Thailand's secrets in jewelry industry bared

Thailand's secrets in jewelry industry bared

WHAT are the secrets of Thailand's fine jewelry industry that it now shines in the world, hauling in for that country a hefty $3 billion in cash each year?

Answers to this puzzle were shared by Lyhz Galang, ERP manager of Naviworld Philippines, during the recently held 4th National Jewelry Forum. Naviworld is a management consulting company that has spent eight years in Thailand helping many of its jewelry manufacturers automate their processes and systems.


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In a little more than a decade, Thailand has emerged as China's chief Asian competitor in the global trade of fine jewelry. It started almost the same time the Philippines was coaching its underground jewelry-making guilds to go over-ground in the early 90's.

Galang told Filipino jewelers gathered by the Confederation of Philippine Jewelers Inc. (CPJI) that for starter, the Thai government gave liberal tax incentives to investors who were willing to put up large production facilities. Then it opened two special export zones that specialized in hosting only jewelry manufacturing companies.

The twin government strategy was calculated to address two major issues confronting jewelry makers worldwide: the lack of domestic capital in an industry that uses expensive gem stones and precious metal, and inability to mass produce tiny but expensive rings, necklaces, bangles, earrings and more recently, navel rings.

With the special zones opened to foreign investors, Thai entrepreneurs sought foreign partners, particularly the known jewelry makers in France and Italy. When the foreign jewelry-makers took the bait, they also brought in state-of-the-art techniques and the machinery of producing quality jewelry items in large quantities.

The Thais, even if only a few of them spoke good English, joined international trade fairs displaying the best of their glittering goods and kept on cornering more orders. From a few million dollars in sales at the beginning, the Thai jewelry industry proved to be a winner. By last year, the industry has become the second biggest exporting industry in Thailand.

The development strategy worked despite the fact that Thailand did not have any gold deposits from where to get the most important base metal used in jewelry manufacturing. It had been buying its gold from Hong Kong and Singapore that also imported the gold they traded.

The biggest gold producers in the Asian region were Indonesia and the Philippines.

Precious and semi-precious gem stones like jade, opal and pearl used as raw materials were mostly bought from neighboring countries like Burma, Laos, Cambodia and for cultured pearl, Japan.

In sharp contrast, the Philippines' jewelry export industry, despite the abundance of gold, silver, and other precious metals produced by local mines, plus natural and cultured pearls, grew at a snail's pace to peak at $45 million last year while that in Thailand was zooming forward. (Press release)


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(September 7, 2008 issue)