted the overall despondency in the loose diamond section. The lower-clarity (VS-SI) round-cuts were sought after in a broad range of colours.Exhibitors reported satisfactory business in both loose diamonds as well as select ranges of jewellery with buyers from the Middle East and other Asian countries.

As has happened in previous IIJS shows the price of gold shot up steeply shortly after the exhibition kicked off. “It happens every time,” one exhibitor who runs logistics services for diamonds and jewellery observed, “when some 30,000 of India’s jewellery retailers come together under one roof with all the leading diamond, gemstone and jewellery manufacturers, the price of gold is bound to shoot up!” Instead of putting buyers off, however, what the price rise did was to trigger a buying rush as retailers sought to close deals before the upcoming festival and marriage seasons pushed up the price of the yellow metal further. It remained uncertain at the time of going to press, whether these orders would stand or would be unceremoniously be cancelled – as they were after IIJS 2011.

This year’s IIJS, spread over 46,000 square meters, featured 852 exhibitors who had taken 1,700 booths and included five country pavilions from Thailand, Dubai, Turkey, Israel and Belgium. Official trade delegations from over 20 countries – including for the first time one from Singapore – visited the show. The Pakistani delegation alone was over 100 people. Sources observed that over 200 Pakistani gemstone and jewellery dealers were at the show – most were keen to transact business immediately. In all, this

year’s show witnessed visitors from 720 cities across the nation and 69 countries.

Inaugurating the event, Indian Minister of Commerce & Industry Anand Sharma observed, “Manufacturing and exports are two key drivers of the economy. Both have registered low or negative growth in recent months. It is imperative that we reverse this trend.” The minister went on to say that the government wanted to work with manufacturers and exporters to implement short- and medium term measures to counter the negative balance of trade.

The overseas exhibitors were looking at generating business with the Indian retail industry as the Indian consuming market is one of the few that still shows growth potential amidst today’s global economic gloom. Indian exhibitors were in general looking at expanding their professional network amidst an appreciable domestic market slowdown. They were also looking at potential business with overseas markets, especially other Asian markets and the Middle East.

The Israel Diamond Institute (IDI) organized an Israeli pavilion for the fifth year running and brought eight Israeli

IDEX INDIA RETAIL MAGAZINE| NO 2: SHOW REPORT44

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diamond firms to the show. The IDI itself gave up its space in the pavilion to enable additional diamond firm participation. IDI Chairman Moti Ganz said that Israel and India have a great deal in common – in terms of business outlook, culture and values. “Both countries have an impressive diamond industry with a long history and tradition. They are also two of the world’s leading diamond centres. Israel and India can complement each other in both manufacturing and trading. We are very interested in expanding our business ties with India,” he said.

SEEKING GOVERNMENT REDRESSAL OF ISSUESRajiv Jain, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), the show’s organiser, told the Minister that there were several issues that the Indian industry wanted government action on. The current Free Trade Agreement (FTA) with Thailand, he pointed out, made provision for gems and jewellery to be traded without tariff barriers between the two countries. This had been done without the industry being consulted and had resulted in a one-way flow of Thai gems and jewellery into India.

Jain also repeated the GJEPC’s demand of many years that the government develop an international trade show centre in Mumbai. The current show facilities are woefully inadequate and a waitlist of hundreds of potential exhibitors could not be accommodated simply because there is no room for expansion.

As ever, the IIJS 2012 was also about disseminating information and spreading the word on new trends and developments in the industry here in India as well as around the world. At a seminar titled Jewellery Trends: What’s In, What’s Out, Shishi Nevatia of Sun Jewels moderated a panel consisting of Sohil Kothari from Fine Jewellery, Colin Shah from Kama Schachter, Bobby Kothari from Jewelex India Pvt. Ltd. and Gunjan Suri from Shrenuj & Co. They discussed current global jewellery trends and the likely direction they would evolve in.

