Gems, jewellery exports may touch 20 bn by 2007

Press Trust of India

New Delhi, September 17, 2006

Gems and jewellery exports from the country are likely to touch 20 billion dollars by 2007 with buyers from the US and European Union increasing bulk purchases of diamond studded jewellery from India because of its affordability, according to a report.

The study by ICRA said India has achieved a reputation of being world’s leading diamond cutting and polishing centre for smaller stones. Now industry leaders are looking to process larger stones to clock greater growth by utilising modern advanced technologies besides cheap abundant labour.

Quoting figures released by GJPEC, ICRA said exports of gems and jewellery were expected to touch 20 billion dollars by 2007.

Although, the positive development in the industry has also been due to pick up in demand in major markets like the US, Belgium, Israel and Hong Kong and decline in growth of its major competitors.

The improved perfomance of the Indian GJ industry is also due to the decline suffered by its competitors like Belgium whose polished diamond export declined by 3.8 per cent in 2005 to 9.36 million carats. The volumes of Israel’s polished diamonds also decreased by 3.2 per cent in 2005 to 4.49 million carats.

Exports of gold jewellery have increased to Rs 170.15 billion in 2006 from Rs 52.20 billion in 2001, but are constrained by an inability to compete in global markets on the basis of price and superior design capabilities, the report said.

However, India has a positive future in gems and jewellery sector, that would be driven by increased exports to the US and other markets and growth in domestic consumers.

Significant opportunities would also arise because of promotional programmes launched by DTC for leading Indian diamond and jewellery manufacturers and exporters to boost the marketing of their products in India and abroad, the report said.

In domestic market too, diamond industry is optimistic because the healthy growth in world GDP and increased marketing expenditure would result in increased demand growth with countries like India and China becoming a potential new sources of demand for diamonds.

In India, diamonds are an established consumer product, but compared to gold the potential size of the market is only just being recognised, but the country draws a competitive advantage with its skilled labour, technology and increased degree of vertical integration.

Dazzling rise for diamonds

Simon Fleundy, Mail on Sunday
17 September 2006

Starlet Lindsay Lohan was lucky to track down the diamonds she lost at Heathrow airport last week – soaring gem prices mean replacing them would probably have cost her a lot more than their reputed $1m (£530,000) value.

Tim George, chairman and chief executive of diamond prospector Xceldiam, said prices were expected to rise 30% annually for the next few years after last year’s 95% surge.

‘There is a supply issue with some large mines becoming played out, but there is also a lot of new demand,’ he said.

‘China, which represents only two to three per cent of the £16 billion-a-year retail gem trade, is growing incredibly rapidly. India is also seeing sales soar 15 per cent a year.’

Small, rough diamonds trade in bulk for about $150 (£80) a carat. Bigger stones cost much more – about $10,000 for a ten-carat stone or millions of dollars for a 50 or 60-carat rock. Cutting and polishing quadruples the price before a jeweller sets the stone and sells it to a celebrity or a man about to go down on one knee.

Tiffany posts lower Q2 earnings

By: PolishedPrices

Tiffany & Co reported a 19% drop in second-quarter profit, compared to the previous year. It said net earnings declined primarily due to a tax gain last year.
Net income fell to $41.1 million, from $50.6 million in the previous year. Sales rose 9.2% to $574.9 million.

The figures were below analyst expectations.Sales at stores open at least a year rose 5% in the US. In Japan, same-store sales declined 3%.

For the full year, the New York-based jewellery retailer said it expects a “low double- digit” increase in earnings before income taxes.

For the third quarter, Tiffany forecasts a “mid-single- digit” percentage increase before income taxes.

De Beers Mining and Exploration chief resigns

By: PolishedPrices

(20.08.06) / Mining

While no official announcement will be made until next week, De Beers confirmed on Friday that its Director of Mining and Exploration, Ed Dowling, is leaving the South African diamond company.

Dowling, who joined De Beers two years ago, will take up a CEO position with another mining company. De Beers said the company was not a competitor.

No further details were given about his departure.

Interest Gains Put Shore Gold in the Black for 1H06

By Jeff Miller

Diamond explorer Shore Gold Inc., of Canada, reported second quarter and first-half highlights for 2006 ending June 30. The company reported profits of $600,000,  and working capital of $235.4 million for the second quarter.

The Fidelity Group of Funds acquired a 12.5 percent interest in the company during the second quarter.

Shore Gold and partners at Fort a la Corne voted in a $43.2 million budget program for the 2006 fiscal year on the  property, of which Shore Gold will finance approximately $20 million. This consensus was reached despite De Beers having launched an action to void the voting agreement among Shore Gold,  Kensington Resources Ltd., Cameco Corp., and UEM Inc.

By the end of June, two of the expected five core drilling rigs had begun drilling and the project is expected to complete by late December 2006.

Shore Gold’s  net income of $600,000 was up from a net loss of $200,000, in second quarter of 2005. The increase  is predominately related to increased interest revenue for the second quarter of 2006. The increase in interest revenue was somewhat moderated, as expenses continue to increase as the company grows.

For the six-month period ending June 30, 2006, Shore Gold recorded net income of $1 million, compared with a net loss of $1.8 million in 2005. The $2.8 million positive change  is predominately from increased interest revenue.

De Beers Acquires 12% Stake in Pure Gold Minerals Inc.

