Indonesia- a market that’s so difficult to figure out, say exhibitors at Jewels of Asia ’96, which concluded here July 14 despite a “boycott” of the nation’s first international jewelry trade fair by the local trade association and the World Gold Council’s Jakarta office. Indonesia is a “protected market, with a lot of monopolies”, explains William Lee, project director of Interface Promotions (Singapore), the show’s organizer. “We realize the taxation here is very high to do any business, but it is possible to take orders at this show and to work out delivery details from Singapore or Hong Kong,” said Lee, quickly adding that the ministries of Foreign Affairs, Finance, and Trade and Industry were supportive of JOA ’96. “The ministries agree on globalization…and there was general agreement among them that the various taxes on luxury goods and imports and administrative taxes will need to come down,” Lee said.

Yunisa Alatas, wife of Indonesian Foreign Minister Ali Alatas, was guest of honor at the show’s opening ceremony at the Jakarta Convention Center. That evening, models took to the catwalk wearing jewelry valued from $10,000 to $2 million set comprising a 14-piec, 88 carat ruby necklace with 351 diamonds totaling .80 carats, and a 10-piece, 30 carat ruby bracelet with 149 diamonds weighing 32 carats. Indonesia Colour Stone Gems & Jewellery, which for four generations has sourced quality gem stones from Sri Lanka, loaned a $500,000 blue sapphire necklace for the evening’s modeling in black turtleneck with a 60 carat Colombian emerald necklace valued at $400,000. A woman’s well cared for neck should never go bare!

In all, 50 exhibitors from 15 countries participated in the three-day trade/retail show, but only a handful of local jewelers supported the event. “we are satisfied with the show, although we had expected more traders and buyers,” said Eveline L. Bunyamin of the Jakarta based Mary Jewellery & Gallery.

At the fair, Mary Jewellery showed a variety of fine diamond-set and gem-set jewelry including some carved gemstones as well as a small number of Thai Sukhothai styled emerald-gold jewelry.

Indonesians came to the show during and after work hours and over the weekend, pushing attendance to 8,500. Many had come to see the world’s largest uncut gem quality diamond, the 620 carat Sefadu owned by Lazare Kapland displayed by Singapore’s Larry Jewelry. The diamond was discovered in 1970 near town of Sefadu in Sierra Leone.

Larry Jewelry has always had classic designed ruby-and sapphire-set jewelry, but it’s their platinum diamond jewelry that’s splendid and that few fortunate women can own. One platinum necklace with a 5.42 carat, pear-shaped diamond at center surrounded by 41 carats of smaller diamonds was valued at $193,220, while a platinum ring with a 1.10 carat, marquise-cut diamond was priced at $15,360. A platinum bracelet comprising 23.87 carats of diamonds worked out to $103,570.

Indonesia’s jewelry market is worth about $1 billion annually, according to the Indonesia Goldsmiths and Jewelers Association (Asosiasi Pengusaha Emas Dan Permata Indonesia).

C R Menon, vice president of sales and marketing for Titan Industries Limited’s international operations, describes the show as its “first feel”. There were some inquiries on private labels for Titan’s watches, he said. By his calculation, an Indonesian importer of finished jewelry would be just overwhelmed by duties and taxes exceeding 75 percent.

“The market should give an opportunity to Titan. With recent growth rates of 8 percent, Indonesia will become another Asian tiger. In the medium to long term, Indonesia offers opportunities. The government is slowing the opening up, and they can’t keep duties this high if they want foreign investment. The action is going to be in Asia and in the Pacific. Titan wants to be part of it,” Menon said.

Indonesia’s GDP is tipped to grow 8 percent in 1996, compared with 8.1 percent last year, according to global investment house Crosby Research. GDP per capita had grown to about $800 in 1994. The government aims to quadruple this over the nest 24 years. Crosby has identified Indonesia and the Philippines as the region’s “best new growth stories because of deregulation and side boosts to growth potential. The World Bank includes Indonesia in its list of “high performing Asian economies’,” said the research firm.

