Polished prices rise due to reduced diamond supply

The RapNet Diamond Index (RAPI™) for 1-carat polished diamonds rose 1.9% during the month, buoyed by improving investment demand and scarcity of D, IF diamonds, says a press release from Rapaport.

Today

GIA begins first Graduate Diamond Course in Shenzhen, China

GIA (Gemological Institute of America) conducted first regional on-campus Graduate Diamonds Course in early July, which was attended by aspiring gem and jewelry professionals in Shenzhen, China, says a press release from the Institute.

Today

Artic Star takes over management of the Diagras property

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Today

DMCC invites diamond companies to set up operations in Dubai

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Today

Diamond production in Surat begins in a phased manner

Diamond cutting units in Surat have been allowed greater flexibility to operate from 31 July Saturday on condition that they will adhere to a set of norms that include mandatory Covid-19 tests for traders and staff, as per media reports.

Yesterday

Empowering customers and engaging more with our stakeholders is the new Mission

23 december 2019

govindbhai_dholakia_xx.pngThe unassuming Govindbhai Laljibhai Dholakia, Chairman, Shree Ramkrishna Exports Pvt Ltd (SRK) is not just an ace businessman but a noted philanthropist. He has contributed immensely to social welfare with special focus on education … a noteworthy step especially when he is a school dropout.

A legend in his own right, Govindbhai Dholakia is a self-made man. He has built the company SRK from scratch to one of the current leading players in the Indian diamond industry.

Here, in an interview with Rough&Polished, Govindbhai Dholakia comes across as an astute businessman, airing his views on all things business, but with an adequate dose of philosophy.

Some excerpts…

Since Rough&Polished featured you 5 years ago, what new developments/changes have taken place at Sree Ramakrishna Exports (SRK) as well as your jewellery unit? Please update, for the benefit of our readers.

We believe in the theory of – “Change is the only constant thing.” We allow every member in our organization to challenge every process that’s existing for making changes, altering the process for betterment. Thus, nothing remains the same for 5 years. I have seen more changes during the last year than I have experienced in the last decade. Business is constantly growing, and it crossed USD$1 billion in sales and in exports too.

To expand our business, we have increased our infrastructure by doubling our capacity by launching a new high-tech factory in Surat. And to compliment that, we also moved to a bigger sales office in Mumbai BDB. We are investing more and more in diamond business because more members of my Family’s Next Generation are joining the business. I am happy that all the youngsters in the family are willing to join the business and thus it gives us confidence.

Our next-generation completely rebranded the company into a new 21st-century look with changes in the approach towards our customers. We don’t push information, now we give knowledge and empower customers with enough knowledge to decide on their own. Empowering customers and engaging more with our stakeholders in our new Mission. With this mantra, we launched FootPrints, our Diamond traceability program which will give Diamond origin and also in future, we will be able to give more information with 100% track to our customers.

We are also rewarding customers who buy high-value items with FootPrints Video which shows great stories of Mining, Diamond crafting and diamond journey. We started SRK Knowledge Foundation (SRKKF) as our Charity umbrella to formalize my keen interest to offer support to those in need and we envision to set up a World Class Knowledge Institute where Knowledge will be generated and then shared with the world.

How is SRK faring in this scenario where cutting and polishing centres have reduced manufacturing down by 25% to 30% compared to a year ago? Is SRK in full production, and what measures are you taking to keep the SRK facility running as usual?

The whole Industry is under turbulent times and we are not different from the Industry. Of course, our production has also gone down but it’s marginal. We always believe in Self Introspection. Even when its great market, we don’t focus on others growth and even in such difficult times, we don’t focus on others cries. We strictly always focus on our own business, especially in such times. This was of thinking practically has given us good results both during the 2008 recession as well as this one.

We believe in Family values, we don’t hire employees, we add a family member and we truly believe in this culture. 2008 was testing time and our company didn’t lay-off a single person in that difficult situation which resulted in a great year-end for us. Business Opportunities even then were multi-fold. We just had to grab it, we were prepared and ready with 100% capacity and thus we could be successful. God is with us and he gave us this wisdom even in difficult times and thus we grew 100% during 2008-2009.

Is SRK solely into exports or do you cater to the domestic market as well? In any case, what do you foresee in the growth of the Indian domestic market? Will restructuring the tax systems for imports and facilitating the smooth running of business help the domestic industry?

Post Demonetization and with Implementation of Goods & Services Act (GST), for us Domestic Market business has grown significantly because we always adhere to Best Practices. It is expected that the local market will get some boost as all other industries locally get in good shape. Any changes in TAX structure will result in some hesitancy before it is accepted, and this is very normal.

