Thailand’s government and business community have embarked on new programs designed to turn Bangkok, the country’s capital city, into an internationally renowned fashion center, a hub for gem trading, a technical center for gem grading, and an inviting place for people in the gem and jewelry industry to conduct business. Some of these plans are already in place; others were announced just recently. Thai government officials and gem traders and dealers were eager to discuss the country’s plans for the future during a recent JCK visit to Thailand for the Bangkok Gems & Jewelry Fair, held Feb. 26 to March 2. They were less eager to discuss the orange sapphire controversy that continues to plague Thailand’s gemstone industry.
‘Everything is going to be fine.’ Days before the trade fair opened, the Chanthaburi Gem & Jewelry Association issued a statement saying it had agreed to disclose the use of beryllium—implicated in the creation of padparadscha-like color in sapphire—and other color-enhancing additives. The organization said it agreed to the following:
that chrysoberyl is intentionally being added to the crucible during the new heat treatment to enhance color in corundum;
that all association members are obligated to disclose and to differentiate the new treatment when selling to customers; and
that beginning with the Bangkok Gems & Jewelry Fair, all CGA members will adopt a strictly regulated disclosure system for use in all customer transactions regarding the new treatment. Members who fail to adhere to the new disclosure system would be expelled from the CGA.
During the opening day of the trade fair, however, none of the dealers interviewed by JCK would disclose any enhancements to their stones, except to say they were heat treated.
Thai Gem and Jewelry Traders Association (TGJTA) officials, appearing somewhat embarrassed by the controversy, said only that the matter has been dealt with by the major traders and will eventually become standard operating procedure among all dealers.
“We are still aiming our effort for a consensus,” TGJTA president Sunee Sriorathaikul said during a meeting with members of the international press during the opening day of the show. “I believe everything is going to be fine.”
Building integrity. Before the sapphire controversy began, the Thai government and others had begun taking action to maintain the integrity of the country’s gem and jewelry industry. Its most noticeable effort is the founding of the Gem and Jewelry Institute of Thailand (GIT).
Founded in 1998 and housed in a dedicated building on the campus of Bangkok’s Chulalongkorn University (a partner in the project), the institute serves several functions. It offers training in business, gemological testing, computer-aided design, and the business of exporting gems and jewelry. In addition, GIT provides gold and precious metals assay and hallmark services; has a public relations arm that informs and educates gem and jewelry dealers, students, and the general public; contains a museum dedicated to the country’s gems and jewelry; provides research in gem assessment and enhancements, setting industry standards, new technology, jewelry design, and marketing; and serves as a place for the gems and jewelry industry and government to meet and help determine national policy.
But most importantly, GIT’s staff of nine gemologists provides world-class gemological assessment services—including verbal and written reports—using some of the most advanced equipment available. Assessments include:
distinguishing among natural, synthetic, and imitation gemstones and diamonds;
analyzing the methods used to enhance gemstones;
distinguishing among natural pearls, seawater cultured pearls, and freshwater cultured pearls and analyzing pearl treatments;
diamond and ruby grading; and
determining country of origin of gemstones, particularly rubies, sapphires, and emeralds.
Professor Sakda Siripant, director of GIT, says the institute will begin testing orange sapphires for beryllium this year, as soon as the necessary equipment arrives. “Right now we call it an ‘extra element,’ but we can’t call it ‘beryllium’ because we don’t have the equipment,” he says.
GIT is a public-private joint undertaking by Thailand’s Ministries of Commerce and Industry, Chulalongkorn University’s Facility of Science, and the TGJTA. GIT receives 75% of its funding from the Thai government and 25% from student fees. However, it operates as an independent, nonprofit organization—and that independence is vital to the integrity of the institute, Siripant says.
“Labs should be neutral and truthful,” he says. “We have to tell the truth. We have a very good staff because we are the center of the gemstone world. We have to have a good lab, and we have to do the right thing.”
Fashion first. The opening-day ceremony of the Bangkok Gems & Jewelry Fair served as a showcase for the country’s push toward fashion prominence. Thai Commerce minister Adisai Bhotaramik opened the ceremony by declaring, “This year the government has a policy to make Thailand the hub of the gem and jewelry industry under the initiative of the Bangkok Fashion Project, which is a pivotal strategy in promoting Thai products in the world market.”
The speech was followed by a runway fashion show starring Thai television actresses adorned with jewelry and parading before a backdrop of Bangkok, which Thai officials said reflected the theme of the show, “Bangkok: City of Jewels.”
TGJTA secretary general Boonkij Jitngamplang explained later that day that the government is taking a multifaceted approach to turning Bangkok into a fashion center. First, he said, it will combine the resources of its gem industry with those of its textile industry, noting that both textiles and jewelry are among Thailand’s top five exports. Other plans include the construction of a fashion design center. The government will provide the tools and incentive to develop jewelry and fashion designers in the country.
Jitngamplang acknowledged that turning out Thai designers with international perspectives on design will be a difficult task: “Our take on design has to improve a lot.”
GIT’s Siripant also noted this challenge facing the Thai design industry by admitting that Thailand “can’t compete with countries like Italy when it comes to design.” But it doesn’t mean the country won’t try. GIT invites designers from Europe to train Thai designers in European and international design methods. “This provides a new perspective for designers, a new way to look at design,” he says. “A way to think outside the box.”
Business-friendly Thailand. During the first day of the trade fair, TGJTA officials also announced that the Thai government will develop a “Thailand Gem & Jewelry Center” in Bangkok and provide an exemption on the value-added tax (VAT) for imports of raw material for the gem and jewelry industry. Both initiatives were in response to the fact that neighboring countries provide tax and other incentives for gem and jewelry businesses, TGJTA’s Sriorathaikul says.
The center’s goal is to make Thailand “a regional center for manufacturing and trade that will allow international gem and jewelry traders to conduct business freely,” Sriorathaikul says.
The Thai government is providing an interest-free $3 million loan to set up the center, but as of press time, TGJTA officials said that neither location nor timeline has been set.
The VAT exemption went into effect March 1. It will include all “imports and trading of diamonds and other precious and semiprecious stones, genuine or artificial, which have not yet been assembled or processed into finished jewelry products,” Sriorathaikul says.
TGJTA officials are hoping that the VAT exemption and the new trading center will make the country more competitive with its neighbors and help the industry increase its gem and jewelry exports.
Down the road. With these programs, the government and the gem and jewelry industry in Thailand have shown a willingness to be aggressive when planning for the future. But is the country poised to capitalize on these initiatives?
Over the past three years, Thailand has been slowly recovering from the near economic collapse it suffered in 1997. The overall economy grew 10% between 1999 and 2001.
The gem and jewelry industry in Thailand appears to be strong. In 2002, gem and jewelry exports in Thailand grew 18% to more than $2 billion, and TGJTA predicts that jewelry exports will increase by another 12% in 2003.
In its final report, TGJTA says the Bangkok trade fair exceeded expectations by more than $50 million with a record $404 million in sales on the books. Jewelry sales made up 47% of the total orders placed, with the balance coming from sales of gemstones, diamonds, and other goods.