Colin Shah said that in China, the “diamonds in motion” concept with diamonds in hinged or movable settings were a front-running trend. He pointed out that the Chinese market hada preference for solitaires and a clear preference for platinum over gold. According to him, some 50 tons of platinum jewellery were sold in China this year. In the US, he observed, the rising cost of gold and diamonds had driven brands to using more coloured gemstones. He cited as examples,Tiffany’s Tanzanite Collection and Chopard’s Imperial Collection with coloured gemstones. Tiffany, he said, had come up with a patented pink metal called Rubido that seemed to be making great headway with consumers. Chandelier earrings were enjoying a resurgence according to him, while Van Cleef & Arpels now had lines featuring eastern cultural motifs like swans and dragons.

Gunjan Suri thought that negative spaces as a design feature were making a comeback as brands tried to bring down material costs. There was also a lot of experimentation in the market with colour, different metals, gemstones and a variety of techniques, she added. Modular and functional jewellery was better suited to today’s multi-faceted woman.Bobby Kothari made the observation that while other product categories delivered more to the consumer than was actually paid for – mobile phones offer so much more than just a communications tool for instance – while jewellery was unable to deliver a satisfactory bang for their buck.

INDIA’S GROWING DIAMOND CONSUMPTIONIn another seminar, Vikram Merchant, manager, Rio Tinto Diamonds – India showed how diamond consumption

Rio Tinto Diamonds global Managing Director Bruce Cox said it was extremely satisfying that the first jewellery was produced just seven years after work started at Bunder. The mine is slated to come up to full production by 2016. Rio has so far invested Rs.384 crore ($74 million) in developing the mine and expects to have spent Rs. 2,200 crore ($500 million) by the time it reaches full production.

Shishir Nevatia (left) moderates the discussion with Gunjan Suri, Bobby Kothari, Colin Shah and Sohil Kothari


was on the rise in India. He took the audience through the research and reasoning behind Rio Tinto’s Nazraana campaign to position its off-colour and brown diamonds in the wedding gift category. He said that India and China were expected to play a great role in the growth and demand for diamond jewellery. “We are a young nation with 60 percent of the total population under the age of 40. People’s earnings are increasing as is rural consumerism,” he said, adding, that jewellery sales are expected to grow from Rs.5,900 crore to Rs.38,400 crore by 2020. The Indian consumer is looking beyond the bridal category. In fact, 32 percent of respondents to Rio’s market research said that while buying diamond jewellery, price was the deciding factor, whereas 22 percent said that design influenced them to make the final buying decision. Merchant said that Indian consumers understand that diamonds belong in all forms of jewellery unlike China where rings seem to be the norm for diamond jewellery.

On the sidelines of the IIJS, Rio Tinto Diamonds – India used the networking platform that the show offered to unveil the first jewellery made with the first batch of diamonds extracted from its Bunder mine in Madhya Pradesh. The jewellery was designed by Reena Ahluwalia, who is currently based in Canada but was born and brought up in Madhya Pradesh. It features the white as well as the off-colour ‘champagne’ and dark brown ‘cognac’ diamonds that the mine produces.

Rio Tinto Diamonds – India Managing Director Nik Senapati observed that it was a proud moment for the firm as he said Bunder is the first Indian mine in a century to have also had jewellery set with its diamonds fabricated in India. Bunder is slated to become one of the world’s top ten diamond producing mines, he added.

Rio Tinto Diamonds global Managing Director Bruce Cox said it was extremely satisfying that the first jewellery was produced just seven years after work started at Bunder. The

mine is slated to come up to full production by 2016. Rio has so far invested Rs.384 crore ($74 million) in developing the mine and expects to have spent Rs.2,200 crore ($500 million) by the time it reaches full production. Currently, the mine employs 400 people, but the personnel strength is set to increase to around 1,000 by full production time. Cox said the mine would indirectly provide employment for between 6,000 and 8,000 people including diamond manufacturers and jewellery fabricators.

Rio Tinto Diamonds General Manager for Marketing Jean-Marc Liberherr told IDEX Magazine – India Retail that the Bunder mine’s diamond reserves were estimated in the region of 24 million carats and it was expected to produce some 2 million carats of rough a year for between 10- and 15 years. He added that while no decision had yet been taken as to the route to market for the rough, given that there were significant quantities of champagne and cognac diamonds, which have traditionally been processed in India and the “great Indian story” behind Bunder’s production, the output lent itself to differentiated marketing and was thus unlikely to be put through a generic marketing channel.The diamonds that have been set in the jewellery were cut and polished by Mahendra Brothers and Venus Jewel, while the jewellery was fabricated by Uni-Design. Named the Courageous Spirit Collection, the jewellery is dedicated to the women of the state. It is set with a total of 25 carats of diamonds, of which 5 carats are whites and 5 carats ‘cognacs’. It also features 2.8 carats of uncut diamonds.

