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Press Release: Mehul Choksi, the chairman and managing director of the Gitanjali Group, issued a statement on the “Impact of Recent Policy Changes related to Gold Imports” in India. The recent series of guidelines issued by the RBI has had a major impact on gold imports. While supply to the domestic industry has virtually come to a halt, very few banks are delivering gold for exports. In the light of the overall global economic scenario and India's current account deficit (CAD) problem faced by the economy, Gitanjali Group feels that measures for reducing gold imports need to be supported. However, in the medium to long term, the government needs to address the issue of how the CAD can be reined in without impacting the jewelry industry, which provides employment to over 4.5 million people across the country. Implications for Gitanjali Group Gitanjali Group has always had a diverse product category mix, with gold jewelry, which accounted for 25 percent to 30 percent of the total revenue, being viewed as a complementary product category with low margins. In the current scenario some changes in the product mix with a reduction in the gold jewelry segment are inevitable. However this may not have major implications for the bottom line in which the main diamond jewelry business is the important contributor. The Group has well-established diamond jewelry brands and a strong manufacturing set up catering to the exports sector and supplying markets worldwide. Moreover, the group has ownership and controls the supply chain of leading retail chains in U.S., Japan and the Middle East. Plans Going Forward In the current scenario, the company plans to increase its diamond jewelry sales, which have better value addition of 25 percent to 30 percent. Although this change in category mix will have impact on sales, the margins are expected to not only remain intact but also be better than estimates. Gitanjali also plans to introduce lower category of 9-karat or 11-karat gold and diamond jewelry in the Indian market. The company also plans to increase its store presence in the U.S., Middle East, China and Japan, which have a positive outlook and have grown by nearly 15 percent in the past year. On another front, the company has plans to introduce more value added gold jewelry rather than selling it as coins. The group remains firmly committed to strengthening the country’s economy and will work to enhance its presence in the export market and earn foreign exchange for the country. About Gitanjali Group Gitanjali Group is the world’s largest integrated branded jewellery manufacturer-retailer with an annual turnover of over $3 billion. Established in 1966, today its activities are spread across the entire value chain from rough diamond sourcing, cutting, polishing and distribution, jewellery manufacturing to branding and retailing gold and diamond jewelry in India and abroad. The Group pioneered jewelry retail revolution in India by launching ‘Gili’ way back in 1994. It today owns and distributes eight out of the top 10 jewelry brands in the country including Gili, Nakshatra, Asmi, D’Damas, Sangini, Diya and Maya Gold. Gitanjali’s extensive network of own stores, shop-in-shops and franchise outlets span across 300 cities and 4,000 points of sale. It has three world-class diamond polishing facilities in India located at Surat, Mumbai and Hyderabad possessing production capacity of 400,000 stones a month. Domestic jewelry manufacturing facilities are located at Mumbai, Hyderabad, Coimbatore, Kolkata, Surat and Jaipur that produce 235,000 pieces of finished jewelry each month, while international manufacturing set up is in Bangkok and China. The Group’s international design hub is located in Italy. Over the last two decades, it has expanded operations in U.S., U.K., Belgium, Italy and the Middle East to China, Singapore and Japan. Today the group owns a large retail chain in the U.S., Samuels Jewelers Inc; and has acquired a number of brands such as Stefan Hafner, Valente, Io Si, Poratti and others in Italy, and has a fast developing presence in China, the Middle East and other new markets.
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