Diamond dealer targets Charlize
2007-11-07 17:50
Johannesburg - African Romance, a small South African diamond dealer, aims to compete with the likes of renowned French jeweller Cartier and target celebrities, its chief executive said at the company's launch on Wednesday.
Unlisted African Romance aims to take advantage of a new initiative in South Africa, the world's largest producer of precious metals, to market an African diamond brand globally.
Although modest in size compared to giants like Cartier, owned by Richemont SA, African Romance could spur a new trend of local gem cutters as it seeks to offer African designs, infused with "the mysterious spirit of Africa".
African Romance said it hoped to fight it out with bigger, more established names in a polishing business dominated by low-cost manufacturers in China and India, even though its wage costs are much higher than the average in those countries.
"There is no African luxury brand on the international level of Cartier... that's the space African Romance now has taken," chief executive officer Mohseen Moosa said at the launch.
'We want Charlize'
"We will target tourists and celebrities, we would love it if Charlize Theron wore our gems," referring to the South African actress who won an Academy Award for her role as a lesbian serial killer in 2003 film, "Monster."
Moosa, who took the media on a tour of African Romance's cutting and polishing facilities in Sandton, a wealthy surburb of Johannesburg, said his firm has so far invested R40m in its operations.
The firm projects that it could earn R60m in revenues in its first year, and this could grow to R200m in the future, Moosa said, adding that it aimed to open offices in New York and London in the future.
He said African Romance would pay $50-$60 per carat in wages, whilst the cutting and polishing houses in India and China pay much less.
Big diamond producers have long argued that it was not viable to polish diamonds in southern Africa, where costs are many times higher than in China and India.
Sweat shops
"In India you have sweat shops, we don't... We pay regulated wages, but because we are also involved in the downstream we will mitigate some costs," Moosa said, referring to African Romance's role in mining through its sister firm WakeMin Ltd.
WakeMin is a unit of WakeHold Ltd, a partner to Canada's junior mining firm, Etruscan Resources, which Moosa said plans to list its diamond unit in Johannesburg, and has expressed interest in acquiring African Romance, he said.
Moosa was asked whether an economic downturn in the United States - the world's biggest buyer of diamonds - and the relatively stronger rand currency, which makes exports dearer, would be a problem.
He replied: "The US slowdown and a strong rand could hurt us, but the saving grace is that India and China are roaring, and we have been marketing to those countries, and more importantly, the Middle East has shown even stronger interest."
South Africa, Namibia as well as Botswana, the world's top producer of the gem by value, are trying to reduce unemployment and reverse the trend where all the major polishing centres are based in countries that don't produce diamonds.
"The myth that Africans cannot polish diamonds remains just that, Africans can do it," Moosa said.
- Reuters