Shivraj Singh, Chief Minister of Madhya Pradesh, said he was pleased that 70 percent of the mine’s current personnel were locals and added that the state was eager to reap the fruits of local beneficiation with the development of a diamond cutting industry in the state and jewellery fabrication as well.

The jewellery will not be sold but used for promotional purposes by both Rio Tinto as well as the state government of Madhya Pradesh.

“The Indian diamond industry has waited long enough for others to do something,” Kothari said, adding, “if an international effort can’t be launched, we need to get one going in India. This is one of the world’s fastest-growing consumer markets.”

Seminar in progress

47IDEX INDIA RETAIL MAGAZINE| NO 2: SHOW REPORT

NEED FOR GENERIC DIAMOND PROMOTIONSAlso using the platform provided by the IIJS, the show’s organizer, the Gem & Jewellery Export Promotion Council (GJEPC), announced that it will launch a generic diamond promotion campaign of its own in the country to fill the void left by the A Diamond Is Forever umbrella campaign that was formerly run by mining major De Beers worldwide.GJEPC Vice Chairman Sanjay Kothari said that the campaign would run over a period of three years and would involve a budget of between Rs.40- and 50 crore. The GJEPC is looking at hiring an outside consultant to advise them. A previous attempt at generic diamond promotion – the 2008 Anant diamond jewellery campaign – fell short of achieving very much due to an extremely limited budget.

A few years ago, an international promotional effort known as the International Diamond Board (IDB) failed to take off as differences rose between the various stakeholders. “The Indian diamond industry has waited long enough for others to do something,” Kothari said, adding, “if an international effort can’t be launched, we need to get one going in India. This is one of the world’s fastest-growing consumer markets.”

However, Kothari said the GJEPC was keen to prod the international diamond community into action. He observed that the GJEPC was in touch with the Diamond Administration of China (DAC) to try and get a similar effort off the ground in that country.

The generic promotion project is to be placed prominently on the agenda of the 35th World Diamond Congress (WDC), that is slated to be held in Mumbai from October 14 to 17.

International Diamond Manufacturers’ Associaton (IDMA) president Moti Ganz congratulated the GJEPC on its efforts, noting that the organization’s initiative would motivate other industry organizations to join the GJEPC s initiative. “Unfortunately, past efforts to convince the major diamond producers to establish and support the International Diamond Board for diamond promotion to consumers have not succeeded despite the industry’s best efforts. The GJECP is now pointing the industry into a new direction and as it kick-starts its campaign, other industry organizations cannot but follow this example. I am confident that during our discussions at the upcoming Congress in October, in Mumbai, India, we will develop practical plans toward the international implementation of this welcome initiative,” Ganz said. IDEX

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IDEX INDIA RETAIL MAGAZINE| NO 2: INDUSTRY NEWS 49

Industry news

end Of An erA: OppenheImer fAmIly exIts de Beers

… as diamond aggregation moves to Botswana

ining major Anglo American completed the acquisition of the Oppenheimer family’s 40 percent

shareholding in De Beers on August 16, bringing to an end the family’s 80-year reign in the diamond industry. Anglo American paid CHL, the Oppenheimer family holding

company, $5.2 billion (Rs.28,987 crore) in cash, increasing its stake in De Beers to 85 percent.

Last November, the sides announced the agreement, a deal viewed by some as unfavourable to the Oppenheimers.

m

Nicky Oppenheimer

IDEX INDIA RETAIL MAGAZINE| NO 2: INDUSTRY NEWS50

million Botswana Pula (Rs.120 crore) will have been invested in the building for modifications and extensions.

