The Hindu Business Line : Suashish Diamonds earmarks Rs 500-cr for expansion, acquisition

Mumbai, May 20 Suashish Diamonds, a DTC sightholder, is in talks with Reliance Jewels and Tanishq to undertake orders for supply of diamond jewelleries. Sushish Diamonds sells jewellery under the brand name Ishi.

Mr Gopal Laddha, Chief Financial Officer, Suashish Diamonds, said, “We have initiated talks with Reliance Jewels and Tanishq to undertake orders for supply of designer diamond jewellery.

“Margins in undertaking job-works are much higher at 9-10 per cent compared to 1-2 per cent earned from branded jewellery sale. In jewellery-making, profits are higher if gold loss is restricted. Our gold loss is just one per cent against the industry average of nine to ten per cent,” he added.

Suashish Diamonds has created a war chest of Rs 500 crore from internal accruals for future expansion and acquisition.

Production unit

The company’s new production unit at Andheri in Mumbai will go on stream from August, while it plans to upgrade facilities in the seven year old unit at Borivili in Mumbai.

At the retail level, the company is expecting the turnover to increase to Rs 30 crore in fiscal 2009 from Rs 20 crore last year. “With the total market size of Rs 150 crore, the branded jewellery business is still in a nascent stage in India. There is a huge potential as there are just about 10-12 brands,” said Mr Laddha.

In addition to its presence in the US and Hong Kong, Suashish will soon open a marketing office in Europe and Japan to widen its global reach.

China catching up

“Though India is considered as a cost-effective jewellery manufacturing centre, China is fast catching up both in production and demand. We may consider opening a manufacturing centre there,” said Mr Laddha.

Established last year, Suashish Diamonds (Botswana) Pty Ltd will take care of rough diamond supply to India. The company will be investing $30 million in equity to further enhance capacity.

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Suashish Diamonds earmarks Rs 500-cr for expansion, acquisition