Ven 8 Fév 2013 19:37
Gemfields Sees $10 billion Colored Gemstone Market In 10 Yea
"We're going to replicate what [De Beers] did right and do it better and see what they did wrong" and avoid those pitfalls, Mr. Harebottle said in an interview on the sidelines of the Mining Indaba conference.
De Beers, the world's largest rough diamond producer, launched an intense advertising campaign in 1939 which transformed the diamond and jewelry business. De Beers is credited for sponsoring the slogan "A diamond is forever" and the concept of an engagement ring as a diamond ring, which helped catapult the diamond industry into a $71 billion market as of 2011, according to consultancy Bain & Co.
Polished colored gemstones such as emeralds, rubies and sapphires, were only an estimated $2 billion market in 2012 by comparison, said Mr. Harebottle, noting that gemstones were equally as renowned as diamonds before the De Beers marketing campaign.
He expects the colored gemstone market could grow to $10 billion in 10 years time through marketing. "We would be happy with that," he said, adding that he sees colored gemstones and diamonds as complementing each other rather than in competition with each other.
Gemfields, which currently accounts for about 20% of the world's emerald production, completed the acquisition of jewelry brand Faberge for $89 million in stock and cash last month. It plans to use Faberge as a way to market its gemstones in the high-end luxury market, although it won't be the only channel for marketing, Mr. Harebottle said.
Only about 1% of Gemfields total production will be sold via Faberge, the brand that bares the family name of the jewelers of the Russian Czars, he said. The rest would be marketed under Gemfields to other jewelers through a branding based on ethically-sourced gemstones. Gemfields has stakes in operating assets in Zambia and Mozambique and exploration assets in Madagascar.
Mr. Harebottle said the Faberge brand will help the company achieve a 30% premium on the 1% of gemstone sales channeled through the premium brand over a three-year period. Faberge currently has five stores and is targeting an average opening of two stores a year over the next 10 years, reaching 71 by 2033. Gemfields expects to earn a profit from Faberge within 18 months and plans to spend about $6 million in advertising in 2013, up from $1.5 million the previous year, said Mr. Harebottle.
On the mining front, the company plans to start producing rubies from its mine in Mozambique this year and is seeking to acquire more gemstone mines, including a sapphire mine either in Sri Lanka Kashmir or Madagascar, the key producing regions for such stones, said Mr. Harebottle.
The company more than doubled its sales to $83.7 million in 2012 from $40.1 million a year before and more than doubled its earnings before interest, taxes depreciation and amortization to $54 million from $22.3 million.