Tough Market May Prompt Small Indian Diamond Units to Close Early
October 04, 11
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Lackluster demand has also hit many Indian jewelry fabrication units catering to the domestic market. “Usually, you don’t get time to even eat a meal at this time of year,” said one diamond dealer. “Now, however, diamond dealers and many jewelry manufacturers are sitting around with time on their hands.”
With no inventories of rough and almost no economic staying power, the smaller units may have no choice but to shut early and stay closed until the situation improves. Normally, Indian diamond cutting and polishing units work in earnest until two or three days before Diwali and then close for around 20 days of vacation. This year however, the smaller units plan to close three weeks before Diwali, celebrated on October 26.
They will close on Friday just after the festival of Dussehra, and stay closed through Diwali.
Units would normally close around October 23 and reopen by November 15. Market sources say the small units will not only stay closed from now until November 15, they might stay closed through to the end of November if the pricing situation and movement of goods do not improve.
“It is a tough call to make,” said GJEPC Vice Chairman Sanjay Kothari. “Nobody wants to keep a unit closed for an inordinately long period because when you reopen after a long closure, you won’t get back your skilled workforce. They would have long since moved to something else. It’s economic survival. But if you are a small unit and losing money heavily, you might not have much choice in the matter.”
Kothari pointed out that the larger units, particularly those holding rough inventories, would probability keep going as usual until just before Diwali. These units are also not likely to stay closed overly long because they do not want to risk losing workers.