Models strutted down the catwalk wearing sparkling necklaces and bracelets, a packed audience looking on. The lavish show marked the kick-off yesterday of the 5th International Gems and Jewellery Fair in Phnom Penh.
Lighting up the otherwise drab halls of the Diamond Hall Convention and Exhibition Centre, the flash and fashion were both part of Cambodia’s image of itself as an emerging player in the global precious stones trade.
“The gems and jewellery industry, apart from being one of the key trade promotional areas in Cambodia, is playing an important role in attracting tourists and complementing tourist activity,” Minister of Commerce Cham Prasidh said in his opening remarks.
“We believe that going forward, with the many tax preferential or tax-free treatments extended to Cambodia as one of the least developed countries by many developed nations including the United States, gems and jewellery traders around the region might move their base to Cambodia to take advantage of the reduced tariffs on imports.”
Whether that will happen is uncertain, but recent developments indicate that Cambodia is at least going in the right directions.
Prasidh described the fair as the most important stage for industry leaders to position themselves as major suppliers. The Cambodian vendors at the expo, who accounted for the majority of sellers, were eager to broadcast the same message, saying that the the raw materials are in place for the sector to develop.
In September 2011, Intertek, a quality checker and certifier of precious stones, established a laboroarty in Cambodia that was supposed to be a new level of professionalism and access to the market.
Cambodia successfully lobbied to join the Kimberlay Process, a United Nations-initiated movement whose members vow to shun the trade in so-called conflict diamonds.
This past March, construction began on a diamond-polishing factory and training centre for luxury jewellery brand Tiffany & Co in the the Phnom Penh Special Economic Zone.
Intertek’s laboratory manager, Kabir Grover, said the industry needs four or five years to make it and be recognised on the international market.
He called the lab an accelerator for exports, since it will increase trust and confidence in the Kingdom’s gem and jewellery products.
“The market is still slow and it will take time for the industry to grow,” Kabir said, “We are trying to educate local venders to know the benefit of getting certification which plays a key role to build confidence for buyers.”
Despite the fanfare about the industry’s potential and its shiny prospects, Cambodian traders and local venders, who accounted for the lion’s share of the 78 stands at the event, were not able to provide any figures relating to the level of demand.
Dy Ly, owner of Pailin Dy Ly Gem shop, said most gemstones in Cambodia are traded within tight-knit family businesses, and the level of production is not that high.
“Many of Cambodia’s jewellery and gems are sent across the border for processing in Thailand, or if it is locally produced, for instance, gem cutting, polishing and designs are commonly done by hand,” Ly said
Grover said that because of the traditional production practices, jewellery and gems are seen as unreliable, scaring away international traders.
According to a report by KPMG, global jewellery sales will grow at 4.6 per cent year-on-year. The global jewellery market could reach $280 billion in 2015, up from $185 billion in 2010.
While the US remains at the top of the table with 30 per cent of the total market share, the report found that India and China are gaining ground.
By 2015, China is expected to see about 22 per cent of the daimond processing market.
“I have been selling gems to many ASEAN countries, and the Chinese market is the largest orderer of my product,” said Tay Heab, a local gem trader.
He said that the price of gems has slightly increased compared to prices last year, and orders for products from from his shop are also on the rise.