June - Global Value Chain Analysis Gold Jewellery

Working Paper
IDS
Institute of Development Studies
Global Value Chains Analysis of the Gold Jewellery

Industry: Upgrading Trajectories for Guyana
Dianna DaSilva-Glasgow
DECEMBER 2012
University of Guyana
Turkeyen Campus
Guyana
June 2013
DaSilva-Glasgow, Dianna
Global Value Chain Analysis of the Gold Jewellery Industry: Upgrading

Trajectories for Guyana
by
Dianna DaSilva- Glasgow*
*Dianna DaSilva-Glasgow is a Researcher 2 at the Institute of Development Studies

and a Lecturer in the Department of Economics, Faculty of Social Sciences, University
of Guyana
IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12
Published by the Institute of Development Studies,

University of Guyana,
Turkeyen, Georgetown,
Guyana, South America
www.idsguyana.org
June 2013
ISSN 1019- 1305
This paper should be cited as: DaSilva-Glasgow, Dianna (2013). Global Value Chain
Analysis of the Gold Jewellery Industry: Upgrading Trajectories for Guyana.
Institute of Development Studies, University of Guyana Special Series Working Paper #
6/12 to commemorate the 50th Anniversary of the University of Guyana.
CONTENTS
PAGE
SECTION 1: INTRODUCTION
SECTION 2: METHODOLOGY
SECTION 3: INPUT-OUTPUT STRUCTURE OF THE GLOBAL VALUE CHAIN
FOR GOLD JEWELRY

SECTION 4: KEY MARKET TRENDS IN THE GLOBAL GOLD JEWELLERY
16
INDUSTRY
SECTION 5: INDUSTRIAL ORGANIZATION AND GLOBAL GOVERNANCE
27
STRUCTURE OF THE GOLD JEWELRY INDUSTRY

SECTION 6: GUYANAS CURRENT PARTICIPATION IN THE GLOBAL GOLD
41
JEWELRY VALUE CHAIN

SECTION 7: INSTITUTIONAL FRAMEWORK FOR GOVERNANCE OF THE
45
LOCAL VALUE CHAIN

SECTION 8: UPGRADING IN THE GLOBAL VALUE CHAIN
61
SECTION 9: RECOMMENDED UPGRADING STRATEGIES AND ASSOCIATED
67
POLICY MECHANISMS
SECTION 10: CONCLUSION
69
SECTION 11: KEY INFORMATION SOURCES
70
SECTION 12: APPENDIX (SWOT analysis of the Guyanese gold jewellery
75
industry)
LIST OF TABLES
Table 1: World Supply of Gold by Source: 2011-2012
Table 2: Gold Production by Country: 2012
Table 3: Gold Jewellery Consumption by Country: 2009-2012)
Table 4: Governance Structures in Global Value Chains
Table 5: Top 10 Gold Producing Companies Globally
Table 6: Leading Jewellery Companies Globally Based on Retail Value in 2011,
USD Billion
Table 7: Leading Luxury Jewelry Designers and Stores Globally
i
Table 8: Leading Players in the Distribution of Gold Jewellery, by Category

Table 9: Recent Investments by Leading Jewellery Companies, affecting the
Governance of the Value Chain
Table 10: Top 10 Exports from Guyana, 2010
Table 11: Export Markets for Gold Jewellery, 2008-2011
Table 12: Main Players in the Gold Jewellery Manufacturing Sector In Guyana
Table 13: Key Stakeholders in the Gold Jewellery Industry in Guyana
Table 14: Activity Status by Gender: 1992/93 and 1999
Table 15: Guyana, Ease of Doing Business Rank by Criteria
Table 16: Guyana, Burden of Compliance with Taxes and Mandatory Contributions
Table 17: Summary of General Enabling Factors for Industry Development
Table 18: Summary of Industry Specific Factors
Table 19: Upgrading Opportunities for Guyana in the Gold Jewelry Value Chain
LIST OF FIGURES
Figure 1: Input-Output Structure of the Gold Jewellery Value Chain
Figure 2: Trends in Exports of Gold Jewelry, 2000-2010
Figure 3: Top 20 Exporters of gold jewelry, 2011
Figure 4: Trends in Imports of Gold Jewellery, 2000- 2010
Figure 5: Top 20 Importers of Gold, 2010
Figure 6: Governance Structures in the Gold Jewellery Value Chain
Figure 7: Guyanas Participation in the Gold Jewellery Value Chain
Figure 8: Domestic Exports (US$Mn), 1990-2011
Figure 10: Guyanas Value chain for Gold Jewellery Manufacturing
Figure 11: Growth Rate of Real GDP, Guyana: 2000-2012
Figure 12: Guyana, Ease of Doing Business Rank, 2012
Figure 13: Output of Gold: 2000-2011
Figure 14: Recommended Upgrading Strategies for Guyana
LIST OF APPENDICES
Appendix 1- SWOT Analysis of the Guyanese Gold Jewellery Industry
iii
SECTION 1: INTRODUCTION
This paper undertakes a study of the global value chain for gold jewellery.
The value chain describes the full range of activities that firms and workers
perform to bring a product from its conception to end use and beyond. This
includes activities such as design, production, marketing, distribution and support
to the final consumer. The activities that comprise a value chain can be
contained
within
single
firm
or
divided
among
different
firms
(globalvaluechains.org, 2011).
The global value chain framework (GVC) is used to understand the structure and
capture the dynamics involved in the global gold jewellery value chain. The study is
done with the overarching objective of understanding how small to medium sized
enterprises (SMEs) in Guyana can competitively improve their presence and insertion
into the global market for gold jewellery.
The importance of undertaking such an analysis for Guyana for the gold jewellery
industry is predicated on the fact that gold has become the leading export commodity
for Guyana contributing in excess of 50% of export earnings. However, little value
adding to raw or refined gold takes place domestically. Further, in the local value chain
there is a notable dominance of SMEs at every stage, from gold mining to jewellery
fabrication.
The study employs the step-by-step approach developed by the Duke Universitys
Center for Globalization, Governance and Competitiveness that encapsulates the
following steps: Input/output structure, geographic scope, governance and industrial
organization, institutional framework and upgrading trajectories.
The specific questions that the study seeks to answer mirrors these steps to a large
extent and include:
1. What is the structure of the global value chain for gold jewellery
2. What are the most notable market trends for gold jewellery
1
3. How is the value chain governed?

