Micro Economics for Managers

MBA-Capital Markets
(2007-08)

Gems and Jewellery Industry

Su-Raj Diamonds & Jewellery Limited

Presented by:

Ashish Kumar Jain (11) Mehul Jain

(12)
Anthony Abhishek Joseph (14) Satish Kachhawa
(15)
 Introduction and Outlook
Accounted for 13.7%
 Constitutes: of the total Indian
exports
 Diamonds
 Jewellery Values of Exports ( $bn)

 Gems and Pearls 18 15.5

16.9*

16 13.4
 International GJ market 14
12
10.7

estimated ~ $85bn 10
8

 Indian market value 6

4
2
~ $13bn  15% 0
2003-04 2004-05 2005-06 2006-07

 Gold forms 80% of

Indian GJ market
 Estimation of Diamond Export
Current Scenarios Potential Trends
 Lead position in  Expansion in processing

diamond processing of High quality

 96% Market in diamonds
unorganized Hands  Consolidation of

 High Labor Cost Organization Sector

 High investment  Promotional Activities

projects coming up by Indian Govt.

Company Under Scan:

Su-Raj Diamonds & Jewellery Ltd.

Core Business
 Manufacture and export

 Of Gold, Silver and Platinum

jewellery
 Of Polished Diamonds

Infrastructure
 Firm has five dedicated

jewellery divisions and two

diamond divisions
strategically located in India
Firm’s Global Reach
 Market Structure of the Firm
Diamonds Gold, Silver and Platinum
 Four state of the Art  Team of 100 professionals,

factories churns out 700 designs per

 Manufacture diamonds of month
range 0.005 carats to 3  All company products are

carats hallmarked ensuring quality

 Diamond business  Revenue generated from this

constitutes 46% of the total part is around 54% of the

 Major portion of the total
Diamond production is
exported
 Competitive Position
Doesn’t Have
 Does not have a recognized
brand in the market place as
of now (like Gili of
Getanjali)
 Does not have a well
established retail chain to
sell directly to the
consumers (like Tanishq)
 Does not have facilities to
process high quality
diamonds (like Rajesh
Exports)
Does Have
 Does have access to high
technology and thus cost
advantage.
 Does have reach in the
international market though
wholesalers as in New York,
Belgium, Antwerp, Middle
East and China
 Keeps the jewellery designs
updated as demanded in the
international market (apart
from the traditional
jewellery)
 Potential Risks
 Emergence of China, Sri Lanka and Thailand’s
entry in small diamond segment
 Fluctuations in Currency Rates
 Infrastructure bottlenecks, absence of
technology
 Consumers prefer Bank products to
Gold/Silver jewellery for investment purpose
 Low availability of skilled labor
 Recent Strategies
 Established six wholly owned subsidiaries to
cater to overseas and domestic market
 The firm has set up an exclusive factory outlet
in Bangalore
 Planning to manufacture handicraft jewellery
along with branded to cater to diverse market
 Expanding B2B business by increasing its
retail clients such as Tanishq, Khazana,
Alukkas etc.
 Demand Forecast for Diamond
Exports
• Regression model Export Projections

70,000.0
• Variables affecting the 60,000.0

demand 50,000.0

Export Value in Rs mn
40,000.0
• Import of rough diamonds 30,000.0

• Export price 20,000.0

10,000.0
• Currency Rate 0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Actual Exports Estimate 1 Estimate 2 Estimate 3

Y = 4396 + 0.27415 * X1 + 249.98796 * X2 - 570.66153 * X3

 Recommendations
 Introduce a Jewellery or Diamond Brand
 Increase presence in the retail segment
 Tap the opportunities with the Retail biggies
 Explore new markets in Middle East
 Invest in Technology
 Invest in labor’s training and skill
enhancement programs.
Thank You