Speaking at the launch, Botswana Vice President and Minister of Minerals, Energy and Water Resources Ponatshego H.K. Kedikilwe said, “This is a key milestone for the diamond industry in Botswana. By shifting the centre of gravity of the diamond world here, we are bringing in more economic activity, more skills and more broad-based business opportunities to the country. We are also growing our international profile and establishing the kind of platform that all economies need for sustainable growth and diversification.”

Nicky Oppenheimer’s contract as chairman of the company, ending in December, was not expected to be renewed, following tension between him and Anglo.Part of it included a refusal to appoint Nicky’s son Jonathan to Anglo’s board.

Under the terms of the acquisition agreement, Anglo paid the agreed purchase price of $5.1 billion (Rs.28,429 crore) and a number of adjustments as provided for under the agreement, which added an additional $100 million (Rs.557 crore).

Meanwhile, the De Beers Group formally commenced worldwide diamond aggregation in Gaborone on August 14, two months ahead of schedule. The milestone was part of the sales agreement between De Beers and Botswana, and marks the delivery of the first phase of the migration of De Beers’ sales activities to Botswana.

The process of aggregation, which involves the mixing of like-for-like diamonds from De Beers’ global production, is an integral part of De Beers’ business. It provides Sightholders (selected diamond manufacturing clients) with supply consistency to enable them to plan their downstream business and commit to long-term investments in producing countries such as Botswana. Until now, aggregation had taken place in London for nearly 80 years.

The sales agreement between De Beers and Botswana is the longest sales contract ever agreed between the two partners, and will see De Beers relocate its Sights (sales to select clients) and sales operations - including professionals, skills, equipment and technology - from London to Gaborone over the next year. The migration of aggregation is the first step of a process that will, by the end of 2013, enable De Beers to sell aggregated production from its worldwide operations to Sightholders, and will help further transform Botswana into a leading international diamond centre. With the establishment of De Beers’ aggregation in Botswana, it is anticipated that about $6 billion (Rs.33,446 crore) worth of diamonds will flow through the country.

The aggregation activities will take place in the new purpose-built De Beers facility housed within the DTC Botswana building. By the end of 2013, more than 170

The De Beers Group CEO, Philippe Mellier, added, “This is a proud day for De Beers. We have worked hard to bring the aggregation of our worldwide production to Botswana ahead of schedule. De Beers has always been committed to beneficiation in Botswana, but today, and over the next year, we will be changing our business to cement that commitment for the long term. Our focus is on providing our Sightholders with the continuity and quality of supply they expect while living up to our commitment to our partners to push beneficiation to greater levels than ever seen before.”

He added, “As De Beers shifts more and more of its sales operations to Botswana over the next year, we will solidify the long-term future of the partnership and work to transform Botswana into one of the world’s leading diamond trading and manufacturing hubs.” Idex

visit WWW.IDEXONLINE.COM

For Live UPdates

IDEX INDIA RETAIL MAGAZINE| NO 2: INDUSTRY NEWS 51

he Indian diamond industry has been experiencing substantial job losses of late. By some estimates,

thousands of workers have been laid off in the production centers of Surat, Bhavnagar and Ahmedabad.

Nanubhai Vanani, Secretary of the Gujarat Hira Bourse, the diamond exchange and SEZ located in Surat, told this magazine, “It’s true there have been lay-offs, but one can’t really gauge the extent. These are mainly due to two factors – the economic slowdown in our export markets and the substantial devaluation of the rupee against the US dollar.”

Vanani noted that strangely, some factories were still head-hunting for skilled workers and were unable to get the right people.

One diamond manufacturer who specializes in small goods (-0.03 carat), however, said that the layoff were due to a combination of high rough prices and stiff buyer resistance to any correspondingly higher polished prices. Speaking on condition of anonymity, he observed, “The production cutbacks and lay-offs have been particularly severe – up to 70 percent in some cases – in Bhavnagar and Ahmedabad.”

t

lAy-Offs, prOductIOn cutBAcks in diamond indUstry

The two centers specialize in the manufacture of small diamonds.

According to him, the problem was triggered by the sharp escalation in the prices of top end (VVS+) small diamonds, brought about by heavy buying by Swiss watch manufacturers last year. Prices in these categories shot up by 100 percent – even 200 percent in certain categories.