Ng Bok Eng, a regional economist with Deutsche Morgan Grenfell in Singapore, has said that recent wage increases in Indonesia-with a population of 196.5 million-will lead to higher purchasing power. A growing middle-class accounts for as much as 16 percent of the urban population.

Indonesia’s private banks have increasingly looked to this growing middle class for business, “beefing up their offering of credit cards, debit cards, home mortgages, auto loans, personal loans, telephone banking and even personal account officers in cities throughout the archipelago,” The Asian Wall Street Journal reported.

“We expect the middle class to grow faster as the economy develops and as the corporate class continues to grow,” said a senior official of Bank Bali. “We can say in the next five years, the middle class will grow substantially,” he told AWSJ.

Ajay Jain, Titan’s commercial manager for international operations, was not so optimistic, saying that it was difficult to do business without official backing from the local jewelry trade association. “We had done our homework from India, but how can you do business without the trade?” he said.

Does Indonesia need a trade show? “It is better than nothing,” answered Menon, who was looking for a serious wholesaler. He said the World Gold Council had in the past provided Titan with “leads after the trade shows” and that this would be the case in Jakarta.

“They know the gold market. They know our good reputation, and 22K jewelry, and we have the capacity to supply to this market. We would think that diamond-set gold jewelry retailing over $1,000 here would do well,” said Menon.

Danny Si, director of Po Shu Jewllery of Hong Kong, said his company’s most expensive item at JOA ’96 was a $200,000 diamond platinum handmade bracelet with an “all natural” 15.89 carat Sri Lankan blue sapphire in the center, A 51 year-old Hong Kong craftsman with 35 years of experience took one year to finish the bracelet, which resembles a “Piaget” and required 378 baguette-diamonds, two trillions totaling 1.05 carats and two brilliants each half-a-carat. With officers in Japan and Taiwan, Po Shu may consider starting up an office Jakarta if the market is right, said Si.

“We could try, if the economy here is good,” he said. More than half of Po Shu’s production is platinum jewelry. The company’s marketing director Tony Lau, however, felt that it was very difficult to sell jewelry to Indonesia “at this time”.

Queeny Chan, manager of Hong Kong universal Jewellery, has dealt with Indonesian buyers at Hong Kong’s trade shows, and she felt it was time to survey the market here for herself.

“Indonesian like our platinum Art Deco styled diamond brooches, priced from $2,000-$20, 000,” she said. Brooches that depict butterflies, leaves, and flower heads with faceted and cabochon rubies, emeralds, and blue sapphires do very well. Jewelry sets from HK$20,000 to HK$1 million could also prove popular with rich Indonesians who love to dress up. “Jewelry sets are very big in Asia’s high society,” said Chan.

Kenneth Y M Kwan, manager of Universal Jewellery design Center of Hong Kong, says he’s looking for a retailer. “We hope to do some good contact. I believe that market is good. Fr colored stones, Indonesia buys from 5-20 carats. For diamonds, Israeli-cut diamonds, VVS clarity. White diamonds,” he said.

Universal Jewellery Design Center’s jewelry is still manufactured in Hong Kong, says Kwan, whose company sources rubies from Thailand and blue sapphire From Sri Lanka. Universal Jewellery Design Center does excellent work with pink and yellow diamonds in pave’ setting for rings and matching earrings. Floral clusters and bridal platinum diamond rings were shown, but Indonesians were drawn to the bigger pieces. Interest in the company’s South Sea pearl jewelry was flat, said Kwan.

Chains Agopian of Hong Kong based Sujewell International said he was encouraged by the strong interest shown in his company’s jewelry. “We came to Indonesia to show people that we are here, and that we will be here. We have some connections, and we’re hoping to build on this,” he said.

