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B. Vijaykumar to enter into diamond mining

Latha Venkatraman

MUMBAI, Sept. 18

B. Vijaykumar & Co, a major diamond exporting firms, is getting into diamond mining operations.

A closely held partnership firm, B. Vijaykumar & Co has entered into a joint venture arrangement with Oropa Ltd, an international diamond mining company in South Africa and the Madhya Pradesh government for making a foray into mining operations.

Under the arrangement, B. Vijaykumar & Co will hold 70 per cent stake, Oropa Ltd 20 per cent and the Madhya Pradesh Government the remaining 10 per cent.

The company has already been allotted land measuring 5,000 square meters near Raipur in Madhya Pradesh. The company bagged the project through a tender process.

Mr. Bharat Shah, one of the partners of B. Vijaykumar & Co said, ``We have already commenced operations at the site. A sample has already been taken out and sent for testing to South Africa.'' He added that his firm has already ordered the equipment wort h Rs 15-20 crore required for diamond mining from South Africa, which has the technology for diamond mining.

For a firm that is primarily in exports of loose diamonds apart from diamond-studded jewellery, backward integration into diamond mining is seen as the most pragmatic move. It is the first Indian diamond processing company moving back into diamond mining , Mr Shah said.

With a turnover of Rs 500 crore, B. Vijaykumar & Co is among the leading exporters of loose diamonds.

``The biggest advantage in having our own mines is that we can earn hard currency,'' Mr Shah said.

Out of every 10 diamonds cut and polished worldwide, nine are processed in India. In value terms, the country's share is about 55 per cent.

However, the mining process would become fully operational in two years, Mr Shah said.

B. Vijaykumar & Co's associate company B. Vijaykumar Jewellery Private Ltd, which is mainly into diamond-studded jewellery, is looking at the possibility of entering the retail market in India. It is likely to enter the Indian market with the brand name `B.V. Diamond', which is its brand for its overseas jewellery pieces.

``There is a lot of potential in the domestic retail market. However, there is a certain lack of awareness about diamond jewellery,'' Mr Shah said.

The jewellery market overseas is also largely untapped especially in the $ 50-100 per piece range, he added.

India's share in the world jewellery market is around 1.25 per cent and most of the exports head to the US. According to Mr Shah, Japan accounted for a large portion of the world jewellery market. However, recession in that country has led to a decline i n purchases but a recovery is in sight.

His company is also looking at the possibility of entering into the manufacture of platinum jewellery. Japan is the leading market for platinum jewellery.

Platinum jewellery is also being introduced into the Indian market. Platinum Guild International, the jewellery marketing arm for the worldwide platinum industry, is launching the precious metal in jewellery form in India shortly and has entered into a m arketing arrangement with jewellery manufacturers and retailers.