4. Where does Guyana fit in the Global Value Chain for Gold Jewellery
5. What is the structure and institutional framework for management of the Guyanas
value chain?
6. What are the prospects of Guyana improving its participation in the gold jewellery
value chain?
7. What policy mechanisms are necessary to realize improved participation of Guyana
in the gold jewellery value chain?
The paper has twelve sections that are focused on answering the key research
questions. Section 2 describes the methodological approach of the paper; section 3
identified and describes the input-output structure of the global value chain for gold
Jewellery; section 4 examines key market trends in the global gold jewellery industry;
section 5 gives an overview of industrial organization and global governance structure
of the gold Jewellery industry; section 6 examines those aspects of the global chain
where Guyana currently participates; section 7 looks at the local value chain; the key
stakeholders having an impact on the gold industry and the key enabling conditions
generally and more specific to the industry that may affect the development of the
industry; section 8 examines the prospects for SMEs in Guyana to upgrade their
participation in the global value chain; section 9 recommended upgrading strategies
that are feasible for SMEs to follow and the associated policy mechanisms that are
necessary to realize these strategies; section 10 gives a brief conclusion; section 11
gives the key information sources consulted for the study and section 12 (appendix)
gives the SWOT analysis of the Guyanese gold jewellery industry that was used to
inform previous sections of the paper.
SECTION 2: METHODOLOGY
This paper follows the Global Value Chain methodology as developed by the Duke
University, Centre for Globalization, Governance and Competitiveness. There are four
dimensions associated with this methodology. These include:
1. Input-output structure- that describes the process involved in bringing the raw
material to a finished good and the nature of the interactions among firms
involved in this process.
2. Geographical scope- focused on understanding the global dispersion of the main
entities that play a part in the transformation of the raw material into the finished
product. The geographical scope also focuses on identifying key market trends in
the industry in order to be able to identify market opportunities. Key standards
within the industry are also examined in order to be able to infer obstacles to
expanded trade.
3. Governance structure- that identifies the major players in the chain and explains
how the chain is coordinated and controlled. This is informed by an assessment
of the strategy of the lead firms.
4. Institutional context- that identifies the key stakeholders and their level of
importance and influence over the industry. The focus is specifically on
institutional support for SMEs which are recognized to be dominant in the
Guyanese market. At this stage, an assessment is also done of the general and
industry-specific factors in Guyana that can either support or hinder further
growth and development of the industry. These are categorized as strong, weak
and average.
5. Upgrading1 that shows how players can shift between different stages of the
chain with the aim of improving their economic welfare. This step is informed by a
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the local
industry. It also draws on the assessment of the enabling factors done in the
previous section.
See Gereffi (1999) and Humphrey and Schmidt (2002)

3
Primarily secondary data is used for the study. Data used includes trade information,
firm and industry level data on employment, revenues, business locations; institutional
data; general macroeconomic and social data. Since the study relied mainly on
secondary data it was necessary to consult various sources such as the Annual reports
of leading firms in the industry, international organizations such as the World Bank,
Global industry associations such as the World Gold Council, International news
publications such as the Economist, industry news magazines such as Jewelrista and
the National Jeweller; and statistical databases such as the United Nations Commodity
Trade Statistics Database and Datamonitor.
In order to assess trends in trade of gold Jewellery, Jewellery is taken to mean item
89731 (articles of jewellery and parts thereof of precious metals) of revision 3 of the
standard industrial classification system. Data is obtained from the UNCOMTRADE
database.
SECTION 3: INPUT-OUTPUT STRUCTURE OF THE GLOBAL VALUE

CHAIN FOR GOLD JEWELLERY
Figure 1 shows the input-output structure of the global value chain for gold jewellery.
Based on the figure the Gold Jewellery value chain in simple stages encompasses
research, gold mining; gold refining and trading, Jewellery fabrication and design,
distribution and gold recycling.
Jewelry Design
Research
Market Research
Gold Mining
Gold Extraction
Gold Refining
Jewelry
Marketing and
Gold
Fabrication
Distribution
recycling
Refining Equipment
Branded Boutique
Chains
Authorized Retailers
Department Stores
Discount Merchandisers
Mom and Pop shops
Non-store Retailers
Wholesale Distributors
Jewelry Tools
Geo-physical
Research:
-
Mineral Exploration/
Gold Prospecting
Resource
Evaluation
Reserve Definition
Mining Equipment
and Supplies
Chemicals
Chemicals
Gold Trading:
State-Owned
Enterprises
Private Companies
Exploration Equipment
and Supplies
Chemicals
(paste,enamel,
rhodium liquid,
acid)
Research and Development
Figure 1: Input-Output Structure of the Gold Jewellery Value Chain
Description of the global value chain for gold jewellery

