Ruby, sapphire demand up

Stones need added perks to sale

            In a time of turbulent change, stone dealers in Thailand are split on the forecast of the local market. Some have closed their doors, others have shifted from semiprecious sales to the reds and the blues, while still others have upgraded their in-house sales techniques and customer services.

            Most will agree, however, that the end-consumer is buying less of the semiprecious stones and more of the traditional, higher-priced, but still inexpensive ruby and sapphire pieces. “Semiprecious business dropped off considerably, but the precious business exploded,” says Jack Getter of Vardi Stone house.

            It is a trend that has been welcomed in Bangkok, but there is a downside—the continuing appearance of glass-filled Mong Hsu ruby [see JewelSiam Oct-Nov 1993], an issue trader has been up in arms about for more than two years because of its capability of damaging the market.

            “From the beginning I told people not to accept it because it will ruin our market,” says Wanthani Inkatanuvat, managing director of Premier Gems trading. “It is not good for our trade and you don’t have to do it.”

            Wanthani says if a trader doesn’t use glass-filling he gets 20 percent yield. However, the yield increases to 30 percent if glass-filling is used.

            This is, at best, a marginal profit for longtimers who value the trust of their clients.

            “I prefer that everybody stops using it [glass-filling], so people are not afraid of Burmese ruby,” she says.

            Bunlua Rundsakaolert of Blue Star trading, who is in full agreement, has recently moved more into blue and pink sapphire.

            Gary Du Toit, a gemologist at the Asian Institute of Gemological Sciences, says of the goods the laboratory tests each week, nearly 40 percent are ruby, of that between 60 to 70 percent are glass-filled Burmese goods.

            The glass-filling substance found in a cavity can be easily dissolved with hydrofluoric acid. Filling in a fracture, however, is more difficult and usually only the glass-filling near the surface can be removed.

            Sapphires, a projected strong seller this year, provide the consumer with a commercially marketed precious stone and a more hassle-free revenue for gem traders.

            Bunlua of Blue Star Trading is buying his range of sapphires from Cambodia, Africa, Vietnam and Burma.

            Pailin sapphires, which he buys in Chantaburi, are continuing to cross the border from Cambodia, according to Bunlua, but in lower quantity. The scarcity has driven prices for Pailin blues up 25 percent over the last six months, he said, but he would not quote prices.

            Nigerian sapphires are cheaper than Pailin goods by about 30 percent. However, the quality is lower. He picks these stones up from rough dealers who call on him in his office on Mahesak Road.

            Although top stones from Madagascar are available in a quality comparable to Ceylon stones, with strong color banding the consistency needed for large orders is not available.

            In Vietnam, Bunlua is picking up pink sapphire. Of the corundum mined there, not more than 15 percent is ruby red. The large majority is pink, Bunlua said.

            As a five-year veteran to Vietnam, bunlua consents that there were many problems in the initial buying stages. Now, even though he has a full slate of regular suppliers, he checks every piece, so as not to be duped with a synthetic.

            Wanthani of Premier Gems Tradings says she buys sapphire rough from Thailand and Australia. Ceylon sapphires are available, she says, but with rough prices exceeding the salable price of cut goods, she has discontinued using them. And the stone’s journey from Madagascar to Thailand is still too complicated and worrisome for her to become involved.

            The common semiprecious stones including citrine, amethyst, and aquamarine are still a factor in the local market, but their popularity is lessening, according to some traders.

            Consumers are opting to pay slightly more for precious, low-end stones or the more unusual stones. Relatively unknown stones such as scapolite, golden labradorite, morganite, iolite and moldavite are being sold by Getter of Vardi Stonehouse to a growing number of buyers.

            Moldavite, with the hardness of 5 ½ on the Mohs’ scaled, is a darker green than tsavorite. In gemological reference materials, it is commonly described as bottle green.

            Iolite, which has been less popular than tanzanite, is potentially a big player because of its availability, consistency and price. Getter advises that with tanzanite prices going up 10 to 15 percent every few months, traders are opting to buy iolite. For a 7x5 tanzanite the price is approximately $100-$120 per carat, while a similar, same size iolite stone costs $25 per carat.

            New on the market from Pinky Trading is blue and green hydrothermal corundum. Du Toit of AIGS says so far the pieces are not difficult to identify. Detection may, however, become more difficult with further refinement of the product expected by Russian synthetic producers.

