Shares of Goldiam International - the maker and exporter of gold and diamond jewellery - are higher by over 9% on February 19, after the company said it is exploring setting up a manufacturing facility in USA.
In the last one year, Goldiam's shares have risen by 96%, and the company has a market capitalisation of over Rs 4,100 crore.
The diamond exporter said it is currently assessing the feasibility of a US-based facility, and this will be a strategic initiative by the company.
Goldiam said it is hoping to enhance its operational efficiency as well as optimize the supply chain logistics involved in the export of jewellery. The company aims to 'further' strengthen its presence in the US market, which it regards as crucial for its business.
The management is hoping to get a competitive edge through this proposed facility. "The proposed facility is expected to provide better service to our customers, reduce lead times, and offer a competitive edge in the region." Goldiam International said.
The plans are at an initial stage of assessment, said Goldiam, and details such as location, investment outlay and timeline will be shared once finalized and approved by the board.
A manufacturing facility closer to the US clients may mean Goldiam could save on shipping cost and processing, as well as avoid import tariffs on jewellery, aside of easier compliance to local regulations. It will also lend access to enhanced technologies and tools to process diamonds. It is possible that some states in USA may offer tax breaks to attract manufacturing facilities.
The natural diamond business for Goldiam has been seeing a decline in recent quarter, and the company has noted a clear shift towards lab-grown diamonds as consumer preferences evolve. With the evolving trend, there have also been increased inquiries for larger carat sizes, a trend in line with the emergence of lab-grown diamonds.
Lab-grown diamonds (LGD) jewellery contributed 80% of the total export sales for Goldiam in Q3FY25, as compared to 58% in Q3FY24.
The export of finished jewellery from India to the US is very significant opportunity in worth $3-3.5 billion in size, according to Goldiam, which it considers as the addressable market.
The company plans to add close to 20 stores this fiscal, and over next 3-5 years, is aiming at 150-200 stores.
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