Mumbai's largest jewellery destination launched by Tanishq

Tanishq salutes the larger than life spirit of Mumbai with a one-stop-shop jewellery boutique

Post By : IJ News Service On 02 May 2011 4:21 PM
Mark A. Boston, Chairman, H.Goldie & Co. Ltd., London (U.K.) has been known for over four decades now to the diamond trade and industry, not only as the Diamond Trading Company’s (DTC) reputed broker, but also as a friend, philosopher and guide to some leading diamond businessmen whom he introduced to the DTC; led them through the intricacies of this business and helped them in establishing themselves as successful diamantaires. %% To many others also, he has been an unfailing friend with overflowing warmth. He has been a frequent visitor to India which has almost been his second home. Endowed with commendable analytical aptitude, he is known for his indepth study of the trends not only of diamond industry and trade in India but also all over the world. In an Exclusive Interview with the Diamond World he turns his spotlight on various issues of this sparkling business. Excerpts :
Setback in 2006-07 :
{{Diamond World :}} According to provisional statistics available now, shipments of cut and polished diamonds from India in 2006, compared with the earlier year, fell by 11.83 per cent in value-terms and by 17.11 per cent in caratage. What, in your opinion could be the reasons for this set back ? Mark Boston : The reason for the reduced outflow from India in 2006 seems be that requirement of polished goods was satisfied by goods already held in stocks. When we entered 2006, mounting stocks and slow-moving polished were the main issues which confronted the trade as this impacted so much on profitability and liquidity issues.
Selective Participation in Trade Shows :
{{Diamond World :}} There has been tame response to some jewellery shows held in the first quarter of 2007. What does this indicate ?$$ {{Mark Boston :}} There are always mixed views on international jewellery shows whether they are the major international shows or the regional events. Clients seem to have learned that attending the shows is not only very expensive but not always very productive. I think you will find that now most clients have an allegiance to a particular show which serves their purpose in terms of focusing on the right clientele for their products and services. There is very little point in attending a show, unless you have the local representation and services to follow up on contracts made. We notice that there seem to be less Indian companies exhibiting in BaselWorld this year as many find the expenses rather outweigh the gains. However, those companies that retain their long-term commitment to developing their European business in many cases feel it is still worthwhile. There is no doubt that BaselWorld, Las Vegas and the Hong Kong shows remain the mega events which stimulate enormous excitement and activity. %% {{Diamond World :}} The diamond industry’s bank debt seems to have risen steeply from the level of about US$ 11 billion where it was estimated to stand at the end of 2005. How do you view this situation ?
Debt Monitoring Essential :
{{Mark Boston :}} I am not in a position to give any statistics on the diamond industry’s bank debts, but there is no doubt that the bankers need to continue to monitor their clients’ business closely from every point of view and that responsibility really has to fall on their shoulders squarely. There are wide concerns about some of the banking issues in relation to ‘Best Practice Principles’ and DTC Sightholder status. And I think there is a new willingness for these issues to be addressed by banks, clients and the DTC. I think that when we talk about Best Practice Principles, it has to apply across all aspects of a major company’s business, because respect for any individual company must be earned and poor ethical behaviour and concealment of issues by individual companies devalues the very real progress that has been made in protecting the industry’s reputation. %% I think, bankers while they remain vigilant about the level of indebtedness are less concerned than they had been previously, now that the Indian industry seems to have regained its confidence and trading profitability has improved.
De Beers in Global Perspective :
{{Diamond World :}} What is De Beers’ share in global diamond production and their share in global diamond business ? What are the prospects for these ?$$ Mark Boston : I would not like to speak for De Beers on their global share or the prospects for the future, but recently I have heard that their share is not more than 40 per cent, a significant reduction on what it used to be and one that presents very real supply concerns, not only for De Beers, but also for its Sightholder clients who continue to develop their business very well on the basis of their relationship with the DTC. It is natural for them to expect a growth oriented relationship and rely on the DTC to deliver in terms of its own core strengths; in relation to both supply and distribution. %% There is a good deal of uncertainty about the extent to which the Indian industry can still rely on the dependability of African producers in maintaining supply levels. There is no doubt India has been the main locomotive of growth to the global diamond industry and has under-written the producers’ expansion during the last 20 years. The question is to what extent the African producers continue to recognize the importance of a relationship which has been very successful for all concerned. It is hoped that the Canadian production will ease the supply problems to some extent. %% {{Diamond World :}} Though efforts are being made to address various concerns of Sightholders, some concerns still remain. How do you view the situation ?$$ {{Mark Boston :}} The Sightholders’ concerns have tended to be focused on supply, as explained earlier, particularly in relation to distribution and delivery of rough appropriate to their own core skills. All clients realize that there are different models, all of which require specialized skills in both manufacturing and marketing. What is important to them is that their own particular model is properly understood and correctly evaluated so that they can secure the rough they require. %% It is hoped that most of the major concerns about the previous contract will be addressed in the next contract period and we have been encouraged by the DTC’s willingness to engage in consultation with Sightholders and brokers to ensure that the same sort of mistakes are not repeated. I expect a good relationship between clients, brokers and DTC can go a long way in facilitating effective dialogue and understanding.
Profitability Squeeze :
{{Diamond World :}}What do you think about the squeeze on the industry’s profitability ?$$ {{Mark Boston :}} Profitability was a major and serious concern last year and it did definitely impact all aspects of the industry. And fortunately the industry self-regulated itself out of a potentially very dangerous situation. While profitability has improved, it should certainly not be taken for granted that it is no longer an issue and future plans have to be based on sustainable level of profitability and the producers need to recognize the responsibility they owe to their clients in delivering this.
India & China on Fast Track :
{{Diamond World :}} What are your views regarding the role of India and China in the jewellery industry growth?$$ {{Mark Boston :}} There is no doubt that China and India will continue to become enormously important markets for our industry. Both the markets have profound appreciation of diamond jewellery adornment and their wealth grows their proportion of the diamond jewellery market is to become more and more significant. It is also fair to say that both markets have enormously creative jewellery industries and retail jewellers who continue to develop the jewellery products that appeal to their own markets, as well the international markets. Credit should also be given to DTC who have raised awareness of diamond jewellery in all markets but have been particularly successful in India and China in raising the profile of diamond jewellery not only for the elites but also for the emergent middle class in both the countries. %% {{Diamond World :}} What has been the impact of the thrust to promote branded jewellery ?$$ {{Mark Boston :}} Branding is a word that has been rather loosely overused in the recent years and anyone who has experience of it knows that it is very challenging a long-term commitment. Retailing is very different from manufacturing and generally requires a different set of skills. That does not mean that a manufacturer cannot be successful in retailing, but they have got to take a very long-term view, if they are going to be successful. Unfortunately the view that branding was all about marketing spend was rather encouraged by the SoC evaluation process and encouraged a lot of hype, rather than sober and considered investments in genuinely compatible venture. I think that it is now recognized that every client should be free to develop the model that is appropriate to their business and differentiate it in a meaningful way from their competitors. This has to be a much more healthy basis for developing our industry in the future in a sustainable and sensible way.

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