EconomyNext – Rising domestic incomes and buying by tourists and growing exports indicate Sri Lanka’s jewellery industry has strong growth potential, an industry official told an international forum in Colombo.
Gems and jewellery are now the fourth largest export product with the jewellery industry alone having an estimated annual value of 200 million US dollars, said Chanaka Ellawala, a former president of the island’s Gemmologists Association.
Jewellery making in Sri Lanka has been improving with the island now exporting to some of the most discerning consumer markets, like Switzerland, Germany and Japan, an indication of its standards, Ellawala said.
“From gourmet tea to designer label apparel and boutique hotels, Sri Lanka is earning a reputation for luxury,” he told the International Colored Gem Stones Congress.
The event, which is attended by top international buyers, manufacturers, marketers and suppliers from all over the world, is organised by the International Colored Gemstone Association, a think-tank which serves the global colored gemstone industry.
Several exporters had established production links with international brands, which is testimony of the capacity of the industry to compete and develop to the highest level, he added.
In the past three years, per capita income has grown at 7.5 percent, tourist arrivals have been growing at 24 percent and jewellery exports growing at 22 percent.
“These three important indicators signal the outlook for the three market segments,” Ellawala said. “All point strongly towards growth in the next few years.”
“Our next major milestone is to reach a billion dollars in export revenue for which value added jewellery manufacturing must grow exponentially,” he said.
Nearly every single Ceylon sapphire traded anywhere in the world is now cut in Sri Lanka, which was not so in the past, he said. “Our aim is to ensure jewellery with sapphires are made in Si Lanka too.”
There has been rapid growth in the jewellery industry in the past three years suggesting the sector is opening up, he said.
Imports of jewellery and findings, additional components that join pieces of jewellery together, shot up 215 percent in the three years between 2012 and 2014, he said.
Ellawala said the industry caters to three market segments – exports, domestic and the tourist market.
The island exported 20.6 million dollars worth of jewellery in 2014 although the estimated annual value of the jewellery industry is 10 times greater.
The value of sales to tourist in 2013 was 72.6 million dollars while the domestic jewellery market is estimated at around 100 million dollars.
“22 carat gold jewellery is bought not only as a status symbol but also used as an investment and a mortgage instrument to raise cash in hard times,” Ellawala said.
Most commercial banks issue loans based on jewellery as collateral with the pawning business estimated at 2.5 billion dollars and accounting for 14.4 percent of retail lending by commercial banks.
The island now has 100 lapidaries and four diamond cutting factories with 27 production unit having over 100 employees of whom 30 percent were female.
“There’s much scope for lapidaries in future,” Ellawala said.
“The increased female participation in this traditionally male dominated industry is another indication of the transformation of the jewellery manufacturing sector.”
Altogether there were 1,480 jewellery businesses registered with the National Gem & Jewellery Authority of which 345 firms were exporters.