Chirakitti Tang, a pioneer in the Thai diamond industry, is also the charter president of the two-year-old Thai Diamond Manufacturers’ Association. In the following interview, he gives a brief history of the diamond industry here and speculates about its future.

 

JewelSiam: Your family has been involved in the colored stone business in Thailand since 1958. How and when did you become involved with diamonds?

 

Chirakitti Tang: We were cutting rubies and sapphires in Thailand and I started thinking, “Why can’t we cut diamonds?” I made a few trips to Belgium and Israel and we got started with diamonds about 12 years ago. Then I met an official from the Bonas Co, one of the five brokers for the Central Selling Organization and he was interested in seeing the diamond business start in Thailand. At that time, the CSO was also interested in Thailand becoming a cutting center. So that’s how it all started.

 

JS: How did the Thai Diamond Manufacturers’ Association develop and what is its purpose?

 

CT: The diamond industry really got started in Thailand about ten years ago. There were about four or five factories and we all thought we should get together. It began informally with us meeting over dinner and discussing our views. Mostly we talked about customs regulations and acted as a go-between with factory owners and the government. It was a new business here and the government didn’t understand the needs—what machines should have what tax, things like that. We would exchange experiences at these dinners and try to help each other.

            When the industry grew to ten or 12 factories, we decided the group should become more formal and we created the official association, which serves as a central body to negotiate with the government.

 

JS: How does the Thai diamond industry compare to those in other countries?

 

CT: I think the industry here is one of the best organized in the world. In most other countries, the industry is made up of many small factories with ten, 20 or 30 people working there. Thailand consists of big factories and all are very well organized. The local owners all knew each other before from the colored stone industry.

            About 60 percent of the factories have foreign owners, but they are well integrated with the locals. I think the TDMA did its part in this regard. If anybody has a problem they come to the association and bring it up before things get out of hand.

 

JS: What are some of the major problems?

 

CT: One very important issue is our agreement within the membership not to take workers from each other. There are no experienced workers here so everyone must train their own. There were a few cases of some factories taking other people’s workers and we called these factory owners in and said this is not right. We all agree now that this is something we should not do; otherwise there would be confusion in the industry. It’s a financial investment to train someone Also, if you take somebody’s workers, then somebody else will tale yours. That may drive up wages and make the cutting charge higher.

JS:  Is it legal in Thailand to have such a regulation?

 

CT: We really did not make a regulation. It’s just something that we requested our members not to do and we all agreed it’s something we should abide by.

 

JS: Is this policy fair to the workers?

 

CT: It’s fair to the workers because when they come to the factory they know nothing about the trade and I think the working conditions in most diamond factories are far better than in other industries.

 

JS:  Does the TDMA plan to start an employee training program to try and alleviate the labor shortage?

 

CT: No, we don’t. If you set up a training center, how would you distribute the workers? If anyone is thinking of setting up a factory, he should develop his own training program. This is part of setting up a factory. If a worker wants to learn to cut diamonds he can just go to a factory and apply. Any factory is willing to accept new workers for training.

 

JS: Have wage increases in Thailand been a problem for diamond manufacturers?

 

CT:  We can still tolerate them. It’s still much better than wages in Israel or the US. Wages are a very small percentage of the price of the stone.

 

JS: What is the percentage?

 

CT:  Maybe 5 or 6 percent.

 

JS: How does the level of cutting technology used in Thailand compare with that of other countries?

 

CT: New technology is needed only to solve some special problems like those created by expensive stones. What we work on in Thailand is mostly 15 pointers and below and I think you still have to do those by hand.

           

JS: What are the main goals of the TDMA this year?

 

CT: We will try to get across to the Central Selling Organization that Thailand needs to get larger rough because we think we know how to cut bigger sixes. We have customers that are willing to buy larger sizes from us. That’s the main discussion we’re having with the CSO. We will also try to attract new factories here. The more factories we have, the better for the trade because people have more to select from. We now have 30 factories.

 

JS: A bout how many new factories do you expect to open up here within the next five years?

 

CT: A good guess would be ten. We’ve almost peaked in the number of factories, but most of the existing factories are expanding rapidly. The number of workers will increase a lot. We have around 7,000 workers now and during the next five years that number could double.

 

JS: What makes the Thai diamond industry unique?

 

CT:  We’re cutting from 15 pointers down and the quality of the cut is very good. That makes us quite unique. The same size stones are also cut in India, but they are not as good in quality.

 

JS: What is the main market for Thai-cut diamonds?

CT: I think it’s everywhere now—Japan, Europe and America. Good quality sons are accepted any-where.

 

JS: Do you think Thailand will develop into a major world diamond center?

 

CT:  I think we are a world diamond center already. Not a major one, maybe, but a small world center, I’m too shy to call it a major one but I think it’s becoming a big one.

 

JS: Do you think within the next five years Thailand will become a major world center?

 

CT: I think it should, yes. I see that everything is ready. I think more foreigners will think about coming here. With the favorable conditions we have I see a big future for Thailand in the diamond industry.

 

JS: A recent trade delegation from Antwerp’s Diamond High Council said it was unrealistic for Thailand to hope to become a major world diamond center within five years.

 

CT: We don’t expect to be number one. There’s no place like Belgium. New York, India and Tel Aviv are diamond centers but they don’t compare with Belgium. Thailand is happy to be one of five or six center. We think we can be a major center in the Far East and this could be a major consuming part of the world.

            A center is where you manufacture and trade. I think in these two categories we can serve the purpose in this part of the world and we can help serve Europe and America.

            Right now we’re only cutting smaller sizes but we’re doing well. We have a reputation for honesty and good quality and we’re trying to expand to larger sizes. The two together: if you start doing a bigger range of stones then more trading will be activated.

 

JS: Does Thailand need revisions in its banking system specifically for the diamond industry?

 

CT: Yes. The diamond business is different from other industries and it’s new to the banks here, but I don’t think it will be difficult for them to adapt. Already a few banks have started studying the needs of the diamond industry. In October, the manger of the diamond industry. In October, the manager of the international diamond division of ABN Bank in Antwerp will hold a seminar for bankers here.

 

JS: Does the TDMA conduct studies on the needs of the industry here and try to develop a master plan to benefit the trade?

 

CT: We do not make formal studies. Diamond people—not just in Thailand, but all over the world—are very secretive. I can’t tell you how many scaiving machines each member has or anything like that. I never walk into other people‘s factories. I feel they don’t want me to look at them—and I don’t want them to look at mine.