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Debmarine Namibia's new diamond recovery vessel to arrive in SA next week

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Asian Star Company Ltd.: “The biggest problem is the fluctuation of rough prices”

03 august 2009

Asian Star Company Limited is one of the world’s leading diamantaires and a DTC Sightholder. Their principal business activities include diamond manufacturing, jewellery manufacturing and retailing. The company has spread its marketing arms across three continents - Asia, Europe and North America where it has extensive manufacturing and marketing facilities. Mr. Himanshu Shah, the company’s director, has found time to answer the questions posed by the Rough&Polished correspondent.

As a rough buyer, what kind of difficulties or inconveniences do you come across and is there something which worries you?

For me the biggest worry is regular supply of rough and profitability. If rough prices go up frequently I cannot, as a manufacturer, push the polish customer pay me more. The biggest problem for me is the fluctuation of rough prices because I cannot enter into long-term price commitments with my customer because if rough goes up and I stay committed to a low price then I lose.

From your point of view, what is to be done to improve the sale system of rough diamonds?

Producers make their own decisions as to what system is good for that. The only thing they have to do is to identify the right user of their goods able to market them at their end value.

Being a polished diamond manufacturer, you probe the market for rough diamonds giving you an optimal price/quality ratio and then turn them into polished diamonds which have a new price/quality ratio as an end product. How often when buying diamonds you later discover that the second ratio does not correspond to the first one? Why does it happen? How much do you lose on this?

I know what material I buy and what is going to be an end product. So for 95% I am OK. Being in business for 40 years my company knows very well what product will come from different producers.

Probably, it would be much easier to sell and buy rough diamonds, if there were a universal and globally acknowledged certification system, which would make the rough market transparent like the gold market. To you mind, what is to be done to achieve this?

It would be much better if every producer had its own assortment and own pricing, and the market will arrange for the evolution of goods.

Many experts say that Russian diamond fields are yielding diamonds of a very high quality. What is your point of view in this respect?

Russia has diamonds of very different quality, they are not only of high quality. Actually, Russian material is very nice but there are various qualities of Russian goods.

Will Russian diamonds be of interest to big companies buying and cutting these gems?

Sure! Russian diamonds are always good. The have been supplied to the market for many years and it is a very nice product that people want.

What do you think about the system of long-term contracts between diamond miners and manufacturers? In what way is it convenient and inconvenient for the latter?

It is always very good.

Would you say the same thing about long-term contacts with ALROSA?

Yes, sure! For me it is very viable, very good.

What kind of sales system for rough diamonds would you like to see – to make it acceptable for wholesale buyers as much as possible?

It is a long-term commitment for the producer to supply and for the customer to buy.

Alex Shishlo, Editor of the Rough&Polished European Bureau, from Antwerp