South American Hustle: Inside Peru’s Ambitious Jewelry Export Program



Peru has more than 1,000 years of jewelry-making experience. A new program is designed to ensure U.S. consumers know that.

When talking about jewelry and Peru, the conversation inevitably turns to the Incas.

The Incas ruled Peru in the 1500s; they and their predecessors were known for their skill with metallurgy and ceramics. Even today, a large share of the Peruvian jewelry sold to the domestic market, and tourists in particular, invokes classic Incan iconography such as the sun and dragons. 

In the centuries since the Incas fell, the people of Peru have never stopped making jewelry, even if the outside world didn’t always know it. While Peru was known in decades past for its intricate weaving and filigree work, today it has been largely overshadowed in the industry by its eastern neighbor Brazil, admits Melissa Vallebuona, sector specialist for PromPerú, the government agency that promotes exports and tourism. 

What happened? Some point to political issues. Vallebuona blames the rising gold price as well as competition from centers with lower labor costs. But Peru has also become insular in its jewelry business. 

“Most of the jewelry companies have been focused on the domestic market,” says Juan Velasquez, sales manager of Linea Nuova, one of the country’s largest manufacturers. “But today, most of the opportunities are overseas.”

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Sterling silver butterfly pendant; $225Mitos Peru, Lima, Peru; 511-241-2402; ventas@mitosjoyeria.com; mitosjoyeria.com

Yet grabbing those opportunities will not be easy, despite the trade’s 1,000-year history. Earlier this year, PromPerú reached out to MVI Marketing, best known for developing the Indo Argyle Diamond Council, which helped put India on the map in the 1990s.

While visiting Peru this past summer, MVI co-owner Marty Hurwitz discovered that the country not only manufactures and designs jewelry and gemstones, but is home to mines that produce gemstones, gold, and silver. So he and his wife and business partner, Liz Chatelain, figured, why not take advantage of that?

Manufacturing and mining “can be done in-country, and the Peru government can track and monitor everything,” Chatelain says. “For jewelry, it’s unusual for everything to be so trackable. Since the government monitors [working conditions], it could be considered ‘Fair Trade.’ We know it’s not hurting people, but it’s also helping. The workers are benefiting.” 

The result: Peru Certified, a new brand that will sell local jewels as “100 percent made in Peru.” Chatelain feels the label could appeal to millennial consumers, who tend to favor products with both a story and an ethical provenance. 

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Bracelet in copper with oxidized silver wires; $56; Lorena Mena, Lima, Peru; 511-987-093-733; lorenamena.com

MVI plans a big push in 2016 to promote the Peru Certified program to the U.S. jewelry trade, including PR efforts, speaking engagements with industry organizations, retailer presentations, and trade-level advertising in the fourth quarter, Chatelain says. “This will be the year to get the word out about Peru and Peru Certified.”

Leading jewelry manufacturers have already indicated interest in the brand, as has one of the country’s largest miners, Buenaventura, listed on the New York Stock Exchange.  

“The program doesn’t help us from a commercial standpoint,” says Buenaventura CEO Roque Benavides. “But it gives you a better image. You can’t quantify how good it is for the company.” 

In October, MVI invited this reporter and a group of U.S. manufacturers and jewelers to Peru to look at the program and the country’s jewelry industry. While most travelers thought “mine to market” was a good hook, they did raise questions. First, what stones should go in the jewelry? Peru produces gems—including amazonite, blue-green chrysocolla, sodalite, rose quartz, and blue and pink opal. But those stones might be better suited for boutique or TV shopping channels, says one attendee, Keven Peck, president of New York City manufacturer Color Merchant. 

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Handmade silver bracelet with mother-of-pearl and onyx inlay; $347; Urin Huanca, Lima, Peru; 511-241-2510; urinhuanca.com.pe

As a rule, U.S. consumers prefer better-known gems—in particular the best-known one, diamond. This poses a problem in creating a mine-to-market traced product, as most gemstones and diamonds aren’t tracked. On top of that, even the stones that are mined in Peru typically aren’t cut and polished there.

“They don’t really have the mass cutting and polishing capability,” says another visitor, David Stein, vice president of New York City–based Leo Wolleman/Color Craft. “That’s a challenge, though it can be overcome if one of the big manufacturers is willing to make the adjustment.”