In your opinion, do you think the Indian diamond industry is in a major crisis as it is made out to be right now? In times of tight liquidity, do you think trading cautiously and diminishing credit will bring the industry back to its former self? Your suggestions?

Currently, there is a money crisis because of market change and also there is a problem of liquidity in the market. As nothing is permanent in this world, so this situation is also not here to stay.

Whenever there is a recession in the market, there is ample opportunity to learn. Therefore, currently, people who are into trading of diamonds should learn balanced trading. In the present time, bank facilities have also been reduced. It is going to impact the business. But I see it as a very positive step because as credit increases in the diamond business, likewise stock of diamond also increases. Hence, it is good for controlling the overstock of diamonds. But new entrants and aspiring emerging companies need more bank facility and this should be thought upon because no business can progress without bank support.

How is the demand situation for diamonds and diamond jewellery in overseas markets right now? Do you see demand picking up in India’s major consuming markets like the US, Middle East, etc.? In terms of potential markets, which countries do you think should be explored for exports?

Globally, today the demand for Diamond and Jewellery both are marginally low as China fights with the USA over Trade war. Hong Kong fights for its rights. But at the same time, India is gearing up for Festive season coming up, and the US is also preparing itself for the season. Demand from Europe is coming up. Overall there is demand but for a very particular choice of Goods.

Among many issues, the Indian diamond industry faced ‘mixing’ of lab-grown diamonds, which negatively impacted the demand for natural diamonds. Will the 8-digit HS Codes recently introduced by the Indian government for both rough and polished synthetic diamonds be a deterrent? Any other solutions from you?

The mixing of Labgrowns with Natural is now history, as with the help of industry-wide awareness and enhancements to the Innovation in Diamond type detection machines, this has reduced to a level where these cases are unheard today. Simultaneously, we welcome this government’s decision.

It is good that HSN code of real diamonds and lab-grown diamonds have been separated. This decision will benefit both Natural diamond and Lab-Grown diamond business as now both can be considered individually for various policies and rules.

The Indian industry is badly hit currently due to liquidity problems, polished prices going down, bank financing cut drastically, high rough cost, production reduced at cutting centres, workers rendered jobless, gold prices going up … to name a few. What solutions do you suggest?

When everything around us seems a problem, just look within and try to reflect on what the issues are, and what can be changed. This is the best time to bring transformative changes to the company.

In any given situation you will find companies that are growing and making profits, in the same market there will be companies losing business and making heavy loses. It’s not a situation every time.

It’s our mindset most of the times. The situation affects us for sure because we are part of it and we do not have any superpowers, but managing those situations is in our hand we usually manage it with the help of our mindset and thinking.

With Indian G&J industry has grown larger, the working style seems to have changed too over the years. Is the ‘trust’ factor of yesteryear diluted in a way? In your opinion, is that a price any close-knit industry faces as they grow bigger? Your thoughts?

Yes, Indian G&J industry has grown a lot in the last decade and it is grown to maturity. When a person matures, he opens up and becomes more transparent and adheres to ethics more than he did in his childhood because by now he knows the world better. Similarly, our industry has grown to become more matured and responsible. Trust is highly appreciated today in the virtual world of the Internet. Word of mouth is considered the best marketing tool, but unfortunately, it has not paid, and thus everyone is required to act with ethics.

Finally, what is SRK’s agenda for the future? Are you consolidating your existing projects or have any expansion plans on the horizon?

I always dreamt that I want to create my business that keeps running and serving the industry from generation to generation. By God's grace, we have been successful in creating one such business house that is managed and owned by Joint Family and is growing, achieving higher milestones and setting benchmarks. We are an optimistic organization in nature and thus we are hopeful that we will still be keeping the same pace in future as well.

I began 55 years ago in this industry and today my 3rd Generation is positively looking up with pride to join this business with even more practical knowledge and enthusiasm than what I had in those years. I am proud of my Third Generation (from business angle its 4th Generation). I feel I have achieved everything in life. And I know God has four hands on me, as I am aware I am a very ordinary simple man, how could I be so blessed in one lifetime? With this, I also hope that the industry would be very energetic in future attracting more and more youngsters from the world over. We have already pulled-up our sleeves and invested in diamond processing as well as sales infrastructure for future growth. We are gearing up to expand our market base. The Disruption is yet to happen to this industry and we are all waiting for the Über, Air B&B effect to happen to our industry.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished