Suashish plans jewellery unit in China

Suashish Diamonds Ltd, a DTC and Rio Tinto siteholder, is planning to set up a diamond jewellery manufacturing unit in China for an investment of $10 million.

"The plan is afoot but not final. Therefore, it is premature to talk about the actual location in China and the investment amount. But, we would surely set up a plant in China by the end of this year at an initial investment of $5-10 million," said Ashish Goenka, managing director, Suashish Diamonds.

Once the plant is in place, we would import roughs directly to China from our De Beers and Rio Tinto sites, he added. But, he did not rule out imports of roughs through India as well.

To cash in on the booming retail business, Suashish is planning to expand the existing point of sales (PoS) to 200 from 120 now in tier I and tier II cities in India by mid-2008.

"Understanding consumers' demand with existence in the local area is more fruitful than increasing the number of PoS blindly. India being the diverse cultural, ethical and mythological country, the taste, profile and purpose of each jewellery consumer is very important to understand and then delivery them the desired jewellery items at most possible economical price," said Goenka.

Suashish diamonds are available at all malls and multiplexes in India and as a pan-Indian company, it is planning to take up space in every possible big retail chains across the country.

The company has also successfully ventured into the growing Dubai and Saudi Arabian markets where it sees the future growth.

In the US, Suashish sells jewellery through malls and multiplexes under its corporate customers' brand name. Presently, 10 per cent of the company's turnover is contributed by overseas business while 90 per cent comes from domestic sales.

On China's selection, Goenka said that Chinese workers were more disciplined, efficient and dedicated towards work when compared to their Indian counterparts.

Workers' commitment and devotion to their work is exemplary in China which are absent in Indian workers, he added.

The price of the end products in China, according to Goenka, is comparable to that in India. Hence, setting up a manufacturing base in China makes better sense, said Goenka. The impact over uncertainty on the generalised system of preference (GSP) is likely to take its toll now as the new contracts are under threat.

The $4 billion exports to the US is awaiting a clear indication from the US for GSP which is expiring on June 30. As the deadline is only few weeks away, new contracts are under severe threat from the US, he added.

On the impact of the rupee's appreciation on diamond business, Goenka said, "Some banks have been badly hit by the dollar's depreciation in America."

Now, Indian banks should be watchful while extending credit to industry players, he added.