Industry analyst and consultant Anil Prabhakar had a freewheeling, candid conversation with Colin Shah, MD of Kama Schachter and the Chairman of GJEPC at the latter’s office in SEEPZ, Mumbai.
The full interview can be viewed on GJEPC’s You Tube channel. Following are the excerpts.
Anil Prabhakar: Mr. Shah, you are the first generation entrepreneur who started his career as a diamond sorter at 17 and became the Managing Director of Kama Schachter at 26. This is a spectacular career trajectory. Please share your journey with us.
Colin Shah: I am a doctor’s son. My brother is a gynaecologist and my sister is a Radiologist. I too wanted to be a doctor. I scored 99% marks in Physics, Chemistry and Biology. However, due to the change in Government’s reservation policy in the light of Mandal Commission’s recommendation, an entrance examination was introduced for getting admission to medical colleges. I got an admission to a medical college in Pune. There were rampant cases of aggressive ragging those days. I got a nervous breakdown as one of my close friends was a victim of ragging. I therefore decided to change course and completed my graduation from Sydenham College in Mumbai.
I evaluated various career options but didn’t find them exciting. Subsequently on the recommendation of Navin Jashnani of Sama Jewellery I did a diamond grading course. I must say I fell in love with diamonds and the industry and learnt the ropes of the business quickly. I then started B2B diamonds activity with a focus on South India. Due to the encouraging response the business grew. I decided to scale up and set up a factory. As I wanted to travel all over the world, I chose jewellery exports and SEEPZ as a location for my company.
Would you like to share some of the mistakes that you made in your career? What did you learn from them? How did you bounce back?
Like every entrepreneur, I too made a series of mistakes. My core competence is in B2B jewellery manufacturing. I deviated from my core and chased aggressive overseas expansion by setting up offices in Europe, Hong Kong and China, started a diamond manufacturing unit in Gujarat and dabbled in retail too.
These initiatives affected my business as I lost money. I had spread myself too thin. This realisation led me to discover the power of focus and identify my core competence i.e. B2B diamond jewellery manufacturing. This learning from my mistakes helped me get back on track.
Some of the factors that will remain constant in the future are the importance of design, quality, service and the power of relationships. We at Kama will therefore concentrate on these areas and strive for excellence.
The GJEPC has hailed the recent budget as growth-oriented. As Chairman of the Council, could you explain how the e-commerce policy, the SEZ policy and reduction in the import duty on diamonds and gemstones will boost exports?
India’s robust gem and jewellery sector has tremendous export potential to grow from $35 billion to $100 billion. We are the global leaders in the cutting and polishing diamonds. Further growth in exports can come from the increase in diamond prices and from the recycling of diamonds and gemstones. All over the world, consumers want variety. They want to exchange or return their old diamonds and jewellery. These diamonds need to be re-cut and re-polished at a low cost destination. Due to the high import duty, we are losing the business to countries like the UAE. The incremental business that can be generated is to the tune of $2 billion for diamonds alone. If you take into consideration pearls and other gemstones the revenue potential is even more. The current duty reduction will help India get a share of the recycling business. India has one of the highest import tariffs in the world on gold. We were expecting the duty on gold to come down to become competitive. While there has been no reduction this year, we are expecting the signing of Free Trade Agreement (FTA) with the UAE soon that will boost exports.
The announcement of e-commerce and SEZ policies are a step in the right direction.
The e-commerce policy details will be announced in June this year; it envisages exports through the network of Indian Post Offices. It will reduce paper work, time and costs. Jewellery manufacturers, traders and retailers will be able to export jewellery to 200 countries in the world.
SEZs contribute to 35% of our exports today. The SEZ policy to be announced in September aims to attract Foreign Direct Investment (FDI) to motivate overseas jewellery manufacturers to set up a production base in India.
The objectives of the GJEPC are employment generation and earning foreign exchange by promoting exports. Why then is the Council getting involved in domestic policy issues such as Hallmarking?
We are committed on satisfying the needs of our 7,000 members. All our initiatives arise out of and are focused on the members’ needs.
We voice their concerns to the Government. Whenever they face challenges on policy initiatives, banking, growing B2B business, education we are there to help them. Our membership base comprises primarily of manufacturers – 2,500 of them are exporters. The remaining 4,500 have domestic business.
In order to become successful exporters, the manufacturers need to be strong in their domestic businesses. Look at the leading exporting countries such as China, Germany and America. The companies in these countries are strong in their domestic markets. Apple wouldn’t be a global phenomenon without being successful in the home country. Same is true for German automobile brands such as BMW, Audi and Mercedes. In India too you can’t look at exports in isolation. The GJEPC therefore has to play an active part in the domestic market. We are incubating exporters by providing trade show platforms such as the IIJS. The success in the domestic business prepares them to participate in international shows.
Hallmarking is perceived as a local issue. However, we at the Council believe that a robust hallmarking system in India will open the doors for exporting hallmarked jewellery across the world. Our hallmarking system has the potential to become the gold standard because of the unique system developed by the BIS. Consumers anywhere in the world can by punching the HUID, access the hallmarking certificate. It’s incredible and doesn’t exist anywhere in the world.
The Indian Bullion Exchange (IIBX) has the potential to become the largest global trading platform besides making the gold import faster and cheaper for Indian players.
Please share your thoughts on GJEPC’s marketing communication and collaborations.
We at the Council felt the need to refresh our identity. We therefore decided to re-design the logo to make it younger, more vibrant and relevant to the millennials. The new logo makes the GJEPC appear younger and progressive.
We are the facilitators and platform providers to our members. We create a platform for our members to reach out and collaborate to export more. We work very closely with international trade bodies and are open to working and collaborating with domestic trade associations to further the interests of our members.
What‘s new at the upcoming IIJS Signature show that is scheduled from 18th to 21st February?
After a humble beginning as a small show in Goa in 2008, the IIJS Signature is now the second largest show after IIJS Premiere. With more than 1,000 exhibitors we expect 14,000 visitors to the show. There have been no major shows after the IIJS Premiere in Bangalore.
The show offers a wide variety of jewellery viz; Diamonds, Gold, Kundan, Polki, Silver, Couture, etc.
Visitors can plan their purchase for the upcoming Gudi Padwa and Akshay Tritiya festivals. There are hotel rooms on offer for select buyers. We have planned mega parties in the evenings and there is everything that you may expect from a trade show.