Forevermark Diamonds on recovery track in India

After witnessing a lull in 2015, Forevermark, diamond brand of DeBeers Group is now showing some sign of recovery this year. India is the third largest global market for diamonds after US and China.

"The diamond jewellery market was very flattish in 2015. Additionally, after a strong start to 2016 in January and February, the strike (by jewellers in India) in March and the beginning of April roughly impacted sale. But now, the diamond market in India has bounced back. India has been an important location for De Beers as a huge volume of rough diamonds come to India for cutting and polishing and eventually for exports. India contributes about 10 per cent of the Group's diamond sales revenue and over 50 per cent of sales of rough diamonds," said Stephen Lussier, CEO, Forevermark

In the January to June 2016 period, the world's largest company by value, with 35 per cent market share, has seen recovery both in sale of rough diamond and retail jewellery sale in the country

In 2008, De Beers launched the high-end Forevermark brand, which applies a tiny watermark to its diamonds to assure buyers that their progress from mine to shop has been completely ethical.

Lussier added, "Move from value-based gold jewellery to convenience (wearability) based diamond jewellery, together with expansion of jewellery retail business in India has meant that the demand for diamonds in the country has gone up significantly in the last few years. India sales for the company have been growing 25-30 percent every year.

Forevermark has successfully applied technology to inscribe diamonds of very small sizes for their authenticity and naturalness, thereby making them affordable, accessible and wearable.

Sachin Jain, president of Forevermark Diamonds India said, "The company has been able to devise a method to inscribe diamonds as small as 10 points. This, he said, has brought down the price of entry level diamonds to as low as Rs 7000 - 10,000, thereby making them attractive for the first time buyers."

Forvermark has set up a diamond cutting and polishing facility in Surat in Gujarat where it has invested $10 million to create capacity to handle 500,000 rough diamonds every year. The company also offers services such as grading and screening of small diamonds for jewellers at this facility Mr Jain said.

An estimated $13 billion worth of rough diamonds are mined every year. Only 15 new mines are expected to become operational in the next 40 years.

Prices of rough diamonds have increased by 70 per cent, while polished diamond prices have increased by only 30 per cent, resulting in profit margins of diamond manufacturers shrinking to 0.3-2.3 per cent.

Globally, the US market, which accounts for roughly half of all diamond sales, grew at a healthy 5 per cent. It remains far ahead of China 17 per cent and India 10% in terms of market share. De Beers remains the largest producer of diamonds by value, followed by Russian giant Alrosa; Rio Tinto, Dominion and Petra.