Lakhi Group's new office at Bharat Diamond Bourse inaugurated

Varda Shine, as Chief Guest together with colleagues from De Beers Group and the Diamond Trading Company (DTC), inaugurated the Lakhi Group's new 6,000 sq.ft. state-of-the-art office in India's new Bharat Diamond Bourse at the Bandra Kurla Complex.

Post By : IJ News Service On 13 April 2011 10:49 AM
"Our focus is on diamond manufacturing and distribution and that is where our strength lies. Our people are our assets and customer satisfaction has been the guiding principle behind all that we have achieved. We have always believed in striving for the best and it is this attitude that has helped us reach the point at which we stand today." So says {{Rajiv Mehta}}, CEO, {{Dimexon Diamonds Ltd}}, one of the leading diamond manufacturers in the world, for almost four decades now. Dimexon has a global presence, including offices in Belgium, China, Hong Kong, India, Italy, the UAE and the USA, and state-of-the-art manufacturing facilities in India and China. Dimexon joined the club of advertisers only this year, altering its strategy to make its mark in the global market. %% {{Rajiv Mehta}} reveals the company's future plans and strategies in an {{exclusive interview}} with {{Mohana Ravindranath}}. Excerpts:%% {{Future-Ready of Dimexon:}} Since its inception in 1966, Dimexon's strategy regarding advertising had been to maintain a low profile. With changing times and the focus on branding emerging in the industry, we made a strategic decision to concentrate not only on our products but also on our corporate identity. The aim was to give the customer not only an integrated product but also the right partner to deal with. Our new logo gives a clear message - Dimexon is all about 'Tomorrow, Today'. It is 'about being future-ready in one's processes and one's products and being able to give the customer what he wants, ahead of the pack'. That is what we have accepted as our brand logo, our brand icon, which is being communicated all over the world through our 'Senses' Campaign.
Purposeful Advertising:
We are a modest set of people but are a company that is quite forward-looking in thoughts and outlook. Our advertising is bound to our business purpose which aims to meet and exceed the expectations of all our stake holders. %% {{Problems Likely to be Faced by the Gems and Jewellery Industry?}} %% On a global basis, responsible consolidation holds the key to ensuring that all parts of the value chain remain profitable and sustainable. The second challenge is compliance - which includes adopting statutory laws and best practice principles, much like the DTC Sightholders are doing today. However, this forms just a small fraction. The compliance process needs to be extended either by the supplier or the retailer or by companies themselves by understanding the ever-changing social and statutory laws.
Integration Challenging:
The integration of processes from manufacturing to retail is going to pose a challenge for many. At the same time, we would need to retain margins - only possible through the integration of the supply chain between the retailer and the manufacturer. In reality it will be the proper distribution of margins from mining to retail that will sustain all the players within the industry. %% In addition, one of the things that the industry will have to face is the increasing level of standards %% (a) in terms of compliance; and, $$ (b) in terms of consumer confidence in diamond marking and branding.
Dimexon Conforming to Many Marks:
We have the 'Forever mark' of the DTC, we have the Canada mark promoted by BHP and a whole host of other marks which have been implemented by other diamond countries or mining companies; are in the pipeline. This is important from the viewpoint of the consumer, since he then knows that he is purchasing a diamond that has come from a compliant and non-conflict area of the world. Looking at the importance of this factor, ultimately, the industry may need, either from the supply end or retail end, to look towards adopting a single standard.
Shortage of Rough Diamonds, Rising Prices…:
Looking at the macro perspective, there are pieces of data which reveal that, over a period of time, while demand for polished diamonds and retail jewellery has increased, primarily through various marketing initiatives, mining and exploration has not kept pace with industry changes. That is one of the reasons why rough diamond prices have been extremely volatile and have been showing an upward trend. %% At the end of the day, supply and demand need to meet up and this is governed by several factors. So whether it's about mature economies being able to sustain their growth level or emerging markets being able to sustain their aggressive growth path, addressing the sourcing part of the industry is what will give us a consistent growth. On the production front, no new mines have been discovered in the last couple of years. There are no new kimberlite pipes. With the current levels of supply coming out from South Africa, Russia and Canada, one can only see marginal increases in efficiency. Then again there is the question of the {{Argyle}} and the {{Rio Tinto}} production which is set to have a large effect on pieces and carats that are coming out in the market. In terms of value, though efficiency is improving, there is no large production increase; therefore, in terms of pieces and carats we are going to see a decline.