Research Stage: Research is one of the first activities firms undertake before getting
involved in gold mining. There are two types of research that firms undertake,
geophysical and market research. The combined focus of both types of research is
the extraction and commercial exploitation of gold resources.
The specific focus of geophysical research is to determine if deposits of gold exist in
commercially viable quantities. The main activities involved in this type of research are
mineral exploration or prospecting, resource evaluation and reserve definition. Mineral
prospecting is a simplified form of mineral exploration and in effect, involves a search
for commercially viable deposits of ores. Prospecting and mineral exploration are similar
activities and often the terms are used interchangeably. However, mineral exploration is
a more organized and scale-intensive exercise. Prospecting/exploration can involve
both large and small firms; however, the use of the term prospecting often characterizes
more small-scale exploration. In some countries people work independently as
prospectors, some illegally. In some countries, such as the USA, gold prospecting (and
mining) is also done for recreational purposes. For instance, the Gold Prospectors
Association of America (GPAA) has mining claims across the country that members can
work for a yearly fee.
Market research is done to determine if discovered resources will be worth mining
based on commodity prices and demand trends. Small deposits will not be mined by
large firms as the economic returns will be small and the risks are great.2 Research also
focuses on assessing the risks involved in mining the resources; these include political
risks, particularly of foreign firms in developed countries, social and environmental risks,
market risks such as changes in land tenure and resistance from locals. Such research
is usually outsourced to consultancy firms.
http://en.wikipedia.org/wiki/Gold_prospecting
7
Gold Mining Stage: The main activities at the gold mining stage are mineral
exploration, gold prospecting and mineral extraction.
Gold exploration may involve both large and small firms. However, the size of the
deposits that could be unearthed is an important determinant of the size of firms that
would be involved in extraction. In fact, there is a direct relationship between the size of
firms involved in exploration and the size of deposits they are able to mine. Larger firms
require larger deposits in order to have an internal rate of return. It may be precisely
because of the risks involved in large scale mining that approximately one-quarter of
world output of gold is estimated to originate from artisanal or small-scale mining.
Once resources have been discovered a determination is then made of whether the
deposits exist in commercially viable quantities. This is particularly the purpose of
resource evaluation, in addition to assessing the grade of the deposit. This is followed
by reserve definition where the objective is to undertake a feasibility study, based on
statistical and technical assessments, to determine if the ore deposit could be converted
into an ore reserve with economic potential. At this stage the skills of geologists, geochemists, and mining engineers are required.
Once resources have been discovered in commercially viable quantities, extraction of
the resource is undertaken. Gold extraction involves the use of the chemical mercury
(Sodium Cyanide). Mercury is used primarily to extract small gold particles. Mercuryuse involves numerous health and environmental implications such as damage to the
human brain and fish stocks. Consequently, its use is regulated in many countries.
Globally, the World Health Organization has set exposure limits. Further, 140 countries
have come together to create the Minamata Convention through the United Nations
Environment Programme to prevent emissions of mercury. Signing of this agreement
will commence in October 2013.
Apart, from mercury use, the existence of other elements in gold ore, such as cadmium,
lead, zinc, copper, arsenic and selenium, is also cause for concern. More so since, thirty
tonnes of used ore are dumped as waste for producing one finger ring of gold. 3
Refining Stage: Raw gold extracted is refined before to increase its purity. A process
called gold parting, for instance, involves the removal of silver from gold. This is done
using chlorination using the Miller process and electrolysis using the Wohlwill process.
The Wohlwill process results in higher purity, but is more complex and is only applied in
small-scale operations. Other methods of assaying and purifying smaller amounts of
gold include inquartation as well as cupellation, or refining methods based on the
dissolution of gold in aqua regia.
In some countries, gold refining is done by state-owned enterprises. Refining could also
be done by independent refining companies. For instance, Johnson Matthey Plc is a
company operating in the US and Europe that undertakes gold refining and the
manufacture of gold bars. The company has operations in 30 counties around the world
and employs around 9,000 people. Large companies usually enter into fixed long term
purchasing arrangements with vendors for polished gemstone and precious metals for
the supply of refined metals.
The majority of the gold produced annually is used for Jewellery, about 50% to be more
precise. Other uses of gold include investments (40%) and industry (10%) (for example,
electronics, medicine, food and drink). As a means of investment, gold is used by
central governments to hold foreign exchange reserves as well as for coinage. In 2010,
the central banks of nations held a total of 28,398 metric tons of gold. For the US,
Germany and Italy gold accounts for over 70% of foreign exchange reserves. The
demand for gold for both Jewellery and investments is related to an important chemical
property of gold, that is, its resistance to corrosion, which means that it is long-lasting.
Jewellery Design Stage: Jewellery design entails the creation of design concepts
through detailed technical drawings by a Jewellery designer, a professional trained in
3
http://en.wikipedia.org/wiki/Gold_prospecting
9
the architectural and functional knowledge of fabrication techniques, composition,

wearability and market trends. In most instances, Jewellery could be designed and
fabricated by the same entity.
The options for designing jewellery are: (1) Employed goldsmiths and gemologists; (2)
Independent designers; and (3) Customers.
Jewellery stores can design jewellery in-house through certified gemologists employed
with the company or goldsmiths trained through the apprenticeship system, which is the
practice of small Jewellers. Jewellery design could also be outsourced to independent
jewelers. Customer designing is also facilitated by some stores where customers work
with store designers to create their own one-of-kind piece. According to the National
Jeweler (2008), in the US, stores that offer custom designing may also some also offer
other services such as free insurance appraisals, personalized after-sale service (like
free cleaning and maintenance work).
Jewellery Fabrication Stage: Jewellery fabrication is the first transformation of gold
bullion into a semi-finished or finished product (World Gold Council 2012). Pure gold is
often not used to make Jewellery because of its softness. It is usually alloyed with base
metals. Copper is the most common base metal used. Other metals used include
aluminum, iron, nickel, zinc, silver or paladium. The word carat however, is used to refer
to the amount of gold a Jewellery item consists of.
An important activity in fabrication is component sourcing. Component here refers to
diamonds and other gemstones that may be used with gold jewellery. For watchmaking,
components that are often sourced from other companies include bands and dials.
Given that Jewellery fabrication is a skill-intensive exercise the tools used are important
and varied and include; drills, lathes and moulds. These are tools used for Jewellery
classified as handmade. Other tools may also be used but these must be guided by
the human hand in order for the Jewellery made to be classified as handmade.
Machine made Jewellery makes use of punch presses, CNC machinery and casting.
Jewellery fabrication takes place in-house for most jewellery makers.
For large luxury-type jewellers, some degree of outsourcing of the fabrication process is
done. For instance, Tiffany & Co. purchases finished jewellery from about 60
independent manufacturers (Tiffany & Co., 2012). Such arrangements are not-based on
long-term supply arrangements and are based on terms such as product quality
requirements and vendor social responsibility. Branded Jewellers may also have other
companies produce and distribute jewellery using their brand. Further, large global
suppliers of jewellery tend to have subsidiary manufacturing operations in several
countries. For instance, Tiffany & Co. has manufacturing facilities4 in Belgium, South
Africa, Mauritius, Botswana, Namibia and Vietnam (Tiffany & Co., 2012).
The move by companies to outsourcing of components and parts reflects a broader
paradigm shift in the manufacturing sector to lower production costs and improve
productivity. In the jewellery sector, other reasons proffered include: access to a variety
of jewellery-making skills, product quality, the cost of capital investment and support for
alternative capacity (Tiffany & Co., 2012).
Distribution Stage: There are several options to distribute fabricated Jewellery. These
include Branded Boutique Chains (National and International), Authorized Retailers of
Established Brands, Non-Brand Jewellery shops (family-owned or Mom and Pop
Shops), Department Stores, Discount Merchandisers, Whole-sale Distributors and Nonstore Retailers.
Branded boutiques, authorized retailers of established brands and non-brand Jewellery
shops are all Jewellery stores specifically or largely, involved in the retail distribution of
Jewellery and in some instances silverware and timepieces. Such stores do not sell
costume Jewellery or antiques. However they may offer repair services and engraving
in combination with the sale of new Jewellery (Jewelrista 2011).
The various distribution channels are discussed in turn below:
1. Branded Boutiques: Branded boutique chains are Jewellery stores with
subsidiary stores in several locations, either within a country (national) or in
4
The first three facilities are leased.

