INDIAN GEM & JEWELLERY INDUSTRY

SETHU P.M MBA 1st Year

SJCET SCHOOL OF MANAGEMENT

Indian Gem and Jewellery Industry

WELCOME ALL

3

OVERVIEW Large market for Gems & Jewellery with

domestic sales of over $10 billion. 4% of the global Gems and Jewellery market. Exports of over $15.5 billion; over 18% of

world’s exports. India is the largest consumer of gold jewellery

in the world. Accounts for about 20% of world consumption

India is the largest diamond cutting and polishing centre in the world.

60% value share, 85% volume share and 92% share of the world market by number of pieces.

Third largest consumer of polished diamonds after USA and Japan.   

G em stones

Gemstones

Diamonds

Gem & Jewellery

Silver and Silver

Jewellery

Gold and Gold

JewelleryPearls

Gemstones studded

Jewellery

Coloured Stones

Precious Metals and Jewellery

Gold and diamond form the two major segments of Indian gems and jewellery market

Value chain of the Gems and Jewellery sector

GEMS AND JEWELLERY Gems and Jewellery is an important emerging sector in

the economy. Ranked among the fastest growing sectors, it is also a leading sector for foreign exchange generation.

Major Segments The sector comprises of two major segmentsGold Comprises around 80% of the Indian jewellery market,

balance comprising fabricated studded jewellery (Diamonds and Gemstones).

High levels of manufacturing and domestic consumption. Diamonds World's largest cutting and polishing Industry for diamonds. Well supported by the banking sector and government

policies. Export potential for polished diamonds / finished diamond

jewellery.

Size of Retail Market in India

800

700

600

500

400

300

200

100

0

Gold jewellery Diamond Other fabricated

Jewellery Jewellery

Size in year 2013(in billion)

630

32175

One of the fastest growing segments in the Indian economy with an annual growth rate of approximately 15 percent.

The current market size of the Indian Gem & Jewellery Industry is US$ 25 Billion.

Total export of gems & jewellery in the year April-March,2013 was 302081.11 with a 3.36% growth rate & 21.27% share in the total export.

Consumes nearly 800 tonnes of gold that accounts for 20 percent of world gold consumption, of which nearly 600 tonnes go into making jewellery.

GEMS & JEWELLERY INDUSTRY

The consumption of gold in India has doubled over the past two decades. 402 (tn) in 1989 810 (tn) in 2009.

In 2012, gold imports in India increased 68% year on year to 970 tonnes from 579 tonnes in 2011.

whereas the demand for gold increased by 10% year on year globally to 3,971 tonnes in 2012 .

Gold prices continued to be volatile in the month of July 2012 and touched a high of Rs. 29,983/- per 10 gm.

India's strength lies in the 2 million highly skilled workforces in the country in the gem & jewellery sector, out of which 1 million are exclusively engaged in export production.

The domestic market was guessed to be approximately US$ 18.1 billion in financial year 2013.

The Gem & Jewellery Industry has started showing positive signs of revival and growth.

continue

DIAMONDS INDUSTRY

Largest diamond cutting and polishing centre in the world—with 60 per cent value share, 82 per cent carat share and 95 per cent share of the world market in terms of number of pieces.

In the period of 9 months from April to December’09 exports of rough diamond declined by 37% to 157.09 lakh carats whereas the exports of cut & polished diamonds mounted by 18% to 407.36 lakh carats

Nearly 9 out of 10 diamonds sold worldwide are cut and polished in India.

DIAMONDS INDUSTRY

Exported cut and polished diamonds worth US$ 17.18 billion in 2012-13

Manufactures diamonds of all cuts, shapes and sizes of all varieties like round, princess, baguettes and all fancy cuts.

Has democratized Diamonds by mastering the art of cutting near gem quality diamond.

India accounts for approximately 60% of global polished diamonds market in terms of value and more than 90% in terms of pieces.

continue

With the rise in gold prices, consumers are turning to diamond studded jewellery which gives them a higher perception of luxury and value.

Due to the global slowdown, diamonds are now relatively cheaper when compared to their prices in 2013.

Diamond jewellery sales have increased four-fold from U.S $ 1 billion to U.S $ 4.2 billion in the last four years.

About 25% of the gold jewellery purchasers have switched to diamond ( diamond jewellery is typically casted in less-pure 18-carat gold compared to gold jewellery which is made from 22-carat gold).

comparative costs of processing diamond in different countries

SWOT Analysis…

STRENGTHSLarge integrated diamond & jewellery players and having an

international presence. Strong marketing & distribution network. Strong retail

presence in India and in U.S. Strong brand equity and broad product range like Gitanjali,

Tanishq. Net Worth of the total size of the gems and jewellery sector

(both domestic and exports) is about Rs 4,15,000 crore . So we can say that it is financially very strong sector.