“People started paying substantially higher prices for rough seeing this huge escalation in prices,” said the manufacturer, “but they didn’t stop to think that this was only for the very top end goods. The lower clarities, which constitute more than 70 percent of the small goods category, have consequently fetched no margins or have actually generated losses. People held on for as long as they could, hoping polished prices would rise. They didn’t and so we’ve had financial failures among the smaller players and now the bigger operators have instituted production cutbacks.”

Vanani said, however, “The situation will definitely improve by the end of the year.” Other manufacturers concur, saying the cutbacks will help right the balance between rough and polished prices. Idex

52 IDEX INDIA RETAIL MAGAZINE| NO 2: STONE SOURCES

xactly 80 years after Sierra Leone’s first alluvial deposit was found along the Shongo stream, the

country’s diamond scene has finally entered into a new era: it is joining the ranks of Botswana, Canada, Russia and Australia by becoming a predominantly hard-rock kimberlite diamond-mine producer.

This dramatically transforming development in the diamond sector has been triggered by the formation of the Octéa Diamond Group – and its inauguration of a new processing plant at its flagship Koidu Diamond Mine. The mine is situated in the Kono District, 330 kilometers east of the capital, Freetown. Octéa also plans to develop the Tonguma Mine in the Tongo District following the completion of a feasibility study at the end of the year

As of the next quarter, Koidu’s open-pit mine will deliver 70 percent of the nation’s annual diamond production. The good governance, stability, steady employment, long-term certainty of cash-flow and related development benefits that are associated with kimberlite open-pit and underground mining will all impact the domestic economy of Sierra Leone.

E Diamonds’ Growing Economic Role Currently, some 50 percent of all the nation’s exports are derived from diamonds. Even though other commodities are now seeking investments in the country, the role of diamonds in the economy is set to increase.

The nation’s president, Dr. Ernest Bai Koroma, lauded the launch of the newly formed Octéa Diamond Group while addressing (by video) a recent gala event that was attended by shareholders, government ministers, diplomats, NGOs, financiers, members of the Sierra Leonean community and the media.

President Koroma said, “Our country has been blessed by significant mineral wealth, but the way that we manage this wealth is vital to the future prosperity of the country and the upliftment of its people.” He stressed Octéa’s role “in nurturing the diamond sector here in Sierra Leone in a way that mirrors [the] government’s commitment to true development partnership and in accordance with international best practices.”

Sierra Leone’s minister of Mines & Mineral Resources, Alhaji

SiErra LEonETransforms inTo a “PredominanTly Primary resource” diamond Producer

by ChAIm EvEN-ZohAR

first diamonds recovered from The Koidu diamond mineimage: diamond intelligence Briefs

StonE SourcES

This allows the operation to be fully transparent one, where diamonds can be traced from the mine through the value chain straight into the stores of Tiffany & Co. – the world’s most renowned diamond brand retailer and a major stakeholder in the Koidu Mine by virtue of its rough off-take agreement with the Octéa Diamond Group

Economic Benefits to Community and NationThe Koidu Mine employs 1,570 permanent workers, 90 percent of whom are Sierra Leoneans. A back-of-the-envelope calculation by Paramount Chief Paul N. Saque, who heads the Tankoro Chiefdom on which the mine is located, shows that “directly and indirectly more than 20 percent of the 350,000 people living in the rather populous Kono District are economically dependent on the Koidu Mine.”

At the inauguration of the new plant, he said that “for the first time in the history of Sierra Leone, a mining community such as ours was offered the opportunity to negotiate a Resettlement Agreement with a mining company. Koidu Mine also represents the first time that any community was allowed to directly negotiate a Community Development Agreement regarding the sharing of project benefits.”

Because open-pit hard-rock kimberlite mining requires frequent blasting (explosions) to break the rocks and “free” the diamondiferous ore, an activity that requires extensive safety measures to protect both employees and people living nearby, the Octéa Diamond Group has undertaken a relocation program for villagers living in the lease area. A wall has been erected around the 4.9 kilometer square mining grounds to prevent people from accidentally straying into the mining area – and to protect villagers against the impact of mine blasting. Some 500 houses have been, or are still being, built, dramatically improving the standard of living of several thousand people.