11
several countries (internationally) all operating under the same brand name.
Branded boutiques reflect a vertically integrated process where Jewellery are
designed, fabricated and distributed under one brand but different collections are
produced. These tend to be high-cost items operating in the luxury end of the
market. Branded boutique chains may also sell other accessory items such as
handbags, and sunglasses under the same brand, however, Jewellery
represents their most significant activity. Examples include Harry Winston in the
USA and Van Cleef and Arpels in Italy. These companies may not manufacture
for themselves all, the jewellery items distributed. Some companies have
arrangements where the manufacturing and distribution stages are outsourced.
For instance, Tiffany & Co. in 2007 entered into a 20-year license and distribution
agreement with the Swatch Group for the manufacture and distribution of
watches under the Tiffany & Co. brand.
2. Authorized Retailers: The difference between branded boutique chains and

authorized retailers lies in the intellectual property rights of Jewellery items
distributed. Authorized retailers may not fabricate jewellery. However, they may
be licensed by branded Jewellers to distribute jewellery items produced by the
brand owners but under their own company name. They may also provide
maintenance services on behalf of the brand owners. For instance, Piaget, a
Swiss company has several authorized retailers in the US and Canada (see Box
1) that retail Piaget Jewellery.
Box 1: Authorized Retailers for Piaget in the USA and Canada

-
New York: Simpson Jewelers, Carat N Carat, London Jewellers, T&R, Cosmos,
Cellini, Tourneau Time Machine
Arizona: Ed Marshall
California: Beverly Hills, Los Angeles (2 Locations), Miliptas, Rowland Heights, San
Franciso (2 locations), San Gabriel, Santa Clara
Washington: Diplomatic Duty Free Shop
Atlanta: Neiman Marcus
Massachusetts: Royal Jewelers
Las Vegas: Roman Time Jewelers
Florida: Fort Lauderdale (2 locations)
Hawaii: Honolulu
Illinois: Chicago, Oakbrook Terrace
New Jersey: Cosmos
Pennslyvania: Ardmore
Texas: Fortworth, Houston, Midland, San Antonia
Virgina: McLean
Authorized Retailers in Canada: Richmond, Toronto, Vancouver (2 locations), Montreal
3. Non-brand Jewellery Shops: These refer mainly to small family Jewellers,

mom and pop stores whose key strengths in the jewellery market are that (1) all
jewellery items are meticulously hand-crafted;5 and (2) they offer a range of
pricing options that are within the reach of the pockets of middle to low income
earners. These are popular in Italy and India. In India, 96% of the total players in
the industry are small family-owned businesses. There are over 2.5 million
Jewellery shops in India; 450,000 goldsmiths and 100,000 gold jewelers. 6 These
mom and pop shops do not offer branded Jewellery and may sell only jewellery
unlike the high-end section of the market that tends to also sell other forms of
accessories. In India the craftsmen involved in this segment tend to be illiterate
and rely on the apprenticeship system to learn their trade7. According to the
National Jeweler magazine, non-brand Jewellery shops account for 79% of
Jewellery-only retailers in the US.
5
6
http://www.economist.com/node/21554538
http://www.newdevtprojects.com/ilo/iloPdf/jewellerymarket.pdf
7
13
4. Department Stores: Department stores are generally involved in the retail
distribution of clothing and accessories, including Jewellery. Department stores

may also sell costume Jewellery. Examples of department stores in India include:
Debenhams, Lifestyle Stores, Pantaloon Retail (India) Limited, Reliance Trends,
Shoppers Stop and Star Bazaar.
5. Discount Merchandisers: Discount merchandisers sell jewellery on the basis of

a medium to low-price strategy. Such retailers are global-trotters seeking out low
cost options for securing jewellery. Examples of discount merchandisers in the
US include: Wal-Mart, Kmart, Target and Costco, which are among the top 20
Jewellery retailers in the US. According to the National Jeweller (2007) Wal-Mart,
in 2007 was the nation's number one Jewellery retailer with estimated Jewellery
and watch sales of $2.8 billion. India is gaining prominence as an international
destination for sourcing jewellery with companies such as Wal-Mart and JC
Penny procuring jewellery from India8.
6. Wholesale Distributors: Wholesale distributors act as intermediaries between

Jewellers and retailers. This is not a very large distribution outlet in the gold
jewellery market but an important one nonetheless. It is an outlet, jewellers
operating in the middle to low-end side of the market may rely on. For instance,
LouLouBijoux in the US is the exclusive wholesale distributor in the US and
Canada, of the Brin DAmour collection of jewellery produced by French designer
Sandra Doquin.9 Italian company Buccellati also operates a wholesale outlet for
its jewellery and watches.
8
9
http://www.louloubijoux.com/pages/about-us
7. Non-store retailers: Non-store retail avenues include mail-order catalogs, direct

response marketers, Business-to-Business sales10, direct sales, television11 and
internet sales. Non-store retailers and discount merchandisers represent a
paradigm shift away from traditional means of distributing Jewellery. Non-store
retailing is the second largest retail distribution channel in the US, accounting for
11% of total industry sales and displaying rapid growth (Jewelrista 2011).
According to Jewelrista (2011), one in six engagement rings is purchased online
in the US. Mail-orders sales are facilitated through advertising on television
programmes and in magazines.
Many brand retailers also offer online sales through their various subsidiaries
around the world. For instance, Tiffany & Co. operates e-commerce websites in
13 countries. Sales through this channel accounts for 6% of worldwide net sales
for the company.
It is important to underscore that firms may also invest in research and development to
inform the design of jewellery items and the selection of distribution outlets.
Gold Recycling Stage: Gold recycling entails not only the recycling of gold Jewellery
but all products produced by gold. Recycled gold constitutes a source of supply of gold
(as depicted by the broken arrows in the figure). Globally, apart from mine production,
recycling accounts for around a third of all current supply of gold (World Gold Council
2012).
10
This is where Business sales executives sell items to Business clients specifically developed for the
market for purposes such as gift giving, employee service and achievement recognition awards, customer
incentives etc. Business clients have the privilege of purchasing at discount prices.
11
According to Jewelrista, this avenue has been growing because it responds to self-purchasing women.
Together television retailers QVC and HSN generate $1.4 billion in Jewellery sales, as.
15
SECTION 4: KEY MARKET TRENDS IN THE GLOBAL GOLD