Highly skilled, qualified and motivated employee.

WEAKNESSES

• There may be conflicts of interest between organized & unorganized players.

• As the major raw material requirements need to be imported, companies normally stock huge quantities of inventory resulting high inventory carrying costs.

• Technology is less improved compared to China and Thailand’s company.

New markets in Europe & Latin America.

Growing demand in South Asian & Far East countries.

Industry moving from a phase of consolidation.

Expansion possibilities in lifestyle and luxury products in India like watches, leather goods, Platinum jewellery because increasing disposable income of people.  

OPPORTUNITIES

International Competition:-China, Sri Lanka and Thailand's entry in small diamond jewellery.

Increase in the price of Gold & Diamonds.

Other local competitors. According to the data 97% jewellery sales are by family jewelers.

Threat from producing nation like S.A. & Russia.

THREATS

DRIVERS and CHALLENGES

Indian retail jewellery overview

Yesterday Today

Unbranded Branded

Silver & Gold jewellery Gold & Diamond jewellery

Investment Investment + Fashion

Traditional design Fashionable & innovative

design

Marriage & festival is peak

season

Wearability and gifts

Jewellery sold on commodity

basis with labour charges

Jewellery being sold on a per

piece basis

Major Players Asian Star Co Ltd.

B. Vijaykumar

Gitanjali Gems Ltd.

Hindustan Diamond Co. Pvt. Ltd.

J.B Brothers.

K Girharilal.

Laxmi Diamond.

Mehendra Exports.

Rajesh Exports Pvt. Ltd.

Rosy Blue.

Sheetal Manufacturing.

Shrenuj & Company Ltd.

Suasish Diamond Ltd.

Su-raj Diamonds & Jewellery Ltd.

Tanishq.

Tara – Ultimo.

Vaibhav Gems Ltd.

Established in 1992 (HQ: Nariman Point ,Mumabi)

Product of portfolio includes Polished Diamonds & Jewellery 30 Marketing arms spread across Asia, Europe and America.

More than 2000 professionals and skilled workers.

Two manufacturing units: MUMBAI and in SURAT.

Global presence in CANADA, US, BELGIUM, CHINA, UAE, HONGKONG, MALAYSIA, THAILAND and SINGAPORE.

An annual growth rate of approximately 15%.

Asian Star Co Ltd. MD: Mr. VIPUL SHAH

GITANJALI GEMS Ltd MD : Mr. MEHUL C. CHOKSI

Established in 1986 as Gitanjali Gems Pvt Ltd(HQ:Maharashtra)

The company is one of India’s largest integrated diamond and jewellery .

Sight holder status with DTC through a promoter group company.

Sophisticated and scalable diamond and jewellery manufacturing facilities.

Approximately 1,246 retail outlets in India and 143 outlets in the U.S.

Gitanjali Gems posted net revenues of Rs 9.76 bn, a growth of 60% in 2013.

Leading brands

Hindustan Diamond Co. Pvt. Ltd. MD:Ms. ALKA TYAGI

Incorporated in the year 1978.50:50 joint venture between the Indian government and

De Beers.

26% in De Beers India by investing US$ 7.75 million in India.

Member of Diamdel network.

HDCL has office in Mumbai and Surat.

P.P. Jewellers MD: Mr. KAMAL GUPTA

P.P. Jewellers was established in 1980 (HQ : Sadar Bazar, Delhi ).

Exports diamonds and gold jewellery to countries such as UAE (50%), UK (30%) and USA (20%).

Operational Details

Total employees - 1700.Jewellery designers -35.Total no of stores - 11 out of which two are franchisee in

Karnal and Chandigarh.Manufacturing Units located in - Delhi, Mumbai, Kolkata

and Rajkot.

P.P. Jewellers Group has following divisions:

P.P. Jewellers Pvt. Ltd.P.P. Jewellers (Exports) - A 100% Export

Oriented Unit.P.P. Jewels Pvt. Ltd. - SEZ Unit in Noida.P.P. Design Estate - A retail store of readymade

garments.P.P. Charitable Trust - A trust for the opening of

School

Rajesh Exports Pvt. Ltd (REL) MD: Mr. RS GOENKA

1990 - Rajesh Exports established  (HQ :Bangalore, India)

World's largest manufacturer of Gold Jewellery

Manufactures gold and diamond jewellery

:Retail jewellery showroom Shubah Jewellers & Laabh Jewellers.

Leading Indian branded jewellery retailer Oyzterbay in 2006

2011 - REL has launched 73 Shubh Showrooms in the state of Karnataka.

