| What is the synergy in acquiring a distribution company in the US? |
| Shrenuj has a large jewellery manufacturing base which is being scaled up with the addition of a new factory in SEEPZ. Our strategy for the US market is to reach the end-user through retailers. This will ensure rapid growth with minimal risk. We felt the need for an established and effective distribution platform, hence the acquisition. |
| What is the future of diamond polishing business in India? |
| The prices of cut and polished diamonds have been steadily rising at the rate of 5-7 per cent. In 2003, it went up by 15 per cent. The uptrend noticed since 2003 showed signs of softening last year. This year again, the prices are expected to strengthen on the back of falling world production of rough and rising demand for polished. Export of polished diamond will show signs of improvement in the current year. |
| But many small cutting and polishing units are facing problems? |
| Yes, because the business is shifting to organised players. During the last five years, I have been witnessing signs of consolidation in the cutting and polishing business. As many as 30 per cent of the smaller units are closing or merging with bigger ones. Top 100 units now account for about 70 per cent of the polishing business against 200 units three years ago. |
| Organised sector is heavily investing in technology and skill up-gradation, and the industry is turning techno-centric to achieve better yields. |
| Is the appreciating rupee hurting growth? |
| In diamond/jewellery industry, exports account for more than 80 per cent of revenues and billings are done in US dollars for both exports of finished products and import of raw material. Thus, there is a natural hedge. Further, large and organised players have an active treasury employing efficient hedging mechanisms that has minimised the impact of any currency fluctuations. |
| How do you see the growth of diamond jewellery business in India? |
| A recent study has projected the domestic market for both plain and studded jewellery to rise from $13 billion in 2006 to $18 billion by 2010, and $28 billion by 2015. Of this, diamond jewellery is expected to see a rise of almost 70 per cent from its current modest sales of about $2 billion. The industry is definitely in for some interesting times ahead. |
| Do you think that branding has played a key role in driving up jewellery sales? |
| Branding has been really at the heart of India's retail revolution in jewellery. It has put the entire jewellery segment on a higher pedestal. Though diamond jewellery constitute a small part of the segment, I can definitely see it growing rapidly with large investment in brands and retail outlets. |
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