Himself a designer, Agopian showed some rounded European styled women’s rings using fancy cuts amethysts, citrine, blue topaz and pink tourmalines. Conservative designs are very nice and all, but modern ones deserve to be tried out by more women, including Indonesians.

The Indonesian market wants diamonds in G- and H- colors and VS1 clarity and better, said Agopian, Fancy cut diamonds are also gaining in popularity. Are you the distributor and wholesaler he’s looking for?

Bhupen Sarani of sugem says he can offer competitively priced diamond jewelry as Sugem is a sight holder and owner of eight cutting factories in India. “We are cheaper. Our jewelry’s price range is from $200-$25,000 per piece, while loose diamonds are from $100-$2,000 a carat. We’re looking for big manufacturers in Indonesia, and would like to have some collaboration,” said Surani.

Maximiliaan I Mager of ODTC International urged interested buyers to go to Bangkok where they can look over the goods they need at the Jewelry Trade Center’s bonded facilities. “It’s easier that way,” he says.

“No matter what, we plan to keep Thailand the diamond center in the Far East,” said Mager. Cut diamonds under 10-points are manufactured from ODTC’s Bangkok factory, while goods ranking from 10-points to 25-points are from their Smolensk production, Mager said. Market prices: six-pieces, $1,100 a carat; five-pieces, $1,300 a carat; four-pieces, $1,600 a carat.

“For Indonesian retailers, we give them Bangkok’s best prices,” Mager added. “We always promote Thailand. Buyers should go to Thailand, even t buy pearls,” he said.

Norihiko Furuya of Tokyo pearl (Thailand) said there was consumer interest in his company’s black Tahitian pearls, at $800 apiece. “The people were interested in pairs and South Sea pearls of 14mm upwards,” he said. A strand of Australian South Sea pearls from 14mm to 16.7mm seen at Jewels of Asia ’96 was valued at $65,000.

An American vendor exhibiting faceted and non-faceted amber from the Dominican Republic complained about the$350 surcharge on each sale. “This negates the whole purpose of selling,” he said. “I believe there’s 53 percent tax on the import value of the goods. It’s a problem for me to sell $10-$1,000 amber bead necklaces. Our goods are gust not high-end,” he said.

Bhavik D Mehta, director of Diastar of Singapore, perceives Indonesia as a potential market. Like others, he’s hopeful of making the right contacts. “At this show’s preview night we met some VIPs we can work with later on,” Mehta said. His best stone at JOA ‘96 was a 5 carat, brilliant cut diamond from South Africa at $5,000 a carat. A Singapore based Israeli trader visited Diastar’s booth, and advised Mehta to re-cut a 3.55 carat, oval shaped fancy yellow diamond. “The Israelis are good at these things,” said Mehta. “Cutting away t bring out a more intense color and pushing up the carat price,” he added.

Sarjak Shah, managing director of Penang based StarDiam Exports, said he had “ a few o=potential contacts” and his company could “more or less cater to small retailers who go for bigger stones and large manufacturers [who] need small stones,” he said.

Rony Golan, Far East marketing manager for Israel’s Samuel Rozenbaum, was disappointed with the show. “We had high expectations, but it’s been a big nothing,” Golan said bluntly. “We have the goods, the requirements of the Indonesian market, but it is very difficult to deliver,” he added.

Young Kumar Vaswani of Hong Kong’s Diamante, previously with Jewels, has started his own jewelry company. At the Jakarta show, he discovered that Indonesian women were accomplished “negotiators”. They bargain, and bargain, and bargain…A good price point for diamond gold jewelry was 3 million rupiah ($1,300), said Vaswasni.

“Traders should come to Indonesia and evaluate the country’s potential,” urges William Lee of Interface. “If they have never tried to make a move to Jakarta, then they’ll never know. Half a million of Jakarta’s 9,000,000 population are considered affluent. They’re the ones who normally fly to Singapore to shop. The early birds will catch the worms,” he said. Next year’s show is scheduled from May 16-18 at the same venue.