Rosy Blue MD: Mr. Russell Mehta

Established in 1982  (HQ :Bharat Diamond Bourse, Bandra Kurla Complex, Mumbai, India)

One of the largest diamond and jewelry companies in the world.

An annual turnover of about US$ 2 billion.The company has diamond factories in India, Thailand, Sri

Lanka, China, Armenia, and South Africa.As an industry leader and DTC Sightholder.

Operations cover

- Diamond trading

- Certificated diamond trading

- Diamond manufacturing

- Jewellery manufacturing

- Jewellery retailing

Shrenuj & Company Ltd. MD :Mr. SHREYAS K .JOSHI

Company was founded in 1987 in Mumbai.

Two segments : Diamonds & Jewellery.

Diamonds cutting and polishing of diamonds.Jewellery

diamond studded gold/platinum jewellery.

3500 employees.

Suasish Diamond Ltd.

Suashish is a Sightholder of DTC International.

 Incorporated in October 1988.

Brand “ Ishi’s ”.

Partnership in all major markets.

Manufactures a complete range of Round White diamonds.

Su-Raj Diamonds Ltd MD: Mr. JATIN R.MEHATHA

Incorporated in Sep 1985, is a Public Limited Company (HQ: Surat ,Gujarat)

Two segments – Diamond and Gold jewellery.

The company’s business is directed towards manufacturing and export of gold, silver & platinum jewellery studded with diamonds, colour stones and semi precious stones

The company also has its international presence in Belgium, UAE, Thailand and Europe.

The company registered revenue of Rs 3.42 bn in FY12.

Tanishq MD: Mr. CK Venkataraman

Started in 1995.

Titan Industries Ltd - promoted by TATA group.

110 stores in 78 cities

TARA JEWELS LIMITED MD: Mr. Rajeev Seth

Incorporated in Sep 1987, is a Public Limited Company (HQ: Mumbai)

The company has four manufacturing facilities, one of which is in China.

Aggregate production of 10,616.40 kgs in Fiscal 2012.Exports to Australia,Austria, Canada , China, Europe

Germany,Switzerland, South Africa, UAE,USA,UK The largest studded jewellery exporter from India since

2012.

VAIBHAV GLOBAL LIMITED

1980Launching of  Vaibhav Enterprises( HQ:Jaipur - Rajasthan).The Jewellery Channel UK is broadcasting in approx

30Million Households in UK and Liquidation Channel in approx 55 Million HH's in US.

Leading brands

MAJORPRODUCTION CENTRES IN

INDIA

42

• Total export of gems & jewellery in the year April-March,2013 was 310081.11 with a 2.76% growth rate & 23.27% share in the total export.

• Exports posted a modest growth of 1.45 per cent during 2012-13 at US$ 24.1 billion, primarily driven by gold jewellery exports, including medallions and ornaments.

• The country exported US$ 24.8 billion of gem and jewellery in 2012-13.

EXPORTS

The United Arab Emirates (UAE) was the largest importer of gems and jewellery from India in 2012-13, with a share of 33% followed by Hong-Kong(25%) and U.S.A(19%).

The sector accounted for 13 per cent of India’s total merchandise exports.

The export industry mainly comprises of small-to-large units based in various special economic zones (SEZs) supplying primarily diamond-studded jewellery.

continue

EXPORTS DATAITEMS 2009 2010 2011 2012 2013(APR)

CUT & POLISHED DIAMOND

53892.02 48905.57 57117.17 58649.45 45365.09

GOLD JEWELLERY

16498.21 22567.44 11637.12 9406.49 5572.37

COLOURED GEMSTONES

975.07 1062.27 1111.05 1197.55 834.80

ROUGH DIAMONDS

1865.49 2388.26 2280.32 3474.93 1992.95

VALUE IN CRORES

TO CHINA

•ROSY BLUE•TANYA GEMS•VENUS JEWELS

TO U.S.A•DVL JEWELS PVT. LTD.•ELEGANT COLLECTION•DIATRENDS JEWELLERY PVT. LTD.

TO ITALY•DWARKA•GEMS JEWELS IN INDIA•TAKAT GEMS IN INDIA•FINE JEWELLERY

MAJOR EXPORTERS IN INDIA

48

Major Exporters in India

RAGHUNANDAN PRASAD & SONS S. ZAVERI & SONS JEWELLERS JAGDISH & SONS RIBY GEMS AND FASHION JEWELRY BN GHOSH & CO. MARUTI JEWELLERS MILLENIUM STAR SILVER STONE SHRI RADHEY CHAIN DD JEWELLERS

IMPORTSTotal imports by India declined by 13.46% y-o-y to U.S

$35.37 bn during June 2012 compared to total imports of U.S $40.87 bn in June 2011.

