Surat diamond biz overcomes deluge blues

As normalcy returns to Surat after the deluge, diamond polishing units, which virtually had no workers left, are slowly limping back to business.

Diamond manufacturers claim that over 60 per cent of their labourers are back and expect a further 15 per cent to be back by the end of the month. Some polishing units have started functioning as before and are even planning to ramp up their unit capacities.

One of them is Mumbai-based Classic Diamonds India (CDI), which plans to diversify its operations by foraying into the big size and fancy categories of diamonds. The company plans to expand its present 2,25,000 sq ft diamond polishing unit in Surat and later at Ahmedabad.

The firm has a production capacity of 2 million stones a month and plans to expand its current facility by at least 15 per cent to foray into polishing of marquee, princess cut and baguette diamonds.

The infrastructure, raw material and labour expansion will require an initial investment of Rs 60 crore. The firm is in the process of acquiring necessary machinery from four companies abroad and hopes to start operations in the next six months.

"We are functioning at 50 per cent normal capacity but expect the number of workers to go up in the coming few weeks, which is why we have gone ahead with our expansion plans," Divesh Shah, finance executive, CDI told Business Standard.

The bigger diamonds market, according to Shah has been picking up like never before and this is especially the case with international markets, where considerable margin hikes are being offered to local diamond traders.

Notwithstanding the losses on account of the recent deluge, an increasing number of diamond traders are on the verge of importing bigger diamond polishing equipment to tap the export markets, he added.

CDI has a small unit in Ahmedabad, which is expected to be upgraded along with the Surat unit to include the larger varieties of diamonds.

Currently, around 70-75 per cent of the revenue comes from exports to US, Belgium, Isreal and China. The turnover of the company is Rs 625 crore.

By foraying into the big size diamonds, revenues are expected to grow by 10 per cent within the next quarter itself.