Date:30/12/2004 URL: http://www.thehindubusinessline.com/2004/12/30/stories/2004123002100200.htm

Back Rajesh Exports plans diamonds, retail foray

Our Bureau

Ahmedabad , Dec. 29

RAJESH Exports Ltd, the Rs 3,000-crore gold jewellery maker, has announced plans to enter into retail business with a dedicated chain of jewellery stores, as also plans to enter into diamond products.

"We have chalked out a Rs 800-crore expansion plan that involves setting up 100 jewellery stores in the southern States at a cost of Rs 450 crore. We are also investing Rs 70 crore for our diamonds foray and have put aside $50 million (Rs 220 crore) to acquire gold mines in either Australia or South Africa," Mr Rajesh Mehta, the Chairman of the Bangalore-based company, told Business Line here.

Rajesh Exports has traditionally been an outsourcing outfit for gold jewellery and claims to be the largest facility of its kind in the world. But for the diamonds business, the company has decided to chart a different course and plans to establish its own brand in the global markets.

"We are not harping on the labour cost advantage offered by India. We are seeking to create a truly international brand of diamond jewellery. We are willing to spend whatever it takes to carve a name in the international market, but we will not dilute our brand," Mr Mehta said, adding that the company has already created a range of designs of diamond jewellery.

The company plans to initially tie up with large-format stores for selling its branded diamond jewellery. In the second phase, it plans to open stores in the international markets as well.

For the domestic retail foray, Rajesh Exports will initially target the south Indian market and then expand across the country. "We have not yet decided on the brand name. But most likely, it will be two brand names, one for the international markets and one for domestic sales," Mr Mehta said.

Rajesh Exports wants to become a fully integrated jewellery player and is scouting for captive gold mines in South Africa and Australia that will feed its Bangalore facility.

"We are in talks with several people and hope to have our own gold mine by next financial year," he said.

During 2003-04, the company's topline crossed Rs 3,000 crore against Rs 226 crore in the previous year. Net profit during the period rose from Rs 7.37 crore to Rs 27.31 crore, Mr Mehta said.