“The diamond industry fundamentals are robust and demand for diamond jewellery in India is on the rise”
Kiran Gems Pvt. Ltd. (established in 1985) is one of India’s premier diamantaires with an international reach and reputation. As the world’s largest manufacturer of natural diamonds, the company stresses on producing diamonds of world-class quality in a wide range of shapes and sizes. With 182 specialised and dedicated manufacturing units spanning over 2 Million sq ft, it creates largest employment opportunity in the Indian Diamond Industry. That’s not all. The company has won numerous awards from GJEPC, FIEO, JNA and other organisations, including the ‘Highest Exporter of Cut and Polished Diamonds’ award for nine consecutive years and was declared as the ‘Best Growing Company of the year’ in 2016 by the GJEPC. Floroscent gets in touch with Mr. Dinesh Lakhani, Director, Kiran Gems, to know his views on the current state of the diamond industry, profitability in the business and upcoming opportunities.
How was the response at the recently concluded IIJS 2017 in Mumbai and how would you describe the India diamond industry currently?
The response at the IIJS 2017 was tremendous and was beyond our expectation. There were many inquiries in loose stones.
Generally, if you see the trend, if jewellery does well, automatically loose stones demand goes up. With the changing trends in the Indian Retail Industry, chain stores are almost controlling 25 to 30 percent of the market share. And all these chain stores promote diamond jewellery very well and therefore the demand of it is going upwards only. The exceptional response that the jewellery segment has received will eventually reflect on loose stones as well.
After demonetisation and GST, Indian economy is sure to grow. The organised businesses will reap the benefits of these reforms. The diamond industry fundamentals are robust and demand for diamond jewellery in India is on the rise.
Which quality and size of diamonds are in demand in today’s market?
If you ask me category-wise, light-weight diamond jewellery is doing really well in India. Minus 2 and stars size will further boost the demand that is what the current trend suggests. Solitaire is an altogether different segment. It does not eat into the market of jewellery in this particular segment. The demand thus will not be hampered.
Which are the key international diamond markets and the new emerging markets?
At present, markets for loose diamonds are the US, China, Middle East and India. In these markets, loose diamonds are still doing well. The large US market has been remarkably resilient and continues to be the cornerstone of the diamond business. In India, the market will grow as usual post Diwali, despite demonetisation and GST. China and Europe are stable markets for now. Talking about new markets, Brazil and Japan, which were down for some time have picked up recently. The industry is counting on these two markets in the coming time.
Recently, the Diamond Producers Association (DPA) has launched a generic diamond promotion campaign for India. The De Beers Group has also increased its marketing spend to US$ 140 million. According to you, what is the significance of such investments for the industry?
Diamonds were not marketed like this ever before. But definitely there was a need to do it. I am glad that the DPA has done a campaign that is actively participated by the gems and jewellery industry. I hope more and more retailers and manufacturers come forward to support the campaign. Such diamond awareness programs that generate demand will further increase diamond sales. Still, there is a lot of scope in the market. In India Diamonds have reached to a small portion of population, but if it reaches to the larger population of our Country then the growth would be tremendous.
What is your assessment of the present state of the diamond industry?
Manufacturers, who deal in loose diamonds, were going through a rough phase in terms of profit. But the trend looks to be positive in the long run. Once the price stability is achieved, manufacturers will have scope to generate profit.
How the industry can sustain profitability amidst potential price volatility of rough and polished diamonds?
If you talk about product to product, then 15 to 20 per cent products do not match the demand-supply curve. So, if more than 60 per cent goods match it, profit can be achieved. For the remaining 35 to 40 per cent that fall short, they too become viable considering a correction in the price. There is variation in the prices of polished diamonds but it is product to product. A product may cost more in one area while in another area it may be lesser. But on an average, the prices are more or less in control. Thus, there is a balance in the cost.
Innovation is the buzzword in today’s competitive market. How’s Kiran Gems keeping up to it?
Kiran Gems is updated time to time. Some or the other innovations are always on. Whether you talk about jewellery, loose diamonds, cutting and polishing or marketing, we have always been and will continue to be ahead of the market. Our innovation team works in line with this thought. Since a long time, innovations have been part of routine.