JEWELLERY EDITORIAL
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2014/04/16

Expected improvements in the economic environment are likely to fuel demand for jewellery and drive unit price growth. However, a slowdown in value growth is expected for jewellery given Taiwan’s falling birth rate and people delaying marriage. Fashion jewellery growth is set to exceed that of fine jewellery in both value and volume.

While gold will remain the major type of jewellery purchased, demand for diamonds will likely to increase especially among the young generation of consumers.

An important factor expected to boost retail sales of high-priced jewellery is from the large influx of mainland Chinese tourists. This consumer segment has showed huge business potential for international players. Thanks to the further opening up of trade and tourism between mainland China and Taiwan, opportunities for high-valued jewellery are expected to increase significantly.

Taiwan 101 Tower, Taipei | Source: Shutterstock - Ronan Chen
 
Table 1. Taiwan jewellery sales forecast 2012-2017
  2012 2013 2014 2015 2016 2017
Jewellery (USD bn) 3.48 3.55 3.63 3.72 3.84 3.99
Growth +7% +2% +2% +3% +3% +4%

Source: Euromonitor International from trade associations, trade press, company research, trade interviews and trade sources
 

Table 2. Jewellery company shares in Taiwan 2007-2011

 
 
2007
2008
2009
2010
2011
Goldenlife Gold Jewelry Co Ltd
1.3
1.4
1.5
1.6
1.6
Tiffany & Co
1.1
1.1
1.2
1.4
1.3
Swarovski Hong Kong Ltd
0.8
0.9
1.0
1.2
1.2
Sophia Jewellery Co Ltd
0.5
0.6
0.7
0.8
1.0
Chow Tai Fook Jewellery Group Ltd
0.4
0.5
0.6
0.7
0.9
De Beers Group
0.4
0.5
0.5
0.6
0.6
Chow Sang Sang Holdings International Ltd
0.3
0.4
0.5
0.5
0.6
Hearts On Fire Co LLC
1.5
1.1
1.0
0.7
0.5
Agnes B Taiwan Ltd
0.2
0.3
0.3
0.4
0.4
Fan Gov Precious Stone Co Ltd
0.3
0.3
0.3
0.3
0.3
Others
93.2
92.9
92.4
91.8
94.5

Source: Euromonitor International from trade associations, trade press, company research, trade interviews and trade sources
 
 

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2014/04/16

The good news is crime is down in the jewellery industry. The not so good news is that the money stolen is up. This is from the annual report by the Jewelers’ Security Alliance, which provides crime information and assistance to the jewellery industry and law enforcement.

Overall jewellery industry crime in the US during 2013 fell 8.1 percent, year-over-year, to 1,414, according to JSA statistics [pdf]. However, during the same period, the total dollar losses from crimes against jewellery firms in the U.S. rose 10.5 percent to$66.5 million.

JSA explains that the increase in the dollar amount is due to an “increased number of large, million dollar and multi-million dollar robberies and burglaries.”

JSA adds that on an inflation adjusted basis, using 2013 dollars, the $66.5 million in losses for 2013 represents a 60.3 percent decline since 2003.

 

Other highlights of the report:

* The number of burglaries in which criminals entered through the roof increased 89 percent year-over-year to 34 in 2013.

* In 2013 there were six homicides of jewelers in the U.S. compared to two in 2012. To put this in historical perspective, JSA says that from 1995 to 2000 the average number of yearly homicides of jewelers was 12, while in the early 1990s there were as many as 37 a year.

 

Crime in the US Jewellery Industry Falls 8.1% but Remains an Issue
Source: Shutterstock | Anneka

 

The JSA breaks down its crime statistics in two categories: “on premise,” occurring in a retail environment, and “off premise,” outside the store and often involving traveling jewellery salesmen or retailers who were followed after they left the store.

The biggest drop by far is in “off premise” crime. Dollar losses decreased by 17.7 percent during 2013 and the number of criminal events decreased approximately 41 percent to 40 in 2013, the lowest in at least 30 years. To put this in historical perspective, in 1999 there were 323 off-premises losses, eight times more than in 2013.

Most crime happens on premise and the figures for this type of crime are mixed for 2013. There was 17.7 percent increase in dollar losses to $56.3 million and a 6.5 percent decrease in criminal events to 1,374.

When it comes to on premise jewellery crime, criminals are being more creative and less prone to violence. Even though homicides have increased this year, as noted above, the number is so low, they are statistically irrelevant. This accounts for most crime with a deadly weapon in 2013. Of course it’s not insignificant to the victims and their families.