JEWELLERY INDUSTRY
Supply and Demand for Raw Gold
Gold is the primary input into gold Jewellery. 50% of gold produced in the world is used
for Jewellery fabrication. The source of gold is both new mine production as we all
recycled gold. Central banks can also contribute to the supply of gold by selling some of
their reserves.12 Table 1 shows the source of gold supply for 2011 and 2012. Mine
production accounted for 63% of gold supply and grew by 2% between 2011 and 2012.
Table 1: World Supply of Gold by Source: 2011-2012
Source of Supply
Mine Production
Net Producer hedging
Total mine supply
Recycled gold
Total
Total Gold Supply in the World

(Tonnes)
2011
2012
% change
2835.6
2847.7
11.3
-20.0
2846.9
2827.7
2
1668.5
1625.6
-5
4515.4
4453.3
Source: World Gold Council, 2013
It is important to note, that because gold is a natural resource, large scale commercial
extraction is geographically concentrated at the country level as it is dependent on
endowment of the resource. The principal countries that produce gold in the world are:
South Africa, the United States, China, Australia, Russia and Peru. Based on table 2, in
2012 China was the main producer with a total of 370 tonnes kilograms of gold. China
emerged as the number one producer of gold globally in 2007 (with 276,000 tonnes).
Previously, South Africa had been the largest producer of gold since 1905. In 1970 79%
(1,480 tonnes) of world supply of gold came from South Africa. 50% of all the gold ever
produced in the world came from South Africa and that amounts to 165,000 tonnes as
12
It is worth noting that after 18 years as net sellers, collectively central banks are now effectively net
buyers, causing not only a significant decrease in supply but a corresponding, simultaneous increase in
demand (See http://www.numbersleuth.org/worlds-gold/)
at 2009.13 In fact, the Witwatersrand basin in South Africa is believed to be the largest
gold mining region on earth.
Table 2: Gold Production by Country: 2012
Rank
Country/Region
Gold production
(tonnes)
World
2,700
1
China
370
2
Australia
250
3
United States
230
4
Russia
205
5
South Africa
170
6
Peru
165
7
Canada
102
8
Indonesia
95
9
Uzbekistan
90
10
Ghana
89
11
Mexico
87
Rest of the world
Source: U.S. Geological Survey
847
In addition to Jewellery, gold is also used for investment and industry (40% and 10%,
respectively) (World Gold Council 2012). Owing to the global recession and economic
downturns in several countries, the demand for gold for Jewellery fell between 2010 and
2012 from 2,017 tonnes to 1,908 tonnes. Concomitant with this however, was an
increase in the value of jewellery sales from 79.4 US$bn to 102.4 US$bn (World Gold
Council 2012). This reflects increasing prices for gold. Poor economic conditions
globally consequent to weakening US dollar, the European Debt Crisis and unrest in
North Africa and the Middle East were the main driving factors behind the increase in
demand for gold as a form of investment and the resultant increase in price.
KEY EXPORT TRENDS FOR GOLD JEWELLERY
In order to assess trends in trade of gold Jewellery, Jewellery is taken to mean item
89731 (articles of jewellery and parts thereof of precious metals) of revision 3 of the
13
http://www.numbersleuth.org/worlds-gold/
17
standard industrial classification system. Data is obtained from the UNCOMTRADE

database.
Figure 2: Trends in Exports of Gold Jewellery, 2000-2010
Figure 3: Top 20 Exporters of gold Jewellery, 2011
Several trends are observable from the figures:

Firstly, export data was assessed for three years for figure 2; 2000, 2005 and 2010. In
2010 the top five exporters of gold Jewellery were India, USA, Italy14, Switzerland and
China.
14
The major destinations for gold from Italy are: The US, China and Switzerland. In 2012, China became
the second by largest export destination for Italian Jewellery with an increse in exports by 52.7%.
19
Secondly, is the shift in position of India and the USA to first and second place in 2010.
In 2011 (figure 3), the value of exports of gold Jewellery from India almost doubled from
US$7,834 Mn to US$14,382 Mn allowing India to become the number one exporter of
gold jewellery. Both the USA and India have been able to overtake Italy which was
previously the leading exporter of gold Jewellery. Italys decline is related to several
factors (Brough 2012):
1. High cost base of Italian jewelers due mainly to high salaries and small scales of
operation. Italy produces both mass-produced and crafted gold jewellery. The
country faces increasing competition from low cost competitors such as China,
Hong Kong that relies on improved design skills, access to the latest technology
and cheap labour (Brough 2012).
2. Duty-free access of competing countries in export markets. For instance, India
has duty-fee access to the US market for exports up to a certain volume. India
also faces low duties in the EU market. According to Brough (2012) Italian
exporters also face barriers in the markets of the BRIC countries.
3. High price of gold which is higher than historical levels. Gold is currently being
traded at US$1669 oz.
4. Economic recession in Italy15 (Brough 2012)
5. Unorganized market in Italy16, which is made up mainly of small fragmented
family owned businesses.
Thirdly is the growth in the value of exports of China from US$1,511 Mn in 2000 to
US$4,776 Mn in 2010. In 2011, China became the second largest exporter of gold
Jewellery, overtaking the US, with a value of US$10,079. This seems to support a
KPMG study that predicts that by 2015, the market shares of China and India would
15
As a result of the economic recession, sales of gold Jewellery in Italy fell by 9% in value terms in 2012
according to the World Gold Council, while volume declined by 15% compared to 2011. During Italy's
economic downturn, India-based Gitanjali purchased a number of Italian luxury jewellery brands.
Subsequently, the world's largest diamond and jewellery manufacturer-retailers opened a store in Dalian,
China, for the Italian brands Stefan Hafner and Nouvelle Bague.
16
http://www.ibtimes.co.uk/articles/401180/20121103/gold-world-council-damiani-italy-india.htm
have risen to 13% from the 2007 level of 8-9% while the US share will drop to 25%
from 30.8% in 2007 (World Gold Council 2012).
Fourthly, most of the leading exporters are developed countries which means that even
though the manufacuting capacity of developing countries suchas China is expanding,
manufacturing still remains dominated by developed countries.
KEY IMPORT TRENDS FOR GOLD JEWELLERY
Figure 4: Trends in Imports of Gold Jewellery, 2000- 2010
21
Figure 5: Top 20 Importers of Gold, 2010
From the figures the following key trends are observable:

Firstly, The composition of the top five importers of Jewellery for 2000, 2005 and 2010
remained the same; the United Kingdom, China, Hong Kong, United Arab Emirates,
USA and Switzerland.
Secondly, Switzerland and China, Hong Kong are among the fastest growing import
markets for gold Jewellery. In 2010, Switzerland became the largest import market but
shifted to second place behind China in 2011.
Thirdly, the main importers are developed countries which reflects the nature of this
commodity, a luxury commodity for which consumption will increase as income
increases as there is a high income elasticity of demand.
KEY TRENDS IN JEWELLERY CONSUMPTION

