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Diamond India Ltd. The Rough & The Smooth
DIL briefly forayed into polished; and also formed a joint venture with Bangkok company for coloured gemstones.
By: Diamond World News Service
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Aug 21 2010 6:10PM
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Reference: 5232  

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Diamond India Ltd, a government supported initiative of the diamond industry, is a consortium of private companies formed in the years after the demise of the single channel marketing system. With the avowed aim of sourcing rough directly for the India centre, the DIL briefly forayed into polished; and also formed a joint venture with Bangkok company for coloured gemstones. Today it is poised on the threshold of a new initiative as it prepares to launch its bullion scheme. Nilan Singh gets together withPraveen Shankar Pandya, chairman DIL to explore various facets DIL, the situation in the industry, DIl’s journey till now and its new plans.

A few years ago, 58 leading diamond and jewellery manufacturers and exporters of India came together to form Diamond India Ltd. At that time, the collapse of the single channel marketing system, whereby De Beers’ Diamond Trading Company share of distribution of rough diamonds fell drastically, meant that there were many companies and countries which took to marketing their rough directly to the market. The gigantic Indian diamond processing industry always hungry for rough felt it became necessary to make direct contact with producers. The main and primary objective of DIL therefore, at the time of formation, and which still remains, was the direct sourcing of rough diamonds from mining companies and selling it directly to the manufacturers in India.

"DIL is the corporate arm of the Indian diamond industry", is the way the body describes itself – “The bridge between miners and Indian manufacturers”. DIL is approved and promoted by government of India for joint venture with leading overseas diamond and colour stone mining companies. One of the first of these was a joint venture with a Thai company for marketing Thai rubies and other coloured gem stones in India.

Now, in a response to the needs of the industry, and as a reflection of the current phase of the industry, DIL will shortly foray into the gold bullion business.

Praveen Shankar Pandya, Chairman DIL, in conversation with Diamond World:

How would you define the situation vis-à-vis the availability of rough ?

Post recession there are two aspects to production. During the recession there was a sudden decline in recession and consequently prices of rough fell by over 30%. Demand for polished had evaporated due to which overall demand for rough dropped, there was the lack of liquidity, the closure of factories across the world, and particularly in India. This cycle forced miners to reduce the production or hold production. Then, as the market started picking up, and once the polished pipeline cleared out, suddenly there was a shortage of polished. Factories began opening up, there were no extra goods, and the reopened factories tried to run in full steam. The miners suddenly started realizing higher prices.

Rough prices have been a matter of concern within the industry. What is your perception about how they will move in the near future and the impact on the industry?

In 2009, post mid-2009, the whole situation began to change. The miners realised they were able to get higher prices, but they were not sure whether it was V or W recovery and if there would be a downturn again. Everyone was very cautious: the manufacturers in India didn’t want to go back to the same situation neither did the miners didn’t want to go back to selling below cost. It was in their interest to curb production in both ways – from the price realization point of view, as well as to keep production costs down.

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sumit javeri
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can i recd ur annual report via email for the year ended 31'Mar 2011
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(newyok)
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