While overall robberies are down 7.8 percent, a particular type of robbery known as “smash and grab” increased from 52 in 2012 (9 with a gun) to 62 in 2013 (20 with a gun). As the name suggests, this is when one or more person enters a store when it is open, smashes the display cases and grabs as much merchandise as they can before fleeing. This is the one area where gun usage is up.

A similar type of theft, which JSA describes as “Three Minute Burglaries,” is usually committed in the middle of the night by smashing a glass front door or window of a retail establishment, then smashing display cases and stealing out-of-safe merchandise. JSA says this category represents approximately 71.2 percent of the total number of burglaries experienced by the jewellery industry with an average loss of approximately $24K worth of jewellery.

This is in addition to the dramatic increase in rooftop burglaries, which was noted above.

So violence in the jewellery industry is steadily improving (though still unacceptable) but thefts and burglaries remain a problem.

 

 


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2014/04/16

I’d like to offer few words of career advice to young people that are just entering the jewellery business. This industry has so many different career paths with plenty of nooks and crannies along the way that it can be overwhelming to try decide which path to take, or even where you want to go.

Learn what you can about as much as you can but strive to be the best at something.  Be that person that everyone turns to within your particular specialty. Try to attend as many jewellery and gems shows as possible.  Start making plans to go to Tucson; it is a wonderful educational opportunity.  Seek out dealers that specialize in a single species or gems from a single location.  They will be passionate about their area of expertise and are great sources of information.  Handle as many stones as you can.  Ask questions, lots of them.

Get as much schooling as possible and never stop learning.  You can get a well-rounded body of knowledge from several online resources that have tons of information for free.  But paper on the wall will greatly enhance your career.  The best resources for education are GIA in the US and Gem-A in London. With both of them you can study at home.  If you can afford the time and money to attend residence programs at GIA or Gem-A, do it.  Or better yet, study in Bangkok at GIA or AIGS and be right at the heart of the coloured stone industry.  The cost of living in Bangkok is so much lower than in Carlsbad or London that it will more than offset the travel expenses.  The experience will be priceless.

If you enjoy working at the bench consider getting trained as a watchmaker.  The best schools are in Switzerland. They are very expensive but earning the proper certifications for different fine watch brands will virtually guarantee a VERY high paying job, even at the start.  Mechanical watches are increasingly popular but most of the good watchmakers are old and dying off.  It is a wide open field and you would be in strong demand.

TRAVEL!!  Travel far, travel wide.  Go to sources, shows and markets.  Visit factories and mines.  Get out there and meet the world.  My biggest regret is that I did not start going overseas until a few years ago.  I did rack up over a million miles traveling in the US and Caribbean in the jewellery business but going overseas really opened my mind to a whole new world and a broad range of new opportunities.

Find your passion and LIVE IT!  Let it guide you, don't try to guide it.  Follow it where ever it wants to take you.  Don't worry too much about money.  Let your passion feed itself; you are just along for the ride.  If your passion is well-fed, you will be fed along with it.

Your journey will be far more complex than can be mapped out in a single discussion, but hopefully this can help guide you in finding your own direction in the industry.

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2014/04/15
It appears that all is not well on front of the Marange diamonds yet as the issue has been reopened by the Western countries even after suffering repeated setbacks by them in the Kimberley Process (KP) summits during recent past.

Media reports suggest that the Western countries aim to use Organization for Economic Co-operation and Development (OECD) to pressurize the global industry not to source Marange diamonds. It is also learned that the European Union (EU), which revoked its illegal sanctions on the Zimbabwe Mining Development Corporation (ZMDC) recently, is now once again keen to redefine ‘blood diamonds’ so that Zimbabwe's stones fall within the new definition.
 
What next for Marange Diamonds?
What next for Marange Diamonds?

Zimbabwe’s Mines and Mining Development Secretary Professor Francis Gudyanga says, “European countries under the 34-member strong OECD which is also known as the Paris Club are trying hard to have Zimbabwe's diamonds classified as conflict diamonds. We along with other diamond producing countries would resist any such moves.”

Western countries have a specific strategy in their minds of using the OECD so that they can put the subject beyond reach of both the KP and its many African members. Sniffing this move in advance, South Africa (which is a member of the KP) has already written a protest letter to the Secretary General of the OECD about the matter, arguing that the Western countries cannot promulgate new rules for the global diamond industry without taking into confidence the producer nations who may not be members of the OECD but are in the majority and genuine owners of the diamonds.

