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Tiffany to polish diamonds

Tiffany to polish diamonds

Luxury jewellery brand Tiffany & Co is building a diamond-polishing factory in Phnom Penh, as the company, which has enjoyed increasing sales, seeks to ensure it can continue supplying the diamonds it needs.

Construction began last month on the 1.2-hectare factory, along with a training centre, in the Phnom Penh Special Economic Zone (PPSEZ), said Sotheary Chap, business development manager of the Archetype Group, the architectural firm involved in construction.

“Cambodia has no diamonds; the factory is just a platform” to process the diamonds, she said, declining to reveal construction costs or when operations would start.

Tiffany & Co, which reported net sales of $3.8 billion last year, up from $3.64 billion in 2011, expects to purchase about $200 million worth of rough diamonds this year, according to its US Securities and Exchange Commission (SEC) filing last month, from countries such as Australia, Russia and South Africa.

These diamonds are then sorted, cut and polished in facilities owned by Tiffany’s subsidiary, Laurelton Diamonds, in countries including Belgium, South Africa, Botswana and Vietnam. Some of the facilities are on leases that will expire as early as this year.

The Cambodian factory will be headed by Graeme Currie, who is also Laurelton Diamond’s Vietnam director-general, his secretary said. When contacted by the Post, Currie said his company “has a strict policy with regard to press interaction”, stipulating that he cannot comment “without prior approval”.

According to its SEC filing, up to 60 per cent of the polished diamonds used in Tiffany’s jewellery are produced from rough diamonds bought by the company.

Tiffany & Co intends to “continue to supply the majority of [its] needs for diamonds by purchasing and polishing rough diamonds […] to maintain substantial control over product supply”, the filing said.

However, the filing also notes that “The risks of doing business inter-nationally could increase [the company’s] costs, reduce its profits or disrupt its business.”

In regard to concerns about the security of diamond deliveries, PPSEZ managing director Hiroshi Uematsu said Laurelton Diamonds “has a special logistics company to take care of its operations” of transporting the expensive stones.

Last year, Andrew Hart, senior vice-president of Tiffany & Co’s diamonds and gemstones division, met with Minister of Commerce Cham Prasidh to discuss possible investment opportunities in Cambodia.

Cambodia is listed as a participant in the Kimberly Process, which, acc-ording to its website, is a UN-initiated movement against conflict diamonds.

This means diamonds traded in Cambodia - including those from Tiffany - cannot finance violent rebel movements against governments.

Tiffany appears not to be the only diamond-polishing company in the Kingdom. According to the PPSEZ website, South-Africa based comp-any KMG Diamond has a 2.6-hectare plot in the economic zone to carry out diamond-polishing activities.

KMG Diamond could not be reached for comment yesterday.

Cambodia’s precious-stones ind-ustry, although small, is growing. The fifth Cambodia Gems and Jewellery Fair, in June, is expecting a 12 per cent increase in visitors and exhib-itors, according to a press release.

In 2011, Intertek, a London-based quality-checker of rare gems, established the country’s first gem labor-atory to help regulate, and provide guidelines for, the gem trade.

According to Tiffany’s SEC filing, the company intends to increase retail prices in 2013 because it “did not take retail price increases in 2011 and 2012 sufficient to offset commodity cost pressures the company has continued to experience.”

Additional reporting by Sarah Thust and Anne Renzenbrink

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