            A large shipment of pink tourmaline slipped into Bangkok recently with color consistency unheard of in a big lot of pink tourmaline. Du Toit, who tested the material, says he was unable to determine whether the pieces had been irradiated, but that such a quantity of  untreated stones was unlikely.

            In addition to the pink tourmaline, Du Toit recently studied small-sized synthetic opals of pink and green. The owner of the pieces said natural-looking opal colors were available, which “has the potential to be dangerous,” says Du Toit. Production may be from Taiwan.

            Both Bunlua and Getter agree that it is not a depressed market, but a changing one. And for the traders willing to adapt and branch out, it continues to be a successful one.

            “The market is never worse, it just changes,” says Bunlua. “Some people think it is no good, but they don’t change with the market.”

            For Bunlua, that means always working to provide the best cut possible. Bulua does not spend money on the latest equipment; instead, he puts in many hours training his cutters to do top-quality work. Even cutters with ten years of experience are trained over again when they begin work at Blue Star.

            To set his operations apart, Bunlua catches the eye of potential buyers with unique cuts such as the square princess and trillion cut.

            “If the price increases, buyers don’t care,” Bunlua says. “They care about the quality and if you have the size they need and can give it on time.”

            With more than 100 cutters and 20 years experience, Bunlua says that even when business is slow, sales can be found. All it takes is a little ingenuity.

            “If you try to follow the market it isn’t enough. You have to open the market by doing something new,” says Bunlua.

            Bunlua, who often sounds like a primary school teacher preparing his students for life, advises, “If you do your best work, control quality and protect your customer, have what the customer needs and can give the product when the customer needs it,” you can keep your customers.

            Getter, on the other hand, is designing Vardi Stone house to be more service-oriented. He now offers a service to match sets for local jewelry manufacturers. By making match sets of color and size and delivering them to customers, he has increased business during a sluggish year.

            To stay ahead and in the game, Getter says, “We have to plan, we can’t react.”

            In September, the Bangkok office of Vardi Stone house stepped up an aggressive campaign to take a larger market share, and expanded its operations. Now the firm has two adjacent offices in the C S Building and has doubled its staff from 15 to 30 employees.

            Getter, who described December and January as “somewhat slow,” says sales during February had picked up. “February gave me a little shot in the arm.”

            Despite the growing optimism among traders that the Year of the Golden Pig will be a prosperous one, one company representative who misunderstood the reason for this reporter’s telephone call responded:  “Economy bad. Economy bad. Stock full. Stock full.” If stone were available, she was in no position to buy—a telltale sign of a company that had not changed with the times.—PATRICIA WIDENER

Tokyo pearl optimistic on future sales

            In January, Thailand adopted the ATA-Carnet System and slashed import duties across the board. Duties for natural pearls dropped drastically from 60 percent to 10 percent and duties on cultured pearls were cut from 25 percent to five percent.

            Prior to this much-welcomed move by the government, pearls were scarce in the local market. Now, more Japanese and Hong Kong pearl wholesalers are expected to arrive.

            One of the first is Tokyo Pearl (Thailand), a joint venture between Tokyo Pearl of Japan and Oriental Lapidary Group of Thailand. Tokyo Pearl opened its office on Silom Rd. last year and began canvassing high-end jewelers in Bangkok.

            Though the consumer market is quite savvy in its knowledge of gemstones, most retailers knew little on the pricing, value and quality’ of pearls. Managing Director Chirakiat Tang and Manager Kozo Kikumoto of Tokyo Pearl set out to overcome retailers’ doubts about pricing and salability. Gradually, the potential of  demand is winning over the skepticism of many retailers.

            “Retailers didn’t have confidence about the price. We find that many customers bought a little [initially] and now are buying more,” Chirakiat said.

            Thai consumers appreciate South Sea pearls of pink and white color, Kikumoto said. Akoya pearls are selling in Thailand in sizes 7 mm-9 mm, while South Sea pearls are selling in sizes 9 mm-18 mm. Akoya pearls are sold on a standard 16 inch string and depending on size and quality range in price from Bt10,000-Bt200,000 ($400-$8,000).

            Both executives agreed that Thai consumers have the capacity to buy Bt 100 million-B150 million ($4 million-$6 million) worth of pearls per month.

            After setting up its first joint venture in Thailand, Tokyo Pearl is planning to establish another joint venture in Hong Kong later this year.