Minkailu Mansaray, echoed the words of the president. The minister is credited with bringing unprecedented (for any mining country) transparency to the mining sector through enacting the New Mines and Mineral Act 2009. The law addresses health and safety, environmental protection and community development. It also makes performance in all of these areas a condition for obtaining and keeping a mineral rights license.

For foreign investors, the law provides security of tenure, encourages exploration and is clear and transparent about rights and obligations. It is this law that provided the investors in the Koidu Mine with the confidence to embark on a $300 million investment.

Koidu’s New Processing PlantThe gala event marked the official opening of the Koidu Diamond Mine’s new 180-ton-per-hour processing plant – a key aspect of the Koidu Expansion Project – which will boost diamond output from 10,000 carats per month to 45,000 carats per month during the third quarter of this year. “This will effectively double diamond exports from Sierra Leone,” says Octéa CEO Jan Joubert.

At an estimated average price between $250 and $400 per carat, the Koidu Mine will be producing more than 500,000 carats of high quality diamonds a year at a value of some $200 million. The new plant will more than quadruple the mine’s current output. The country’s rapidly dwindling alluvial output is estimated at some $75 million per year. Official figures put the nation’s 2011 production figures at 357,160 carats, valued at $124,150,581.

At the state-of-the art Koidu operation, diamonds are recovered fully automatically. The final recovery vaults can only be opened in the presence of a government monitor, a government valuer and a mine representative.

53IDEX INDIA RETAIL MAGAZINE| NO 2: STONE SOURCES

Jan Joubertimage: diamond intelligence Briefs

Koidu Processing Plant constructionimage: diamond intelligence Briefs

The Koidu Mine relocation areas also contain a few mosques and churches, several primary and secondary schools, a trading market, commercial areas and an impressive health clinic. (The latter was inaugurated by Tiffany & Co. vice president Andy Hart last year, to underscore the retailer’s involvement in the Koidu project.) But the greatest contribution to these villagers may well be clean tap water provided by the mine, something none of the villagers previously enjoyed.

In addition, the mine has built or refurbished some 110 kilometers of roads in the eastern district of Kono, opening trading and transportation corridors to many hitherto nearly inaccessible communities.

The central government is a major beneficiary of the mining operation. Royalties, corporate taxes, export taxes (6.5 percent compared to 3 percent for alluvial productions) and leasing fees provide the mine with the “honor” of being the single largest tax payer in the country.

The Formation of the octéa Diamond Group“Inspired by our success at Koidu – as well as at our Tonguma Project – we undertook a major restructuring exercise towards the end of 2011 to enable the group to invest in other exploration and development opportunities in Sierra Leone,” explains Octéa’s Joubert. “We chose the name Octéa to reflect the quality of the octahedral diamonds characteristic of our diamond deposits in Sierra Leone.”

Four wholly owned subsidiaries of the Octéa Diamond Group have been established: Octéa Mining Ltd, Octéa Diamonds Ltd, Octéa Services Ltd and the Octéa Foundation.

“Octéa Mining Ltd now owns the mining assets of the group, including the Koidu Diamond Mine, previously called the Koidu Kimberlite Project, held by Koidu Limited, which was formerly Koidu Holdings,” notes Joubert. “It also includes the Tonguma Project held by Tonguma Limited. An application for an exploration licence to the east of Koidu has been submitted by the newly formed company, Boroma Ltd.”

Octea is fully owned by BSGR, a diversified natural resource company with strong presence in West Africa; In partnership with a Vale, BSGR is developing one of the largest iron ore mines in the world in Guinea and since 2003, has invested more than $300 million into the growth of the company and the advancement of surrounding communities. As Octea plans to invest in other exploration and development opportunities in Sierra Leone, it will seek to attract financing partners for the injection of a further significant additional investment into the country’s mining sector. The presence of a number of major international

54 IDEX INDIA RETAIL MAGAZINE| NO 2: STONE SOURCES

octea diamond Group's new 180-Tonne-Per-Hour Processing Plant for The Koidu diamond mineimage: diamond intelligence Briefs

bankers at the Koidu plant inauguration testifies to the interest of the banking community.

