While much of Thailand’s industrial prowess is based on efficiently assembling high-demand products for large international corporations, its burgeoning jewellery sector has evolved from strong tradition of artisan craftsmanship into one of the world’s leading jewellery production centres. According to the Board of Investment (BOI), Thailand is the world’s largest producer of silver jewellery, as well as ranking in the top-five diamond cutting and polishing centres. All told there are more than 1600 businesses active in the industry sector including hundreds of international enterprises.
FACTS AND FIGURES: For 2011 this translated into total gem and jewellery exports worth BT371.24bn ($11.82bn), up 1.21% over the BT366.82bn ($11.7bn) registered in 2010 according to data from the Gem and Jewellery Institute of Thailand. Of this 2011 total, base metals and semi-manufactured jewellery made of gold, silver and platinum garnered the largest share worth BT181.85bn ($5.8bn), down 11.51% over the previous year. Balancing out this decrease, precious stone exports increased 25.19% in 2011 to BT66.11bn ($21.09bn), while completed jewellery and other finished articles increased 13.61% to BT123.28bn ($3.93bn).
DESTINATIONS: Switzerland was the primary importer of Thai products, accounting for 31.67% of all jewellery exports in 2011, followed by Hong Kong, with 20.2%. The US was the third-largest, with 13.01% of total jewellery exports behind the first two high-end markets, although year-on-year imports were up 22.41% compared with 8.51% growth for Switzerland and a 3.87% decrease for the primarily high-end markets of Hong Kong. Other important markets were Australia, with 6.14% of total exports, India (3.59%), Belgium (3.15%), Japan (2.84%), Denmark (2.63%) and Germany (2.33%).
While these exports accounted for 5.38% of the country’s total, the value of gem and jewellery imports skyrocketed 86.7% from BT337.33bn ($10.76bn) to BT629.81bn ($20.09bn) over the same period. The value of these imports reflects the rapid growth of precious metal commodity prices on global markets, which spiked as investors and speculators are buying heavily seeking a safe haven during recent financial uncertainties. Imports of base metals and semi-manufactured jewellery made of gold, silver and platinum increased 89.55% to BT34.3bn ($1.09bn) over the previous year, while precious and semi-precious stones ranked second, at BT69.63bn ($2.22bn; up 90.97% over 2010) and completed jewellery and other articles accounted for BT25.88bn ($825.57m; up 24.35%) GEMOPOLIS: In order to help promote the industry, the government has also supported the establishment of the Gemopolis Industrial Estate, the only industrial estate in Thailand specialised for the gem and jewellery industry and which gives participating companies numerous free zone benefits including tax breaks, relaxed foreign ownership regulations and pre-built infrastructure. Established in 1990, the site was created specifically for the diamond, gem and jewellery sector and as of 2011 included 135 companies, of which 90% are foreign from a total of 26 countries. The 800-rai Gemopolis estate is now embarking on its second stage of development (stage one encompasses 172 rais), which will include a new BT300m ($9.57m) expansion.
In addition to the numerous international outfits working out of the Gemopolis complex, the Danish jewellery brand Pandora has also set up its jewellery manufacturing base in Thailand. While it might not yet be the household name like a Tiffany or Cartier, Pandora has steadily increased its reach and volume to become the third-largest jewellery producer in the world. The company now operates four production facilities domestically, which supply its network of 10,500 points of sale in 65 countries.
Despite the continued gains from the sector, financial difficulties have hit Thailand’s biggest export destinations in Europe and North America hard, while simultaneously driving up raw material prices. These effects are compounded by the erosion of jewellery for status/aspirational purchases at the expense of gadgetry such as smart phones and tablet computers.
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