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Home \ Exports \ Industry Outlook \ Gems & Jewelry

Gems & Jewelry

Gems and Jewelry

Thailand is renowned as one of the worldís leading gems and jewelry exporters. The skill of Thai craftsmen in cutting precious stones and diamonds to very high standards has long been appreciated by the industry, and international gems and jewelry merchants send large quantities of their gemstones to be cut in Thailand. Moreover, Thai manufacturers are very keen on initiating jewelry designs and standards are on par with international demands.

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Thailand's Gem and Jewelry Exports
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The gems and jewelry industry has been a powerful export earner for the country with the segment placing seventh amongst Thailandís top ten exports, registering sales of U.S.$ 1.5 billion in 1999. Jewelry accounted for 55 percent of the export total followed by diamonds at 23 percent, gemstones and pearls at 18 percent, costume jewelry at four percent and synthetic gems at one percent. The largest markets for exports of Thai gems and jewelry are the United States, Israel, Belgium and Japan. In addition to this, it is believed that another 30-50 percent can be added to these export figures as a result of direct sales from merchant to tourists visiting the country.

The Department of Export Promotion (DEP) is active in showcasing Thailandís gems and jewelry industry, co-hosting a trade fair for the industry twice a year. Recent attendance figures have seen the show becoming the best gems and jewelry show in the region, recently surpassing Hong Kongís similar fair. At least five trade associations are busy with extensive public relations programs intended to boost the image of the Thai gems and jewelry industry overseas. The Board of Investment (BOI) has been successful in luring foreign gems and jewelry companies to set up operations in Thailand, and often lobbies for reduced taxes, tariffs and trade barriers related to the industry.

Thailandís gem and jewelry industry has emerged as a major international player in the production, processing and trade of the products. The country has positioned itself as a regional hub for diamond and precious stone cutting, capitalizing on its low labor costs, skilled craftsmen and its proximity to major colored gemstone producing countries including Myanmar, Sri Lanka and India. It currently ranks as the world's fifth largest diamond-cutting center, experiencing strong growth in this field since 1981 when the Thai government removed import duties on diamonds. In 1999, Thailand imported nearly U.S.$ 700 million of diamond and precious stones for domestic consumption, and export processing.

Thailandís long experience in mining colored precious stones has given businesses and craftsmen a wealth of experience with gemstones. Thailand has extensive deposits of blue sapphires in Kanchanaburi province, 100 kilometers west of Bangkok, which provide local industry with a high quality source of the precious stone. Smaller deposits of rubies are found in Chantaburi province, near the Cambodian border, which yield steady supplies of the rare gemstone.

Thailandís exports of gems and jewelry have slumped since economic problems hit Asia in 1997. Sales have fallen by 25 percent since 1995, reaching a low in 1998 at U.S.$ 1.3 billion. Asian markets have been particularly hard hit, with exports to Japan and Hong Kong slumping 60 and 75 percent respectively. Industry experts believe that the fall has been caused by liquidity problems faced by Thai exporters, reduced demand in Asia because of the economic crisis, and stiff competition from other markets.

Formidable opposition in the market for lower priced gems and jewelry is faced from Sri Lanka, Myanmar and India, who have more abundant resources of precious stones and lower labor costs than Thailand. These countries have been improving their skills and infrastructure to facilitate the cutting and processing of stones locally. On the other hand, designers in Italy, France and Hong Kong have established their own technologies and famous brand names adding premium value to their products, and allowing them to dominate the high-end gems and jewelry market.

Thailandís solution to stay competitive in the global market has been to upgrade its production processes through improved technology. Particular focus has also been placed on the development of new design skills and on increasing marketing efforts to establish Thai brand names in the world market. In order to reduce costs, Thai companies are looking to source competitively priced gemstones and raw materials from Africa to process and re-export, while the Board of Investment (BOI) is lobbying for the removal of duties on necessary import materials. The recovery in export sales experienced over 1999 is forecast to continue as Asian demand recovers, and Thai companies continue to target new markets, styles and trends in the jewelry market

 

 





   
 
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