Joubert does not hide his personal aspirations. “The Octéa Diamond Group will be producing some 2 million carats annually by 2018,” he confidently predicts, saying that this might well be a very conservative figure. At today’s prices, that would be well over $700 million per year.

A mine with Two open Pits – Set to go UndergroundThe current government has completed a review of all mining licenses – and cancelled quite a few because of lack of progress or viability – and has given the remaining license holders considerable confidence and security of tenure. The Koidu mining lease is valid until July 2030, with the option to extend for a further 15 years. The property hosts two kimberlite adjacent pipes, K1 and K2, and four kimberlite dyke zones, along which four small blows or enlargements have been discovered.

After completing a five-year open-pit operation, a transition to a further 12-year underground mining process is planned. At the Koidu Mine alone, total probable reserves (as of December 31, 2010) were estimated to be 4.2 million tons, with a diamond grade of 0.44 carats per ton. However, taking another geological parameter, total indicated resources are estimated at 10.2 million tons, with a diamond grade of 0.54 carats per ton. This translates into some 5.5 million carats of future production of predominantly high-quality rough diamonds.

Koidu is the single largest tax payer in Sierra Leone. Also the royalty it pays on diamonds, at 6.5 percent of exports, is more than double those paid by alluvial operations. An IMF report comments that “in recognition of the difficulties of collecting royalties from artisanal/alluvial diamond miners and the sharp reduction of alluvial diamond exports through smuggling, the 6.5 percent tax provided by law was reduced to the original 3 percent for artisanal mining production.”

The significance of the creation of the Octéa Diamond Group must not be viewed just from a governmental revenue perspective. After 80 years of alluvial mining, these deposits have largely been exhausted. Institutionally, most of the financial benefits have not helped the economy-at-large. Alluvial mining is entering its final decades. Sierra Leone’s diamond future lies in the development of the scarce primary kimberlite deposits discovered so far. That’s both the challenge and mission of the Octéa Diamond Group. iDEX

Tiffany & Co.’s jewelry brand, business model and good governance policies require the company to adhere to the most exacting standards of business ethics and environmental and social conditions under which its jewelry is produced.

To ensure an impeccable chain of custody, in 2002, Tiffany adopted a business model of purchasing rough diamonds and having its own polishing plants – through Laurelton Diamonds. The vast majority of diamonds purchased by Tiffany originate from Botswana, Canada, Namibia, South Africa, Sierra Leone, Russia and Australia.

Laurelton Diamonds, headed by Tiffany vice president Andy Hart, is a wholly owned subsidiary of Tiffany & Co. The company ensures the integrity and high quality of its diamonds through strict control of a global supply chain that sources, cuts, polishes and supplies finished stones to Tiffany & Co. Laurelton Diamonds has operations in the United States, Belgium, South Africa, Botswana, Namibia, Vietnam, Mauritius and China.

Tiffany’s purchases of conflict-free rough and polished fine white diamonds, in the color ranges D through I and in sizes above 0.18 carats, represent a significant portion of the world’s supply of fine white diamonds in those color and size ranges. Indeed, in recent years, approximately 50-60 percent of the polished diamonds acquired by Tiffany for use in its jewelry has been produced from rough diamonds bought by the company.

Tiffany’s stated policy is, from time to time, to secure supplies of diamonds by entering into off-take agreements with mining companies. The Koidu Diamond Mine is a preferred source of diamonds for the company. In the past, it has assisted in financing the expansion of the mine by making an advance of $50 million on account for future deliveries. Tiffany management expects that it will purchase approximately $200 million worth of rough diamonds in 2012 directly from mining sources.

The Partnership with Tiffany’s

55IDEX INDIA RETAIL MAGAZINE| NO 2: STONE SOURCES

ADVE

RTO

RIA

L

Avoid Stone Loss: Securely Set Round Brilliants

ine jewellery represents much more than its trade value in diamonds, gemstones and precious metals. It is a personal representation of the owner’s lifestyle, status,

history, ritual, beliefs, emotion, recognition, commitment, commemoration, remembrance and more. That significance only amplifies how devastating the loss of a gemstone will be for the owner. Even one missing accent stone renders the jewellery unwearable. A major loss will also weigh heavily on the retailer who sold the pieceand the manufacturer who produced it.

