September 2, 2008

Jewellery Business Keeps Its Shine, DeGem Set to Grow

By Sharen Kaur

DEGEM Bhd may acquire smaller rivals to build its business, but wants to grow independently first, executive director Stephen Choong said.

"If it fits into our expansion and the price is good, we may acquire the firms. But we are not looking at it now," Choong told Business Times.

DeGem, which is 52 per cent held by the Choong family, has a market capitalisation of RM120 million and RM145 million in inventory.

It makes and retails diamonds, gemstones, pearls, white gold and platinum jewellery under the DeGem and Diamond & Platinum brands.

Its manufacturing facility in Bangsar Baru, Kuala Lumpur, produces 2,500 pieces of jewellery a month: from a simple solitaire range to an elaborate necklace worth up to RM12 million.

It offers an affordable contemporary selection under the Diamond & Platinum brand, with each piece of jewellery priced from RM500 to RM20,000.

The high-end jewellery is under the brand DeGem, priced from RM3,000 a piece to RM1 million depending on carat, cut, colour and clarity.

There are five DeGem and 12 Diamond & Platinum outlets in the country. Choong said there were currently no plans to increase its local stores as the existing outlets could still meet demand.

Overseas, it has two DeGem outlets in Singapore and may open a third by end-2009. It also has a DeGem outlet in Jakarta, Indonesia, and a Diamond & Platinum store in Brunei.

Each DeGem and Diamond & Platinum outlet was set up at a cost of around RM4 million and RM1.5 million respectively, Choong said.

"Due to our existing inventory, we are in an advantageous position as others are affected by higher fuel and raw material prices. But in the long run, we have to follow market prices and will pass on the increase in cost to our customers."

Choong said those with holding power could invest in jewellery as prices were still growing strongly because of tight supply.

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