THE RUBY CAPITAL OF THE WORLD
For many years, Thailand has been a center for rubies, both in mining and in production. While the nation has few deposits left, it remains the main center for cutting and treatments of the precious red gemstone. Therefore, it is not surprising that the theme for the 57th Bangkok Gems & Jewelry Fair (BGJF), held this past February, was “The World’s Ruby Capital.” And, in other news from the Fair, Bangkok will host the world’s first Ruby Symposium, to be held in April 2017. But, news of the planned Ruby Symposium was not the only surprising announcements during the BGJF.
By Cynthia Unninayar
By Cynthia Unninayar
The inaugural ceremony for the opening of the five-day Bangkok Gems & Jewelry Fair (BGJF) on February 24 was a spectacular event, worthy of a Broadway—or Bollywood—musical. Traditional Thai dancing and music were on the menu as well as a sumptuous fashion show featuring some of the nation’s most luxurious jewelry. Among the honored guests was Ms. Chantira Jimreiwat Vivatrat, Deputy Director-General of the Department of International Trade Promotion (DITP), Ministry of Commerce, indicative of the importance the Thai government places on the gems and jewelry sector.
The Thai Industry
Organized by the Thai Gem and Jewelry Traders Association (TGJTA) in association with Department of International Trade Promotion (DITP) and the Gems, Jewelry and Precious Metal Confederation of Thailand (GJPCT), the Bangkok Gems & Jewelry Fair is held twice a year to support and promote the nation’s gems and jewelry industry. In 2015, the sector was ranked third in the country in terms of export value, generating US$6.6 billion. The 15,777 businesses involved in the industry—of which 3,500 are registered companies and 90 percent are SMEs—employ 1.3 million people.
The industry is made up of three segments: gemstone heating, cutting and polishing; jewelry design, casting, setting, polishing, quality control, and packaging; and sales in domestic and international markets.
Representing more than a third of Thailand’s gem and jewelry exports, fine jewelry creation in Thailand relies on skilled craftsmanship, original designs and modern technology to produce jewelry competitive in global markets. A significant share of this fine jewelry is third-party production that Thai manufacturers carry out for many foreign brands, including a number of well-known global luxury brands. These pieces are mainly crafted in gold, diamonds and gemstones.
Thailand is also the largest exporter of silver jewelry in the world. The country’s silver makers follow ancient traditions to create a vast array of fine jewelry as well as costume jewelry and objets d’art. Some are created by artisans around Thailand who create intricate designs, while others are the products of modern manufacturing. The USA is the second largest market for Thai silver products.
A number of these production facilities are located in tax-free zones, such as Gemopolis, on the outskirts of Bangkok. Here, foreign companies benefit from a strong infrastructure, easy access to raw material suppliers and a skilled workforce offering high-quality workmanship.
This year also marks an important milestone for the Thai gems and jewelry sector as the nation enters the ASEAN Economic Community (AEC), and it is largely considered the hub of this sector in ASEAN.
“Thailand has a 100-year history with gems,” says Mr. Somchai Phornchindarak, President of the GJPCT, “but now we no longer have our own gems. Yet, it doesn’t matter where the stones come from; they are expertly crafted into jewelry in Thailand. When you think of colored stones you think of Thailand and we have our own country brand called Ploi Thai for exquisite creations made in the nation.” He goes on to add, “In three to five years, Thailand will become the gem hub of ASEAN, but we will not rest there. I predict that it will also be the gem capital of the world, which is why we are asking for government support to liberalize taxes.”
Recent discussions with the Thai government towards securing zero-duty status for the industry, in order to bring it closer to Hong Kong, are starting to bear fruit. On February 9, 2016, the Thai Cabinet approved a number of tax exemptions aimed at promoting the nation’s gems and jewelry industry for importers or sellers who are registered as individual traders. It has waived the value-added tax (VAT) on imports of unpolished diamonds, colored stones, rubies, emeralds, topaz, garnet, opal, zircon, chrysoberyl, jade, pearl and gems (although not on imitation or artificial items). Individual importers will also be exempted from paying personal income tax on money earned from selling unpolished gems and pearls, and will pay a one-percent flat tax on income instead. Other exemptions include exemptions for import duties on machinery and tools that enhance manufacturing efficiency and essential materials such as polishing blades and diamond dust, silver chain coils and rolls, as well as gems and jewelry products during BGJF (one-month grace period).
“By September, we will have better tools to compete with the Hong Kong gem and jewelry shows,” explains Mr. Suttipong Damrongsakul, President of the TJGTA.
Change of Dates for 2017
In terms of competing with the two main Hong Kong shows, which are held shortly after the two BGJF events, Damrongsakul announced during a press conference that, starting with the 2017 shows, the Bangkok Gems & Jewelry Fairs would be “decoupled” from the Hong Kong shows. In other words, the February event will be held in January and the September event will be held in August. No final dates were available at press time.
The rationale for splitting away from the Hong Kong fairs is, according to Damrongsakul, to allow Thai dealers the opportunity to attract more buyers to the show, since the nation has been—and remains—such an important hub for colored stones. “This split would ensure that buyers don’t need to hurry from our fair to other fairs in the region and that exhibitors would be able to participate at the fair,” explained Damrongsakul. “It’s impossible for buyers to travel for 15 days to do several shows,” he added. “I have been talking with many visitors and exhibitors, and they all have the same comment. The BGJF should be split from Hong Kong.”
