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Adding Some African Romance to the International Luxury Club
Dec 3, 2007 6:14 AM
By Avi Krawitz
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RAPAPORT... It may have simply been good PR, or perhaps the story truly warranted the attention it received. Either way, the idea of a purely African luxury jewelry brand captured the world’s attention in November when African Romance launched its operations in Sandton, South Africa.
As the global press headlined the launch as Africa’s version of Cartier, and the final ‘fill to the international diamond gap,’ it was more likely that, as the first completely black empowered diamond cutter, African Romance symbolizes a new era for the African diamond industry.
“Consumers have been waiting for good news out of Africa,” African Romance chief executive Mohseen Moosa told Rapaport News. “There is an appeal in buying jewelry and diamonds that were mined, designed, and manufactured in Africa.” ( Video: Moosa speaks to Rapaport about the launch on November 15.)
For a continent – and one might say industry – more associated in the press with war and devastation, that good news comes in the form of a message an all-Africa brand is attempting to make. Said Moosa, “Africans have fantastic values; it just has not been packaged well. They also want to have conflict free diamonds, also want to care about the environment, about people and our planet.”
Again, maybe good PR, but certainly the timing seems right. With legislation now in place in countries such as South Africa, Botswana, and Namibia to add local value to the diamonds they mine, companies from the polishing powerhouses of India, Israel, and Belgium have set up shop in southern Africa to take advantage of the trend. The notion, therefore, that Africa can do it on its own, and just as well, while possibly premature, is one the company believes is eagerly awaited.
South Africa in particular, has been at the forefront of the beneficiation drive and through its State Diamond Trader will ensure that 10 percent of rough is polished locally starting from 2008 – though doubts have circulated that it won't be ready on time.
Nevertheless, other African producers such as Liberia, the Democratic Republic of the Congo, and Sierra Leone, while still in their diamond infancies, have expressed intentions to eventually beneficiate, and will therefore be banking on the success of the concept in the south of the continent.
African Romance – which is 30 percent owned by the South African government – may well prove the perfect test case to the international luxury market’s confidence in Africa, as Moosa and company take on the world’s high-end jewelers.
Moosa dismissed reports, however, that the company is trying to unseat the likes of Cartier, noting rather that it has opportunity to fill a space in the same market.
“We are competing in the high end luxury market, but we are not taking on anybody,” Moosa said. “We are saying that in the high end market there is nothing that is purely African. Consumers have the wonderful benefit of getting French, Italian, or Indian designs, but they are not getting the benefit of African designs, so in that sense we are providing another product on the market so that consumers have a better variety.”
The company is sourcing its diamonds from Etruscan Diamonds, a Canada-based junior, which has a stake in African Romance and owns mines in South Africa; from the State Diamond Trader; and will also buy from South Africa-based miner Trans Hex, Moosa said.
He explained that the diamonds arrive at the Sandton facility directly from the mines, “under a seal which is only broken on the premises.” The diamonds are then cut and polished and sent to independent laboratories for international AGS and GIA certification. African Romance outsources the jewelry design to local jewelry manufacturers, after which the diamonds are set in the jewelry pieces on the company’s premises.
The facility has a capacity to produce 3,500 carats per month on a single shift, and around 7,500 working on a two to three shift rotation. It currently employs 72 people and Moosa is hoping to ramp that up to 130 in the near future. So far, the company has invested ZAR40 million (around $5.9 million) in the operation and is predicting it will make revenues of ZAR60 million in its first year, and eventually ZAR200 million per year.
To achieve that goal, the company is planning to open marketing offices in New York and London, and as it claims the African piece of the international luxury pie, is hoping the interest generated by its launch will continue.
“The launch of African Romance was a long time in the making,” explained Moosa, noting that the company was careful to get the right message out in order to win over the consciousness of the market. To this end, “the response has been beyond our expectations,” he said.
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Tags:
Belgium, Consumers, GIA, Government, India, Israel, Jewelry, Laboratories, Namibia, Polishing, South Africa
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