India’s import of gems and jewellery increased by 45.39% in Fiscal 2012 to U.S $ 41.93 bn from U.S $ 28.84 bn in Fiscal 2011.

The total imports of gems and jewellery sector grew at a CAGR of 27.74% for the period Fiscal 2003 to Fiscal 2012.

The imports of rough diamonds has increased by 31.82%, gold bars registered a 10.78% increase and cut and polished diamonds increased by 78.94%.

ITEMS 2009 2010 2011 2012 2013(APR)

ROUGH DIAMONDS 40039.14 38401.09 40170.65 40877.24 21898.13

GOLD BAR 7034.52 7905.74 9734.41 10820.32 6062.77

CUT & POLISHED DIAMONDS

16010.27 8832.61 17396.61 31209.45 27056.46

IMPORT DATA

Rs. In CRORES

51

Major Importers

• LEVIN HEALTH CARE• SUNSHINE CONSULTANCY SERVICES• KRISHNAM• HI INTERNATIONAL• SHREEJI GEMS & SILVERS• FAMMORE ENTERPRISES.PVT.LTD• SHIBINS• SARIT AXPORTS CONSORTIUM• SANJAY EXPORTS• MONTOSTONE

GOLD JEWELLERY ITALY ,CHINA ,THAILAND ,HONG

KONG ,FRANCE ,MEXICO, TURKEY ,CANADA ,ISRAEL, SWITZERLAND ,UNITED KINGDOM

DIAMONDCHINA , BELGIUM

GEM STONESSRILANKA,THAILAND

Major Competitors in the global market

The Current Economic ConditionGems & Jewellery

India’s Current Advantage

Ability to deliver good quality at low costs

Cost of cutting diamonds in India is 7% of that in Belgium and 60% of that in China

The exports are expected to grow at CAGR of 15%, amounting to USD 58 billion by 2015 from current size of USD 25 billion

010203040506070

25

58

Gems & Jewellery Exports (USD billion)

2009 2015

Raw Materials

Processed Raw Material- Low Value

Processed Raw Material –High Value

Mass Jewellery

Designer Jewellery

Branded Jewellery

India’s Current Dominant Position

Gems & Jewellery Value Addition Ladder

Opportunities

Gems & Jewellery

The Current Economic Condition1. G & J Industry forms an integral part of the Indian economy

with an annual growth rate of approximately 15%. It accounts for 14% of the country's total exports and provides employment to 1.5 mn people directly and indirectly.

2. Besides being the largest consumer of gold 23% of global consumption producer of polished diamonds 57% by value of the global market .

3. The export revenue for 2011-12 was US$ 42.84 bn, with cut & polished diamonds contributing US$ 23.33 bn and jewellery US$ 9.50 bn.

4. In 2015 India and China will capture about a quarter of the global luxury market given economic growth in these two countries.

5. In terms of geographical markets, the UAE continues to be the largest exporting destination with 44% of exports to the market, followed by Hong Kong with 25% and the US with 12% India with 12% and China with 11% share respectively.

6. The domestic jewellery market is set to cross US$ 40 bn by 2015.

7. Diamond jewellery segment looks very promising and is expected to touch US$ 6.41 bn in 2012.

8. The last few years with growth rates in the range of 20 – 30% .

continue

What’s New………..

KOLKATA, MARCH 17: The All-India Gems and Jewellery Trade Federation (GJF) has gone

on a three-day strike starting Saturday to protest against the Budget proposals announced on Friday.

Close to three lakh jewellers under the trade federation have joined the strike, shutting all jewellery establishments during March 17-19.

The Union Finance Minister, Mr Pranab Mukherjee, has proposed to bring unbranded precious jewellery under the excise duty net and raise customs duty on gold bars and coins.

There is also a proposal to increase import duty on gold from two per cent to four per cent.

This apart, the Government has also proposed to levy one per cent tax for cash purchase of jewellery worth more than Rs 2 lakh.

NEWS

CONCLUSIONS

- This is a favorable industry:

Can take advantage of market trends

History proves that jewelry is long-lasting

Highly volatile market, highly attractive

Will overcome the economic crisis

 Fast progress in the global jewellery market.

REFERENCES Care Research-Indian Gems and Jewellery

Industry,2011 Daily newspapers www.indiabulls.com www.myiris.com www.moneycontrol.comhttp://commerce.nic.in/ftpa/default.asphttp://www.ibef.org/download/

GemsandJewellery_sectoral

http://www.commodityonline.com/learning_sub.php?id=32

Thank

You!!!

1. Compounded Annual Growth Rate (CAGR)

2. The International Monetary Fund’s (“IMF”)

sethupm@aol.in

sethu@hotmail.com

sethupm@live.com

sethupm@ymail.com