Zimbabwe’s President Mr. Robert Mugabe who recently boycotted the EU-Africa Summit says, “The West has been adopting double standards in dealing with African and Third World countries. Earlier, business of the KP was running without any problems but the moment Zimbabwe unearthed diamonds, they started opposing to Zimbabwe and now they want to impede and prohibit the selling of its diamonds. They want to ruin us with their evil thoughts. They would not like to give up. Once defeated in one area, they speedily move on to another."

It would be quite interesting to note here that the EU had withdrawn sanctions inflicted on Marange diamonds at the behest of the Antwerp World Diamond Centre (AWDC) and earlier the KP had also lifted its ban against dealing in Marange diamonds. But the Parliament of Belgium recently adopted a motion for a resolution stating, “…the KP has failed in battling the prevalence of conflict diamonds.” This apparently shows a rift among the European countries as far as the issue of Marange diamonds is concerned.

On the other hand, shrewd President Mugabe has successfully explored new markets recently in United Arab Emirates (UAE) and China. This can be an indication that the Zimbabwean government may dump AWDC in Belgium in favor of the Dubai Diamond Exchange (DDE) or the Shanghai Diamond Exchange (SDE) in China. Mr. Mugabe had visited Dubai recently for setting up an embassy in the UAE. Sources close to the government say that the embassy would have no major diplomatic function other than overseeing the Zimbabwe's diamond business.

A battle-line has once again been drawn between Western countries and Zimbabwe. A fierce diplomatic war is expected to be fought among the ‘vested interest’ parties with new clouds of trouble looming large over the Marange diamonds.
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Photo Caption:
 
 

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2014/04/10
Diamantaires here are now looking forward to Zimbabwe, Angola, Tanzania, South Africa and other African countries for procuring goods by taking advance remittance from the banks.
 
Previously, only a handful of global miners of rough diamonds like Diamond Trading Company (DTC), Alrosa, Rio Tinto, BHP Billiton, Endiama, Gokhran, Harry Wintson, etc. were notified to whom the Indian importer was permitted to make advance remittance without any limit and without a bank guarantee or standby letter of credit for import of roughs.
 
A circular issued by the RBI stipulates that banks are now allowed to decide on the foreign mining companies to which an importer can make advance payments, without any limit or bank guarantee or standby letter of credit. However, the concerned mining company must have recommendations from India’s Gem & Jewellery Export Promotion Council (GJEPC) certifying good records of the importer.
 
RBI measure would help small sized manufacturers
RBI measure would help small sized manufacturers
 
Earlier, small and medium sized diamantiares here were dependent on the secondary market in Mumbai and Surat to buy rough diamonds by paying premium rates between 10 and 20%. So, many diamantaires were frequently travelling to Antwerp to purchase rough diamonds from the traders who used to charge extra 3 to 8% on the carat value of the diamonds.
 
The move has been vastly welcomed in the industry circles here in India. Chairman of Shrenuj & Co. Mr. Shreyas Doshi says, “RBI’s measure would help India’s diamond industry, as manufacturers and traders here would be able to buy rough diamonds from anywhere. Our hands will be free now.”
 
On the other hand, the industry leaders here are persuading the government to withdraw the existing 2% import duty on cut and polished diamonds. Israel’s decision to reduce import duty on polished diamond from 0.135% to 0.1% would boost its local diamond industry. But this could affect the Indian diamond industry as the import duty on polished diamonds in India remains still unchanged at 2%.
 
Deputy Prime Minister of Belgium Mr. Didier Reynders also had requested India’s Commerce Minister Mr. Anand Sharma to reconsider the issue of 2% import duty during his official visit here.
 
The duty on cut and polished diamonds in India was levied in January 2012 after more than five years of duty free imports. The move was aimed at controlling the widespread menace of round-tripping, whereby diamond companies here seek to enhance turnover to get extra bank finance. However, India’s polished diamond exports declined by 37% at $16 billion in 2012 and imports of polished diamond also came down to 72% to 5.5 billion during that year.
 
"Israel is the second largest diamond cutting and polishing centre in the world after India and it specializes in small and big stones. India also is a big centre for big-sized diamonds. Our transaction cost always goes higher than manufacturers in Israel because of this 2% import duty," says a source from India’s DTC Sightholder.
 
Mr. Pankaj Parekh, Vice-chairman of GJEPC says, "Although the import duty on cut and polished diamonds in India was a good move by the government but the genuine exporters here are facing problems because of the lower trading activity. So we have requested the government to permit duty free import quotas for cut and polished diamonds to the tune of 15% of the preceding year's exports."
 
"If country like Israel can take positive steps for the growth of its diamond industry, why can’t we? We decisively believe that the Indian government also should contemplate our demand to allow 15% duty free import of cut and polished diamonds," Mr. Parekh added.
 

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