Handcrafted gold jewelry maker Shree Ganesh Jewellery House Ltd. (SGJHL) entered into a joint venture with an Italian company SALP S.P.A., a specialist in machine-made light weight gold jewelry, to set up a gold jewelry manufacturing unit in India with an investment of $20.6 million (INR 1 billion).
”The joint venture is a step by Shree Ganesh Jewellery towards expanding its product portfolio and strengthening our position as the largest exporter and manufacturer of gold jewelry globally,” said Nilesh Parekh, the chairman of SGJHL. ”This alliance has provided us with a great opportunity to partner with a company whose expertise will help us to introduce a new dimension in the manufacturing segment of gold jewelry in India, light-weight machine made jewelry.”
Kolkata-based SGJHL is a $1.34 billion company, which makes gold jewelry, diamond jewelry, gemstone-studded jewelry and light-weight Italian jewelry. It derives more than 85 percent of its sales from overseas markets and primarily exports to the United Arab Emirates (UAE,) Singapore and Hong Kong. The company currently has manufacturing units located in Mondalpara, Manikanchan Special Economic Zone (SEZ) in West Bengal and is in the process of setting up a gold refining facility at Domjur in West Bengal.
SGJHL stated that the new joint venture will operate under the name of OROITALIA Chains Private Ltd. and the venture will set up the manufacturing division at its integrated jewelry manufacturing complex in Domjur. SGJHL will provide SALP with the infrastructure to set up the jewelry manufacturing division in India and SALP in return will introduce their technical expertise to produce machine made light weight gold jewelry, it added.
The unit is expected to be operational bythe first quarter of 2012, with an initial annual capacity to manufacture 10 tonnes of light weight gold jewelry, particularly gold chains. SGJHL said that this is the first ever joint venture in India where an Italian company is entering into a strategic relationship with a jewelry company to set up a manufacturing base in India.
SGJHL noted that it will manufacture the gold chains under the brand name OROITALIA for retail across India through its GAJA stores as well for its export market. The company operates 23 retail chains under the GAJA brand in India.
Alvise Martini, the director at SALP SPA, said, “It is established today that India is one the largest and the fastest growing gold and diamond jewelry market globally. The undertaking presented us with an exclusive opportunity to venture into a potential market and introduce our expertise.”
SGJHL said that volatile gold prices and changing consumer behavior, especially of young customers who prefer light jewelry have been driving this segment. The company added that light weight jewelry accounts for about $10 billion (INR 500 billion), out of the estimated $51 billion (INR 2,500 billion) domestic jewelry market in India.