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Jewellery Industry in Sri Lanka
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Jewellery Industry in Sri Lanka

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This presentation shows a thorough analysis of global jewellery market and Sri Lankan jewellery industry. This will be highly beneficial for a small & medium enterprise to decide whether to go …

This presentation shows a thorough analysis of global jewellery market and Sri Lankan jewellery industry. This will be highly beneficial for a small & medium enterprise to decide whether to go international or not, being in the Sri Lankan jewellery market.

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    • 1. Ashen kumarasena Husnun Nazeeyl Kavindu Hapuarachchi Bhanuka Gunatilleke Prabath Ariyapala
    • 2. Global Jewellery Industry
    • 3.  As of 2012 global jewellery industry was worth $275 billion  87% were fine jewellery and 13% costume jewellery  Fine jewellery – highest ever growth rate (46% during the last 5 years)  Gold and Diamonds accounts for more than 75% of fine jewellery  Platinum and Palladium are becoming popular in recent years
    • 4.  3 key value additions (Sourcing, Fabrication and Retailing)
    • 5.  Gold and Diamonds together accounts for more than 75% of global fine jewellery  Majority of the Diamond supply (Nearly 90%) comes from 7 countries (Botswana, Russia, Angola, South Africa, Canada, Australia, and Dem. Rep. of Congo).  Gold too is supplied by 7 countries, more than half of the gold comes from South Africa, USA, Australia, China, Russia, Peru and Indonesia. The rest from nearly 60 countries  Gold is also sourced from scrap recovery and through central bank sales
    • 6.  Fine Jewellery 87% Costume Jewellery 13%  Fine Jewellery – Plain Metal and Gem Studded     Traditionally Italy, USA, Thailand, China/Hong Kong have been the leading players in fabrication of fine jewellery However India and Turkey have become significant in fabrication; India has even overtaken Italy to become the world’s leading gold jewellery exporter. India, China and USA, the current leading fabricators in the world also have other advantages, such as having a large domestic market, skilled labour etc. Price fluctuations of precious metal has led the search for alternatives. Palladium has been the best option so far.
    • 7.  US has always been the biggest jewellery market  Asia, regionally, is the biggest market (India and China contributing more than half)  Traditionally there was no branding, but more recently branded jewellery is increasingly becoming popular
    • 8.  Controlled supply of precious metal and stones.  Large part of world’s Gold and Diamond production is split between just 11 countries   Controlling the price using supply Carat Differences  Us and Europe 9 – 18 carats (Gold)  Asia 22 – 24 Carats
    • 9.  Illegal Activities  Money laundering, illegal trade and human exploitations  Blood Diamonds  Evading tax and money laundering  Human rights violations, mainly when mining
    • 10.  Hallmarking     Marking the carat value Performed by an independent assay office Widely used in US, Europe and China, but at only a small level in India KPCS - The Kimberley Process Certification Scheme Agreement between producer, trader countries and leading players to confirm the origins of the diamonds, Backed by United Nations  To prevent Blood Diamonds  Not 100% successful, but significantly increased transparency in the industry 
    • 11.  Ethical Mining  Encourages responsible mining practices  No Dirty Gold initiative by not only social groups, but also including leading brands and large retailers  It aims to  reduce the environmental impacts  ensure healthy and safe working condition for workmen  reduce negative impact on communities such as, forced displacement, child labour, public health, prostitution etc (KPMG, 2006)
    • 12.  Agriculture Industries Tourism Exports  Reasons for the development of economy   
    • 13.      The start and Early stage Employment 3 basic segments Reasons for the low progress Steps taken to promote jewellery industry
    • 14.    Industry growth perspective? negative or positive or static!!! Price increase and attractiveness. Main demanded products? Locally – foreign  Firm size diversity and its effectiveness.  Revenue of the industry.
    • 15.  Geographical diversity.  Flexibility.  Competition.  Chain reaction.  Use for religious activities.
    • 16. • • • • • • • • • • Tariffs Specified license and certifications Start-up costs Distribution Challenges Inventory costs Existing players in the market Investment risk and losses Insurance costs Need of highly skilled employees Different rules and regulations in different countries
    • 17.     Total of 100 countries 14 consistent buyers Currently generates 95% of the total revenue US $
    • 18. Total Revenue 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2000 2001 2002 2003 2004 2005 2006 Total Revenue 2007 2008 2009 2010 2011 2012 2013
    • 19. •Switzerland •United States •Germany Revenue by percentage 12% 16% 50% 22% germany
    • 20.    Switzerland United States Germany
    • 21. Revenue from Jewellery exports to USA 8,000,000 6,000,000 4,000,000 USA 2,000,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue from Jewellery exports to Switzerland 0 2013 2012 2011 2010 2009 2008 2007 500,000 2006 1,000,000 germany 2005 1,500,000 switzerland 2004 2,000,000 2003 2,500,000 2002 3,000,000 2001 3,500,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2000 4,000,000 Revenue in US $ Revenue from Jewellery exports to Germany Revenue in US $ Revenue in US $ 10,000,000
    • 22.     Revenue = 7676816.523+0.823 total value of the exports to Switzerland + 1.310 total value of exports to USA R value 0.861a Adjusted R value 0.720 F value of 85.736 Coefficientsa Standardized Unstandardized Coefficients Model 1 B (Constant) total value of the exports Std. Error 7676816.523 .106 1.310 .387 Coefficients B Beta t 984911.209 .823 95.0% Confidence Interval for Sig. Lower Bound Upper Bound 7.794 .000 5648353.916 9705279.130 .793 7.790 .000 .605 1.040 .344 3.383 .002 .512 2.107 to switzerland total value of exports to USA a. Dependent Variable: Revenue
    • 23.  History       Present      Pre-colonial stage Population growth and Immigration 1787 constitution Discovery of gold (1848) Major downfalls Growth rate (annual- 2.7) (Q4- 3.2) GDP BOP Investments Macroeconomic policies   Monetary policy Fiscal policy
    • 24.        33 billion dollar industry Industry growth 67,622 businesses 172,889 employees Fragmented Market share Recovery
    • 25.      Bargaining power of the customersThreat of new entrants Rivalry Threat of substitutes Bargaining power of the suppliers
    • 26.     Political factors Economical factors Social factors Technological factors
    • 27.      Diamonds Precious stones (other than diamonds) and semi-precious stones Synthetic or reconstructed precious or semi-precious stones Articles of jewellery Imitation jewellery
    • 28.      Introduction Best possible mode- Exporting Advantages Disadvantages Limitations in other modes
    • 29.       what is a strategy? Cross cultural assessment Distribution channel Risk assessment Strategic time Market intelligence
    • 30. Incentives on high tech machinery  Separate department  Training and development programs  Branding I.e. Sri-Lankan blue sapphire  Emphasize on collecting and providing more data 