But stone loss can be avoided. Inspecting each piece and comparing it against benchmarking standards for signs of vulnerability in normal wear gives the jeweller a chance to address potential problems before offering it for sale. Adopting benchmarking standards emphasizes good workmanship and assures the quality of the jewellery for the consumer.

There are two main reasons gemstones become loose or lost in jewellery: errors inworkmanship and the absence of stone-

setting benchmarking standards (specific categorical parameters used to compare and evaluate the acceptability of a finished product).

Examples of the quality assurance benchmarking standards presented here are for setting round brilliant gemstones in two styles of prongs: traditional angle orstraight. (Figure 1)

Prong setting QUality BenChmarking Parameters – traditional angled ProngsA. Prong angle is 70-80 degrees.

B. Sufficient prong thickness is needed to secure the stone in place, so 40-50% metal is removed from the prongthickness at the bearing.

C. Diamond is seated level in bearing just above the

gallery wire. There are no gaps in any bearing – the bearing is the cut made in a prong and must precisely fit the stone contour when properly set. Any gaps will allow the stone tomove or loosen. D. Finished prong height is 75-85% of table height.

Ample prong height allows the prong to hold-up throughnormal wear. E. Prong contact is 33-50% of total crown distance. Adequate prong contact over the crown is critical to a stablesetting. F. Prongs are rounded, polished and consistent in size and shape.

F

Potential errors in WorkmanshiP for traditionalangled Prongs

Example 1: Using benchmarking with the quality assurance parameters, you will note a bearing was not cut (lower blue arrow) and the diamond is not seated. Prong contact isinsufficient (upper blue arrow) and barely secures the diamond.

Example 2: The bearing does not conform to the crown and pavilion angles of the diamond so there are large gaps. Toomuch metal was removed from the prong thickness.

Information compiled from GIA’s Jewelry Manufacturing Arts program, which includes Applied Jewelry Arts, Graduate Jeweler, Jewelry Design and Comprehensive CAD/CAM courses.

figUre CaPtions:All figures © GIA

Figure 1: Center stone prong setting quality benchmarkingcriteria for angled prongs.Figure 2: This center stone has no bearing. Figure 3: This prong is overcut and there is visible open spaceat the bearing.

gem and JeWellery resoUrCes in india GIA grading reports and professional training are essential tools for enhancing consumer trust in the retail associate’s expertise. As India’s market for diamonds and gems continues to dramatically grow, so too have the resources available tojewellery professionals. They include:

gia laboratory – GIA’s laboratory in India, located in Mumbai’s Bandra Kurla Complex, grades D-Z color diamonds rangingfrom 0.15 carats to 1.99 carats. The laboratory is also a take- in center for diamonds in larger sizes and other colors, as well as coloured stones and pearls, which are routed to GIA laboratories worldwide for servicing. The Mumbai laboratoryalso offers laser inscription and diamond sealing services.

GIA tests every diamond it grades for laser drilling, fracture filling, surface coating, artificial irradiation, High Pressure/High Temperature (HPHT) and Chemical Vapor Deposition (CVD) to detect known treatments and separate natural diamondsfrom synthetics.

Grading reports are not issued for diamonds that have undergone unstable treatments, such as coating or fracture filling. And, while grading reports may be issued for diamonds that have been laser drilled, artificially irradiated or HPHT processed, these treatments are prominently disclosed on thereport.

gia Professional training – GIA’s Mumbai campus offers a wide variety of courses and instructional formats to meet the diverse needs of India’s jewellers and manufacturers. Theseformats range from on-campus programmes, lab classes, skill- building seminars and workshops, to customised corporate programmes, and online learning designed to minimize disruption to work schedules.

GIA courses are continually updated to ensure the most timely and accurate information and are taught in local languages throughout India.

To learn more about the GIA Laboratory services and training programmes available to jewellers throughout India, visitwww.giaindia.in or email [email protected]

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Documents

IDEX India Retail, September 2012