Peck also wonders about manufacturers’ ability to produce consistently. Peru has a handful of large companies that make items for Richline Group and QVC. But most of the product is silver and low-end fashion. “It’s great to say, ‘Yes, I can set diamonds. Yes, I can do it in gold.’ But what does the product look like?” he asks. “What is the quality like? Will the gold have porosity? Are the diamonds going to be set straight?”

Babette Goodman Cohen, chair of I.B. Goodman, a jewelry manufacturer based in Newport, Ky., saw a lot of “creativity of material and unique product,” but considers much of it expensive. Aside from the big companies, she found Peru’s jewelry manufacturing mostly a “cottage industry” suited to producing jewelry for boutiques.

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Sterling silver shark cufflinks; $180; Zaunick, Lima, Peru; sales@zaunick.com; www.zaunick.com 

Zina Sherman, owner of the silver brand Zina of Beverly Hills, Calif., already does business with one Peruvian company that makes jewelry from butterfly wings. “It’s done well,” she says. “No one is doing anything like that.”

But Sherman says Peruvian designers need to do more to distinguish themselves. “They have to do unusual things for us to have a reason to work with them,” she says. “A couple of them did get into the filigree, which is unusual. They are taking the filigree and modernizing it somewhat and still keeping the integrity of the filigree. No one in the United States is doing it the same way. But otherwise they are doing mostly what the market wants. And there are plenty of U.S. designers doing the same thing.” 

Panna Jain, president of Paramount Gems, a New York City–based gem and jewelry manufacturer, says for the Peruvian industry to really grow, it will need more support from banks and the government, better insurance and courier services, as well as greater standardization of the product. “It is very much an immature market,” he says. “It will take a full decade to get acceptance in America.”

Even so, everyone on the trip was struck by the enthusiasm and artistry they saw. 

“This trip is part of a learning process [for Peruvian jewelry manufacturers to discover how to] change their factories to accommodate the United States,” Peck says. “They seem to be willing to do that. Whether they can achieve it is another question.” 
 

Top: earrings in gold-plated sterling silver with amazonite; $104; Alexandra Temple, Lima, Peru; 511-445-3898; info@alexandratemple.com; alexandratemple.com

Model: Lanza earrings in silver with obsidian, $315, triangle rings in silver, $85; Sissai, Lima, Peru; wholesale@sissai.com; sissai.com

 

3 Questions With…Roque Benavides

Roque Benavides, CEO of Buenaventura, one of Peru’s largest miners, spoke to JCK at his company’s Lima headquarters. —RB 

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Roque Benavides

JCK: Where do you see the price of gold headed?

Roque Benavides: Gold has been in the world forever. I am teaching a course at university on mining management, and I was asked to give a lecture on prices. Out of the three hours I had to give this lecture, it took me an hour to explain gold prices and the factors that affect gold price: supply and demand, interest rates, currencies, the central banks, even culture, in the case of India. There are so many factors. Whereas, when you look at industrial metals, it is supply and demand. You cannot store it. 

I think gold will stay strong in the longer term. In the short term, we might see it go to $1,100, maybe $1,000. I don’t think it will go much lower than that.

JCK: What do you think of the Peru Certified program?

Benavides: I think it’s positive. It gives a better image to the mining sector. There is a perception gold is produced only for the rich and only for fashion. But the history of humanity is related to gold. It is in nature. It also has some industrial uses. You need it for computers, for connectivity.

JCK: What else would you want our readers to know about mining in Peru?

Benavides: Many complain about mining. They say mining doesn’t have a future. Maybe mining doesn’t have a future in Singapore and Switzerland, but it does in a country like Peru, which has three different regions: the coast, the mountains, and the jungle. We need infrastructure, and the only way to justify infrastructure is with economic activity in the rural areas. Mining has a substantial contribution [to make] in that respect.

What we have in the Andes is essentially a wall that separates the coast and the jungle. How do we get roads, electricity, communications if we don’t have economic activity in the mountains? Twenty percent of the Peruvian territory is 4,000 meters over sea level, where most of the mines are located. How do we give opportunity to those Peruvians…if we don’t have economic activity? 

There are good things that mining can offer to society. We have a frustration in mining, because everybody looks at us as if we were dirty guys. Mining is part of nature. With countries that have been blessed with natural resources, we have not just the right but the responsibility to [give those resources] value.