By Jeff Miller     Posted: 8/16/2006
De Beers Canada  now controls  12.07 percent of Pure Gold Minerals Inc., by having acquired 27.5 million common shares plus warrants to acquire another 5 million commons shares. Ten million shares, purchased for $600,000, are subject to lock-up due to pre-arranged property option agreements.  De Beers granted Pure Gold sole right to an 85 percent co-ownership interest in certain joint venture properties in the arctic region.

Pure Gold closed a private placement on August 11 in which the company earned $3.6 million in brokered funds and $184,000 in non-brokered funds, all of which was in addition to the De Beers deal.

“The closing of the private placements and the rights offering totaling in excess of $5 million represents a further milestone for Pure Gold as they assure the corporation’s ongoing participation in the High Arctic Program with De Beers, one of the most significant agreements that Pure Gold has ever concluded” said Gordon Keevil, president of Pure Gold.

The properties within the High Arctic Portfolio include Baffin Island, Eden Point, Muskox Hill, Chartrand Lake, Byron Bay, and Mount Pelly.

Gemscience.net Adds Report, Tracking Tools to Website

By Jeff Miller

Gemological Science International (GSI) launched a new website called The GEM Experience, which provides the trade two value-add tools:  1) the ability to view their final grading report online as soon as it is processed and 2) to track the status of their diamonds from anywhere at anytime.

“Both the online actual report accessibility and the real-time tracking system significantly reduce the communication time between the lab and its clients, which is a benefit for both parties,” said Mark Gershburg CEO of GSI.

The website (www.gemscience.net) requires a unique combination of proprietary registration numbers known only to the lab and the stone’s owner for extra security login.

“The human relationship with gemstones is an important yet often overlooked aspect of what we all do, which is why we named the website ‘The GEM Experience,’” Gershburg said.   Users may also   “scope” a diamond at 60 power or take a virtual tour of his lab on the website.

A pictorial “Tour Our Lab” section invites web visitors inside the lab to have a better understanding of how a diamond or colored stone is graded.

The virtual tour begins with the security features of take-in, where the diamond is identified for tracking purposes, and then follows the diamond through color and clarity grading, gem identification, and laser inscription, among other services.  It concludes with the printing of the report and an interactive explanation of each term.

India July Polished Diamond Exports Fall By 17%

By Jeanette Goldman

India’s total cut and polished diamond (CPD) exports for July 2006 fell 17 percent to $858.2 million from July 2005, according to provisional data released by India’s Gem & Jewellery Export Promotion Council (GJPEC.)

In terms of volume, India’s total CPD exports fell 26 percent to 3 million carats.

Rough diamond exports fell 3 percent to $34.8 million in value and increased 28 percent to 3.9 million carats.

Imports of cut and polished in July dropped 62 percent to $131.5 million, while rough diamond imports fell 18 percent to $754.3 million. In quantity terms, total rough diamond imports declined 14 percent to 14.5 million carats.

For the seven month period ending July 31, polished diamond exports fell 14 percent in value to $6.4 billion and climbed 5 percent in volume to 30.7 million carats.

India ’s rough diamond imports fell 16 percent in value to $4.6 billion, and declined 20 percent in volume to 92.2 million carats during the first seven months of 2006.

DTC Launches Kya™ Diamond Jewelry in South Africa

By: Sharon Gefen

(16.08.06) / Retail

A new concept in diamond jewelry has been launched by the Diamond Trading Company (DTC) for the South African market. Called Kya™, the DTC says that the collection captures the independent spirit of the South African woman.

According to Thoko Modisakeng, DTC Marketing Manager for South Africa, the company seeks to drive demand and expand sales by creating a powerful new concept in diamond jewelry. “Our task” he said, “was to create a South African diamond brand that would give a compelling reason to buy diamonds, and create huge desire and preference for diamond jewelry amongst the domestic consumer target segment. The brand is meant to provide value to all the stakeholders in the value chain and bring diamonds into the news.”

The Kya™ concept reflects the independence and success of the modern South African woman. It is based on a center stone that represents power and individuality, and smaller diamonds that radiate beauty, mystique and strength – all these attributes of the new South African woman.

The new Kya™ collection is based on the philosophy of “wearability, good design and affordability.” According to the DTC, “When you wear your personal piece of Kya™ diamond jewelry, you will feel the unique spirit of Kya™ within you.”

Four sightholders are participating in the program: Geffens Diamond Cutting Works, Livingstones Jewellery, KGK Star Rough and Rosy Blue Manufacturing.

Fabrikant in discussions

By: PolishedPrices

(16.08.06) / Retail

Fabrikant, the New York-based wholesale diamond company, is facing a couple of court filings from suppliers seeking over $7.5 million in unpaid invoices, according to sources close to the situation.

The company is understood to be in discussions with the parties and no further action has been taken. The lawsuits were filed by KP Sanghvi & Sons and Blue Star, two Indian diamond companies, in the US District Court, Southern District of New York in Manhattan in July and August respectively.

A source familiar with the cases said; “It is in the mutual interest of the banks, vendors and party involved that there is a mutual agreement”.

Last week, Fabrikant announced it had reached an agreement with its domestic lenders. It is still in discussions with its foreign lenders to obtain a similar understanding.

As part of a worldwide review of its operations, the company recently entered into a new joint venture with Tara Jewels, an Indian jewellery manufacturer.

Fabrikant, a fifth generation family run business, has over twenty companies in 10 different countries.