As a stand-alone show, buyers would make the trip especially to Thailand for their purchases, as they have done in the past, when the Thai shows were the main gem and jewelry events in Asia. “Thailand is at center of the AEC, a new community of 600 million people,” adds Damrongsakul. “Buyers can reach new suppliers from the AEC, and suppliers can reach international buyers, all in a one-stop expo.”
To the concern of some European and North American buyers who felt they could not make four trips a year to Asia for their purchases, he responded that the new tax advantages and the fact that Thailand is a destination in itself would help offset these concerns. In any event, the BGJF officials insist that decoupling from the Hong Kong shows is a strategy worth exploring to help boost both exhibitor and visitor attendance.
During the 57th BGJF, the world’s first Ruby Symposium was officially launched. Organized by the GJPCT and the TGJTA in alliance with the Royal Thai Government, the symposium will be held in April 2017 in Bangkok with the aim of promoting Thailand as the world’s center for the production of rubies and other gemstones as well as a tourist destination.
“The aim of the Ruby Symposium is to address the issues and challenges of the world’s ruby trade and to establish a transparent and trustworthy supply chain on an international level,” stated Phornchindarak. “Keynote speakers will include will be an assembly of the world’s leading manufacturers, exporters and business operators in gemstones, academics, analysts and researchers, gemstone mining countries, various auction houses, and representatives of various organizations such as CIBJO and ICA, as well as various laboratories such as NGTC, SSEF, Guberlin. It is expected that there will be more approximately 400 persons joining the event,” added Damrongsakul.
Respected gemologist and author, Richard W. Hughes, of Lotus Gemology, said that the symposium was coming at an apposite time. “There’s never been a better time to buy ruby, because we have more production of fine quality stones than there has ever been present in the history of mankind.”
Rupak Sen, Regional Marketing Director, Gemfields Asia, pledged his support to the Ruby Symposium 2017. “I think the Ruby Symposium is a great idea, and Gemfields will definitely look at supporting it in whatever possibly way that it can.”
During the BGJF, a mini-symposium was held with ruby as the subject. Speakers included Vincent Pardieu from GIA, whose topic was “From Burma to Thailand and now Mozambique: challenges and opportunities in the ruby trade,” as well as Dr. Dietmar Schwarz, Lab Director of the Asian Institute of Gemological Sciences, who lectured on “The geographic origin determination of rubies.” Richard W. Hughes talked about “Ruby: King Crimson,” and Rupak Sen, spoke on the “Need for consistent supply and marketing.”
Anecdotally, traffic to visit the 2600 booths at the 57th BGJF seemed slow. Having said that, however, we spoke with visitors from Canada and the USA who stated that they were buying, and the lesser number of visitors gave them more chance to find what they were looking for. A number of exhibitors agreed that the buyers who came were serious and not “just looking.” During these difficult economic times, expectations at the show were not high, but most exhibitors expressed a better-than-expected opinion of the show.
“The business is a bit slow, but still ok. The people who come to BGJF are real buyers,” declared Amit Gandhi, Managing Director of RCAN Jewellery. “We had new merchandise for the show, mostly small items that worked well.”
“Every year, BGJF gets better and better for us, because as we grow, we put money into marketing. So, we get more customers to our booth. By the way, for us, local market is very important. Also, we have customers from overseas who buy wholesale, especially
ASEAN buyers. We’re seeing an increase in customers from this region,” said Hesam Kazemini, Managing Director of Khunnapap Jewellery Supplies Co.
“BGJF this year is good overall although world’s economy is down right now. Our market continues to grow. The Zero VAT policy is helping in a way. My own business focuses on silver, and our clients are more likely to be young customers who are interested in fashionable styles,” added Veera Wanichchayapitak, President of CNR Jewelry Co.
GIT – Onsite Lab Services
The Gem and Jewelry Institute of Thailand (GIT), is among the world’s leading gemological laboratories. Under the directorship of Professor Pornsawat Wathanakul, the CIBJO-registered laboratory has highly experienced gemologists and is equipped with the world's most advanced instruments. The GIT is also a member of the Laboratory Manual Harmonization Committee (LMHC), made up of the world’s seven leading gem laboratories.
During the BGJF, the GIT offers an onsite laboratory for buyers wanting to have their prospective gemstone purchases analyzed and authenticated. Testing was completed in generally less than an hour, at very reasonable prices. “We provide this service so that prospective buyers can have an extra measure of confidence when considering purchasing gemstones at the show,” stated Wathanakul. “Of course, we also offer a wide range of services at the GIT lab in Bangkok all year round.” At the moment, the GIT is also cooperating with partners from China, Japan, Sri Lanka, and Tanzania to establish certification standards for gemstones, especially ruby and sapphire.
The next Bangkok Gems & Jewelry Fair will take place September 7 to 11, 2016, under the theme, Sourcing Thai: World Premier Gemstone and Jewelry Sources. “Come and enjoy our famous Thai hospitality,” invites Suttipong Damrangsakul. “The fair’s organizing committee is offering accommodation in one of Bangkok’s fine hotels for international visitors. All they have to do is register online at www.bangkokgemsfair.com to receive a free hotel coupon.”