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Rising Above the Challenges
Shrenuj & Company
By: Diamond World News Service
Feb 21 2015 4:24PM
Reference: 11199  

One of the technologically advanced companies that has successfully managed to emerge as a winner in the prevailing economic turmoil is Shrenuj & Company. Kunjal Karaniya speaks to Vishal Doshi, Group Executive Director and traces their journey, strategies and future endeavors.

History of embracing change
With over 108 years history in the diamond business, the experience and expertise Shrenuj has accumulated over generations is at the heart of the business’s success. However, Shrenuj is also one of the most technologically advanced companies in the diamond industry. It has been a pioneer in driving innovation and adopting new technology for several decades. As an Indian company, this was a particularly unusual focus for Shrenuj. India became a diamond polishing centre back in the 1800s, and by 1940s was the world’s leading producer of polished diamonds as low labour costs meant that polishing in the historic centres of Belgium and Israel was no longer viable for all but a small proportion of diamonds. Investing in expensive new machinery from England, Germany or Israel, seemed contrary to the competitive economic advantage of an Indian diamantaire. However, Shrenuj held a firm conviction in the potential efficiency and quality benefits that could be gained over time from leveraging the most sophisticated technology. It was a long-term strategy, being both capital intense and requiring significant worker training, but it has paid off. Shrenuj now enjoys the rewards of scalable, technology-driven capacity whilst other companies are struggling to manage rising labour costs.

Shrenuj is very much an Indian company, operating in the heart of Mumbai’s diamond community. However, its Indian heritage has not always been an advantage. Although India is the world’s primary polishing centre, it is also synonymous with large volume, mass-market products, and Indian diamond cutters are traditionally not known for their quality of cut as compared to their competitors in Israel or Belgium. The large number of Indian manufacturers is also typically informally operated and managed factories, working off low overheads, with a transient, day-worker workforce. Shrenuj needed to break the mould and change the industry’s perceptions of an Indian diamantaire in order to succeed and gain recognition as a leading producer for better-make diamonds, which are essentially of ‘non-Indian’ quality. Today, Shrenuj stands as an example of new breed of Indian diamond company, which combines the best of a global corporate management style, deep industry experience, cutting-edge technology, and the cost benefits of operating in India. Based on its competitive advantages in manufacturing, Shrenuj extended manufacturing operations into Africa, by establishing diamond polishing facilities in Botswana and South Africa.

Shrenuj has a dominant position in India and is the market leader in solitaire jewellery, with three distinct consumer brands, Arisia, Bhavya and Sveni, all targeted at discrete market segments to capture maximum market share. However, its domestic success is supported by a globally balanced business, with a strong position in major overseas markets. In the U.S. it is focused on the bridal jewellery sector, which has proven most resilient to the economic downturn. In Europe, it has a number of fashion-focused brands that target the mid-higher end consumer. In the Middle East it markets branded locally-styled jewellery.

When it comes to consumer branding, Shrenuj takes a market specific approach. This might seem contrary to leveraging efficiencies of global scale but the principle behind their strategy is explained by Vishal Doshi, group executive director and a third generation diamantaire. “Diamond jewellery is an emotionally and culturally motivated purchase. In order to capture the hearts and minds of consumers, we need to have a deep understanding of the distinct needs of each regional market and create a focused product and branding proposition aligned with these. However, once a brand has become established and generated regional success and recognition, there are often opportunities to extend its reach into other geographies where there are comparable market characteristics. For example: we are currently looking to introduce at least one of our brands that have achieved success overseas to India in the coming months.”

Despite Shrenuj’s dominant market position in India, and numerous consumer brands, its advertising does not seem as widely prominent as other Indian jewellery companies. Why is this? Vishal explains, “We support all of our brands with full marketing programmes, both in India and overseas. Advertising is just one component of this, and is usually supported by other marketing media such as PR. However, wide-scale marketing is expensive and we need to be disciplined to ensure we are effective and focused. It doesn’t make sense to undertake a national advertising for a brand that is targeted at a specific focused demographic and distributed only through selected cities. Therefore, we only undertake such advertising where we have critical mass. A good example is our Indian retail chain Diti. We launched this in 2007, and to date have undertaken locally focused advertising in just the regions where we have outlets. However, the chain is rapidly expanding. Therefore it will soon make sense for us to launch a national advertising campaign.”

Growth throughout market adversity
Shreyas’s optimism about the long-term future of the industry, and Shrenuj’s own prospects, is demonstrated by the significant expansion plans they have embarked upon. Shrenuj has initiated a number of ambitious new projects in the last year, including commissioning of a diamond-polishing unit in Patna, and has also taken advantage of unique opportunities presented by the downturns. The last year has seen many companies in the diamond sector make heavy cutbacks and scale back manufacturing capacity, usually out of necessity rather than choice. Shrenuj, like most companies, has been prudent in making significant cost cutbacks in the past year, but its overall financial stability enables it to maintain its growth strategy throughout this period of difficulty.

The company’s future strategy focuses on further developing downstream integration. This involves expanding jewellery, and ultimately retailing, activities so as to provide downstream channels for an even greater proportion of its polished diamond production. One major step the company took towards achieving this vision is to dramatically increase its own jewellery manufacturing capacity. It operates a 35,000 sq. ft jewellery factory in SEEPZ, Mumbai. The state of the art factory is segmented into three distinct production units, each focused on the unique needs of its major export markets: Europe, U.S. and Middle East. The factory employs around 30 creative jewellery designers, who work in small teams to continuously generate new and exciting product collections to meet the ever-changing desires of its target consumer markets. Shrenuj has the capacity to produce over 1 million units of jewellery per year.

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