Jewellery consumption is equal to fabrication plus/minus jewellery imports/exports
plus/minus stocking/de-stocking by distributors and manufacturer
(World Gold Council 2012)
There are two trends worth noting where gold Jewellery consumption is concerned:
The first is that the largest consumer markets for gold Jewellery are: India, China
and the USA.
The three markets together accounted for 63% (1302.3 Metric tonnes) of total
consumption of gold Jewellery in 2012. India consumed 745.7 metric tonnes of gold
Jewellery in 2010; China 428 metric tonnes and the US 129 metric tonnes according to
the World Gold Council (See table 3). Between 2009 and 2010, consumption of gold
Jewellery increased by 69% most of this gold comes from India. The stock of gold held
by India represents some 11% of the global stock and is worth more than $950 billion17
The gold Jewellery industry in the US is a $30 bn industry employing about 169,281
persons (IBIS 2012). The vibrancy of the gold market in the US is linked to the
perception of gold as one of the must-have gift items. According to the World Gold
Council18the US market is domianted by gifting with over 50% of the total value of gold
jewellery at retail created by pieces over $1,000. Neverthelss, gold jewellery only
accounts for 10% of total Jewellery stores sales. Diamonds are in the lead with 45%
and colored gemstone Jewellery (rubied, sapphires, emeralds, etc.) with 8%. While the
US remains one of the largest consumer markets, growth has been negative since 2007
(IBIS 2012). Between 2009 and 2010, the decline in consumption was 14% (see table
3). Undoubtedly, this is linked to the economic recession that the country is currently
engulfed in. Since Jewellery is a luxury good dependent on consumers disposable
income, during periods of recession sales will fall as consumer spending declines.
17
18
All the Worlds Gold http://www.numbersleuth.org/worlds-gold/

http://www.gold.org/jewellery/markets/us/
23
Table 3: Gold Jewellery Consumption by Country: 2009-2012)

Gold Jewellery consumption by country (in metric tonnes)
Country
2009
2010
% change
India
Greater China
United States
Turkey
Saudi Arabia
Russia
United Arab Emirates
Egypt
Indonesia
United Kingdom
Italy
Other Persian Gulf
Countries
Japan
South Korea
Vietnam
Thailand
Total
Other Countries
442.37
376.96
150.28
75.16
77.75
60.12
67.60
56.68
41.00
31.75
745.70
428.00
128.61
74.07
72.95
67.50
63.37
53.43
32.75
27.35
69
14
-14
-1
-6
12
-6
-6
-20
-14
24.10
21.97
-10
21.85
18.83
15.08
7.33
1508.70
251.6
18.50
15.87
14.36
6.28
1805.60
254.0
-15
-16
-5
-14
20
1
2011
618.3
549.6
115.5
70.1
51.7
76.7
50.1
33.8
30.2
22.6
27.6
19
16.6
12.5
13
3.6
1711
261.1
World Total
1760.3
2059.6
17
1972.1
Source: SOURCE: World Gold Council Gold Demand Trends Report, Full Year 2010,
World Gold Council 2013
http://www.forexyard.com/en/news/Gold-jewellery-consumption-by-country-2011-0228T130619Z-FACTBOX
http://www.gold.org/investment/research/regular_reports/gold_demand_trends/
http://www.numbersleuth.org/worlds-gold/
The second is that growth in consumption is taking place mainly in the EastIndia and China are the fastest growing markets in the world
Countries in the East accounted for approximately 70% of the worlds gold jewellery in
2010 (see table 3 above). India and China are at the forefront of this growth. However,
Indias consumption in 2010 was almost double that of China. Growth in the Indian
market is likely to be sustained as accoridng to a study by the World Gold Council 75%
of Indian women say they are constantly searching for new designs. Jewellery sales in
the Indian market are estimated to reach US$37 billion in 2015 (World Gold Council
2011).
The World Gold Counil (2010) highlights one fundamental difference between the
chinese market and other markets and that is that Chinese consumers prefer higher
levels of purity. More than 80% of gold jewellery in China is made from 24 pure carat
gold.
There are several driving forces behind the growth of the Indian and Chinese markets.
these include:
1. The symbolism of gold. Gold is considered a symbol of power, strength and love.
Gold is the number one choice of wedding jewlery. Over 50% of gold Jewellery
bought in India are bought for weddings. According to the World Gold Council19
(2013) over 75% of all urban Chinese women own more one significant piece of
gold Jewellery partially because of the use of gold Jewellery in the wedding
ceremony.
2. Expanding economic growth. Both China and India are among the fastest growing
economies in the world. According to the Economist (2012), it is also a tradition in
India to launder undeclared income by converting it to gold which could also
contribute to the high demand for gold in India.
3. Culture. Gold Jewellery is an important aspect of Indian culture and mythology.
Gold Jewellery is passed on from one generation to another and is a popular
wedding gift given to daughters. According to the world Gold Council20 during the
festival of Dhanteras, the most auspicious day in the calendar just before Diwali,
there is a usually surge in sales of gold Jewellery.
4. Consumer perception. In addition to culture, consumer perception is an important
driving force for the increased demand of gold in both India and China. The World
Gold Council reports that Chinese women have indicated that wearing gold makes
them feel good.21 Both India and China have in recent times, been targeted for
branded Jewellery. According to Brough (2012) with declining sales domestically
some Italian jewelers are looking towards markets in emerging economies, such as
19
http://www.gold.org/jewellery/markets/india/
Ibid
21
http://www.gold.org/jewellery/markets/china/
20
25
Chinese and Russia, to boost sales. For instance, Italian Jeweller Damiani has
opened eight boutiques in China with plans to open another five.
SECTION 5: INDUSTRIAL ORGANIZATION AND GLOBAL