Maintaining Equilibrium:
One of the focus areas in the business plan is ensuring that we live up to the sourcing objectives. On the sourcing front, we are looking to move up the value chain in terms of products and quality. We already manufacture a diverse range of products - from the cheapest rough material to high-end 3 carat rough diamonds. Our units have been designed to accept flexible rough inputs, and this has expanded our usage and capacity utilization. These are the areas that will help deal effectively with the changes and volatilities in market conditions. In addition, we are also actively looking at increasing our supplier base and for this we are constantly in touch with mining companies and governments all around the world.
Shrinking Margin:
Rough diamond prices have increased but polished prices have not been able to keep pace. This has created a vacuum, an erosion of margins for manufacturers while traders or dealers, who have a much shorter pipeline, have not been exposed much to the risks or the inflation / deflation of inventories.%% Being in the manufacturing trade, one cannot have a short-term perspective but needs to look at growth over a period of time, which could be six months, a year or even two. The gap between the rough and polished prices has been shrinking in the last year, but we see a marginal correction on the rough coming up and continuing in the future.
Balance Vital:
There is a constant fight between available capacity that needs to be fed and the value contributor that needs to be maintained on the bottom-line front and this balance will have to be kept. It is probably in the secondary market people who do not have primary source which are largely affected in their margins and that is what has happened this year.
India, China, Africa Re-Defining Terms of Trade:
India is turning out to be a large consumer power in terms of the diamond jewellery industry in the retail front with a growth rate of over 20% in the last few years. China is also a major retail market, with a growth rate above 10-13%. Both these countries are large and economically beneficial manufacturing bases for companies to be in and manufacturers are therefore, strengthening all of this with statutory requirements and compliances. Retailers around the world want to do business with competitive countries and companies that adhere to global legislation, and this is what India and China are concentrating on, thus redefining trade. Previously, Belgium and Japan had the strength to influence demand and supply. Today, it is the turn of these Asian countries, backed by their fast growing economies that are either affecting the demand side of the diamond industry or the consumption of raw material from the supply side.
Huge Indian Retail Front
India has the retail consuming power and the ability to churn out products at the most competitive prices on a global basis. The only thing that it would have to work on is two areas - Firstly, the government will have to ensure that proper education systems are established so that new people come out with a high level of academic qualification. Secondly, it needs to be understood that investments in infrastructure will not only boost the growth of the diamond industry but will also positively influence the overall GDP growth of the country, as well as maintain the growth into the next decade or two.
Cutting & Polishing Division in China:
It's not India versus China but the synergy in the complementing status of both these countries. I do not think there is a reason why one should always look at this situation from a competitive point of view. One, if you are in business you should look at how it is contributing towards the bottom line. Two, how it is implementing the world's best practices and processes and finally how it helps you diversify. That is why we recognize both these countries as efficient and capable manufacturing and retail consuming basis and have decided to invest our resources in these two countries.
Dubai Could be an Impending Threat:
There have been stories that Dubai is going to take away Antwerp's position in the diamond industry. Whether these statements are true or false, they give us an idea about the city. Dubai itself has many positives - for a company wanting to do business in the Gulf, it's a key hub and the infrastructure is extremely suitable for all sorts of people. Other than the obvious, i.e. its compliant tax status, its geographical proximity is a key factor since it is centrally located between India and Belgium.
Flexing Muscles:
At Dimexon, we constantly evaluate our markets and see what part of the value chain we can capture by being in those markets. We have expansion plans both in terms of retail and in terms of jewellery manufacturing respectively in India and China. China's competitive edge lies in manufacturing the better end of the value chain, whilst India's lies in the large bulk of the entire commercial end of the value chain. These are the areas where we will look for synergy, which will help us continue to meet our goals.

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