Diamond processing takes place in about 30 countries but is concentrated in five
countries: India, Belgium, S Africa, Israel and U.S. India accounts for approximately
60% of the global polished diamonds in value terms, 80% in karatage and 90% in
pieces. China and Thailand are catching up as centers for diamond cutting and
polishing.
The diamond processing industry is largely dependent on supply of rough diamonds.
Australia, Botswana, Russia and South Africa are the major suppliers of rough
diamonds. The production of rough diamonds from mines is presently dominated by
De Beers (DTC), which is the largest diamond miner in the World.
Diamond cutting is a great skill. The natural form of a diamond would determine the
shape of the final polished diamond. Diamonds are usually distributed to one of the
main cutting and trading centers where experts cut and polish rough diamonds into
various shapes. Polishing follows cutting before diamonds are again classified based
on various parameters. These are then sold to wholesalers or diamond jewelry
manufacturers.
India’s dominance in the cutting and polishing segment can be attributed to
experienced craftsmanship and relatively low cost Indian labour. Diamond
processing remains highly fragmented in India with over 100,000 units.
Export of cut and polished diamonds grew to USD 14.2 bn in 2007-08 from USD 10.9bn in 2006-07. Hong Kong emerged as largest importer of cut
and polished
diamonds from India with a share of 35% of total exports followed by the United
States and UAE.
According to a KPMG report Cutting and Polishing of diamond (CPD) centers will be
benefited by the fall in rough diamond prices and valued addition in polishing will
increase from 29.3% in 2005 to 34.1% in 2015. The report also says that India’s
share will drop to 49% from the current ~60% by 2015.
Export of cut and polished diamonds from India
Cost of processing diamonds – comparison
Source: JP Morgan Report dated 11 April 2008
While diamond processing is one of the major components in the value chain, it
yields thin margins as cost of the raw material comprises 85-95% of the selling
price. The diamond processing industry is presently working at a margin of 2-2.5%.
Companies have started to look at downstream aspects where
manufacturer/exporter of diamonds and jewelry are shifting focus to branding and
retailing. Profitability in the branding and retail business is much higher.
countries: India, Belgium, S Africa, Israel and U.S. India accounts for approximately
60% of the global polished diamonds in value terms, 80% in karatage and 90% in
pieces. China and Thailand are catching up as centers for diamond cutting and
polishing.
The diamond processing industry is largely dependent on supply of rough diamonds.
Australia, Botswana, Russia and South Africa are the major suppliers of rough
diamonds. The production of rough diamonds from mines is presently dominated by
De Beers (DTC), which is the largest diamond miner in the World.
Diamond cutting is a great skill. The natural form of a diamond would determine the
shape of the final polished diamond. Diamonds are usually distributed to one of the
main cutting and trading centers where experts cut and polish rough diamonds into
various shapes. Polishing follows cutting before diamonds are again classified based
on various parameters. These are then sold to wholesalers or diamond jewelry
manufacturers.
India’s dominance in the cutting and polishing segment can be attributed to
experienced craftsmanship and relatively low cost Indian labour. Diamond
processing remains highly fragmented in India with over 100,000 units.
Export of cut and polished diamonds grew to USD 14.2 bn in 2007-08 from USD 10.9bn in 2006-07. Hong Kong emerged as largest importer of cut
and polished
diamonds from India with a share of 35% of total exports followed by the United
States and UAE.
According to a KPMG report Cutting and Polishing of diamond (CPD) centers will be
benefited by the fall in rough diamond prices and valued addition in polishing will
increase from 29.3% in 2005 to 34.1% in 2015. The report also says that India’s
share will drop to 49% from the current ~60% by 2015.
Export of cut and polished diamonds from India
Cost of processing diamonds – comparison
Source: JP Morgan Report dated 11 April 2008
While diamond processing is one of the major components in the value chain, it
yields thin margins as cost of the raw material comprises 85-95% of the selling
price. The diamond processing industry is presently working at a margin of 2-2.5%.
Companies have started to look at downstream aspects where
manufacturer/exporter of diamonds and jewelry are shifting focus to branding and
retailing. Profitability in the branding and retail business is much higher.