GOVERNANCE STRUCTURE OF THE GOLD JEWELLERY INDUSTRY
Governance within the context of value chains is defined by Gereffi (1994, p.97) (in
Gereffi and Stark 2011) as authority and power relationships that determine how
financial, material and human resources are allocated and flow within a chain. Value
chains can be classified either as producer-driven or consumer-driven to reflect where
the balance of power lies. There are five types of governance structures; markets,
modular, relational, captive and hierarchy (Gereffi and Fernandez-Stark 2011). These
governance structures are influenced by the inter-play of three variables: (1) the
complexity of the information between actors in the chain; (2) how the
information for production can be codified; (3) and the level of supplier
competence (Frederick & Gereffi, 2009; Gereffi et al. 2005) (in Gereffi 2007).
The impact of these variables on the determination of governance structures within a
value chain are depicted in table 4.
Table 4: Governance Structures in Global Value Chains
Governance Types
Relational
Captive
High
High
Market
Low
Modular
High
Ability to codify transactions
High
High
Low
High
Low
Competence of the Supplier base
High
High
High
Low
Low
Complexity of Transactions
Hierarchy
High
Degree of coordination
and power asymmetry
Low
High
Adapted from: Gereffi 2007
The Gold jewellery chain could be classified as a producer-driven chain given the fact
that most of the operations of jewellery manufactures are vertically integrated from the
design stage to the distribution segments of the chain. This means that jewellery
companies exert greater control over the design and price of jewellery than do
consumers. They also play a dominant role in the distribution of fabricated jewellery and
the control of the chain generally. With respect to governance, several structures are
27
evident at various stages of the gold Jewellery value chain. This supports work by Dolan
and Humphrey (2004) and Gereffit, Lee et al. (2009) (see Gereffi and Fernandez-Stark
2011) that GVCs are characterized by multiple an interacting governance structures.
Figure 6 captures the various governance structures evident in the gold jewellery chain
with explanations on the choice of structure at each stage.
Relational
Design
Research
Gold Mining
Market
Gold Refining & Trading
Fabrication
Distribution
Hierarchical
Figure 6: Governance Structures in the Gold Jewellery Value Chain
Research, gold mining and gold refining are governed by the market
This is because the information involved in transactions at these stages is simple.
Further, transactions are driven by price, with minimal scope for firms to dominate how
transactions occur. This is clearly evident when the nature of gold production and
trading is assessed. Table 5 shows the dominant gold producing firms globally. In 2012,
Canadian Barrick gold was the leading producer of gold, with operations in seven
countries. Producers of gold do not require input from purchasing companies in order
for production to occur. Producers and refiners of gold also have no impact over the
price at which gold is traded as the price is fixed. The fixed price is then used as a
benchmark price for the sale of refined gold. The system used to fix prices is called the
London Fix22 and occurs twice daily (at 10 am and 3 pm)23. Fixed prices are reported in
US dollars, Sterling and Euros and per troy ounce. The London fixing emerged way
back in 1919 when the Bank of England signed an agreement with seven South African
mining houses to have their gold refined in London and sold through N.M. Rothschild at
an agreed price. Presently, several other options exist for the trading of gold and the
setting of the price of gold, though the London Fix is still the benchmark used. Gold is
traded on several stock exchanges both in physical form and through derivatives,
through what are known as exchange-traded funds (ETFs) such as SPDR Gold Shares,
Gold Bullion Securities(London), Gold Bullion Securities (Australia), NewGold
Debentures, iShares Comes Gold Trust, ZKB Gold ETF, GoldIST, ETF Securtiies
Physical Gold etc (World Gold Council 2012). In 2011, about 2,100 metric tons of gold
appeared in exchange-traded funds (ETFs), 1,240 metric tons of which were in SPDR
Gold Shares (World Gold Council 2013).
In ability of producers and traders to influence directly the price at which gold is traded
means that purchasers of gold can easily switch from one supplier to another.
22
The banks currently involved in the fix are Bank of Nova Scotia- Scotia Mocatta, Barclays Bank,
Deutsche Bank, HSBC Bank US and Societe Generale.
23
Previously the price was fixed only at 10am however; in 1968 N.M. Rothschild introduced the 3pm fix to
coincide with the opening of the US market. This latter fix is considered the more important of the two.
29
Table 5: Top 10 Gold Producing Companies Globally

Rank
Name
Base
Operations Globally
2012 rev
(bil.USD)
2012 Profit
(mil.USD)
2012 cap
bil USD
Peru, Chile, Argentina,

Australia, Dominican Republic,
USA, Canada
14.3 (2011)
4,500
49.0
Feb.10
5.4
1,900
States, Australia, Peru,

Indonesia, Ghana, Canada,
New Zealand and Mexico
Australia, Ivory Coast,
Indonesia, Papau New Guinea
10.4
U.S., Tanzania, South Africa,

Namibia, Mali, Guinea,
Ghana, Brazil, Australia and
Argentina
Canada, Brazil, Argentina,
Chile, Mexico and Colombia
Canada, Brazil, Chile,
Ecuador, Russia and the U.S
South Africa, Ghana, Australia
and Peru
Barrick Gold
Canada
Goldcorp
Canada
Newmont
Mining
United
States
Newcrest
mining
Australia
Anglogold
Ashanti
South
Africa
Yamana Gold
Canada
Kinross Gold
Canada
Gold Fields
Eldorado Gold
South
Africa
Canada
10
Polyus Gold
Russia
2011 FY
production
tonnes
217.7
Reserves
Moz
Total
Resource
Moz
226.92
Cash Cost
2011 year
US$ total/oz
460
39.0 Feb.7
71.29
400
29.09
Mar.02
145-150
2011 est
46.3
60.1
Feb'11
85.0
81.59
534
142.67
591
4.4
1000
26.0
Feb.14
71.44 (2011
NC 49.95
77.0
$692
74.9
205.45
Newcrest
119.2
264.30
5.9
1300
16.7
Feb.28
122.75
2.2
500
3.9
(2100)
5.2
900
1.1
300
13.0
Feb.27
11.5
Jan.20
11.26
Jan.21
13.0
Feb.27
10.59
25.98
19.4
46.35
463
74.0 (2011)
59.17
92.06
596
98.80
78.9
270.28
795
18.69
18.67
20.2
405
74.1
211.92
617
Russia, Republic of
1.7
300
39.7-42.5
Kazakhstan, Romania and
2011 est
Kyrgyzstan
Source: http://goldinvestingnews.com/investing-in-gold/top-10-gold-producers, http://en.wikipedia.org/wiki/Largest_gold_companies
138.5
728
Jewellery design by independent or contracted designers is

