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Gems and
Jewelry
Thailand
is renowned as one of the world’s 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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The
gems and jewelry industry has been a powerful export earner
for the country with the segment placing seventh amongst Thailand’s
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
Thailand’s 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 Kong’s 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.
Thailand’s
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.
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Thailand’s
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.
 Thailand’s
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.
Thailand’s
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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