relational governance.
The options for designing jewellery are: (1) Employed goldsmiths and gemologists; (2)
Independent designers; and (3) Customers.
Jewellery design through the use of independent or contracted designers is relational.
This is because Jewellery design involves the use of skills and technologies not easily
learned but that requires time and training to acquire. Jewellery designs are usually
done by certified gemologists or goldsmiths trained through the apprenticeship system,
which is the practice of small jewelers. Large companies may also outsource the design
of jewellery to independent jewelers as companies seek out exceptional designers upon
whom new collections could be developed. For this reason, Jewellery companies tend
to offer differential products or unique pieces based on quality (caratage), brand,
signature collections, combination with other precious metals and gems. However,
given the nature of the Jewellery market there may be interactions between designers
and Jewellery companies and companies may also seek to take into consideration
customer feedback regarding designs and caratage and further, requests for custommade pieces. Therefore, there must be a level of trust between designers and
companies. Particularly, since relational linkages take time to build. Jewellery
companies often use licensing arrangements to secure Jewellery designers and as a
way of solidifying linkages. These arrangements are usually long-term for branded
boutiques that sell based on brand. For instance, since 1974, Tiffany and Co. has been
the sole licensee for the intellectual property rights necessary to make and sell
Jewellery and other products designed by Elsa Peretti and bearing her trademarks.
Given the features of this market, especially the high-end, luxury aspect, the costs and
difficulties required to switch to a new partners tend to be high. Some companies build
entire collections on the designs of a few designers.
31
Jewellery design, fabrication and distribution done by firms with

vertically integrated operations is hierarchical governance.
The majority of the firms operating in the gold jewellery industry have vertically
integrated operations that extend from design to distribution. This is true of both large
and small firms alike.
Table 6 shows the leading jewellery companies globally based on retail value; ehile
table 7 shows examples of some of the leading jewellery companies operating in the
high-end segment of the global jewellery market. Vertical integration is an expressly
stated production strategy of several of the leading jewellery companies such as Bulgari
and Tiffany & Co. For example, the Italian company, Bulgari, which is one of the leading
jewellery companies globally, has a production strategy that is based on vertical
integration of the entire production process, from research and development to the
finished product.
Jewellery pieces are designed and fabricated in-house through goldsmiths and
gemologists, with some companies allowing for customer input. This coordination over
the design and fabrication of jewellery occurs because firms derive their competitive
edge on their ability to come up with unique designs and high quality pieces that sets
them apart. This means that designs cannot be easily codified but jewelers must rely on
select designers who can deliver the combinations of quality and style that companies
require.
Vertical integration is also used as a strategy to improve scale and the competitiveness
of companies globally. For instance, in 2002, as part of a strategy to become one of the
leading watch makers in the world, Bulgari acquired, Italian jewellery manufacturer
Crova. In 2005, the company bought Swiss watch making companies Cadrans Design,
a producer of dials for high-end watches, and Prestige D'Or, a leader in the production
of steel and precious metal watchstraps24. In 2009, the company realized the results of
24
http://en.bulgari.com/about/about_bulgari.jsp?cat=cat00105#homeAB.jsp?cat=cat00105
its efforts as it was able to produce and assemble in-house the Bulgari BVL 465 Caliber.
Table 9 shows other examples of recent investments by leading jewelers companies,
which includes mergers and acquisitions and joint venture arrangements. These are
more dominant at the manufacturing stage and also encompass use of brand names.
These reflect attempts by firms to consolidate their operations in a bid to increase their
share of the global market. However, these investments would also lead to further
concentration and dominance of firms in the value chain.
Jewelers can also exert some degree of control downstream over the production of
diamonds. Gold jewellery is often produced in combination with other metals and
gemstones such as diamonds. Jewelers such as Bulgari, use the Kimberley process
international certification scheme to select suppliers of diamonds. Most of these
suppliers
are
members
of
the World
Diamond
Council,
which
encourages
implementation of the Kimberley Process. All suppliers of diamonds must produce a five
year warranty stating that they do not sell conflict diamonds before they can secure
buyers. 25.
Following internationally-set standard is another way of companies gaining a
competitive edge in the global jewellery value chain. Some of the leading jewelers are
members of the Responsible Jewellery Council (RJC). The RJC is a not-for-profit
organization that focuses on the quality and human, social and environmental ethics of
the diamond, goldsmithing and platinoids value chain26. Bulgari is a RJC member.
Richemont, the group company under which Van Cleefs and Arpels and Cartier falls, is
also a member of the RJC.
There are also ISO relevant standards that producers must comply with in their
operations.
Examples
(Jewellery-Ring-sizes-Definition,
(Jewellery-Fineness
of
include:
measurement
precious
metal
and
ISO
8653:1986
designation);
alloys);
and
ISO/AWI
ISO
9202
10713:1992
(Jewellery-Gold alloy coatings).
25
26
http://en.bulgari.com/about/about_bulgari.jsp?cat=cat00105#homeAB.jsp?cat=cat00105
http://www.responsiblejewellery.com/
33
Jewelers also control the distribution of their jewellery through self-operated boutiques
chains nationally and internationally to maintain their brand. For instance, Tiffany & Co.
has 275 stores globally. Table 8 shows leading players in the various distribution
channels for gold jewellery. In India, the major national chains include Tata Group and
Gitanjali Gems Ltd. In China leading national Chains include the Pranda Group but
China is also home to international chains such as Piaget, Harry Winston, Graff and
Tiffany & Co. In the US leading national chains include Zale Corporation and Kay
Jewellers; international chains include Tiffany & Co. and Piaget.
Table 6: Leading Jewellery Companies Globally Based on Retail Value in 2011, USD Billion
Company
Headquarters
Retail
Number of
value
Stores
1. Chow Tai Fook Jewellery Group Ltd.
China
4.6
1000
2. Compagnie Financire Richemont
Switzerland
4.5
3. Tiffany & Co.
United States
3.9
275
4. Signet Jewelers Ltd.
United Kingdom
3.4
1443
5. Shanghai Lao Feng Xiang Co. Ltd.
China
3.3
6. Shanghai Yuyuan Tourist Mart Co. Ltd.
China
2.7
7. Zale Corp.
United States
1.8
8. Pandora A/S
Denmark
1.7
9. LVMH Mot Hennessy Louis Vuitton SA
France
1.5
3204
10. Swarovski AG
Austria
1.3
1218
1778
11. Gitanjali Group

India
2.0
4164
Source: Euromonitor International http://www.jckonline.com/2012/12/31/around-world-inJewellery-sales
35
Table 7: Leading Luxury Jewellery Designers and Stores Globally

Companies
Country of
Origin
1. Buccellati
Italy
2. Tiffany &
Co
USA
3. Piaget
Switzerland
4. Cartier27
France
5. Chopard
Switzerland
6. Bulgari28
Itlay
Number of Locations
Globally
US, Canada, France, Paris, Italy, United Kingdom, Russia,
Japan, Australia
Canada, Mexico, Brazil, USA, Japan, China, Korea, Taiwan,
Australia, Singapore, Macau and Malaysia, United Kingdom,
Germany, Italy, France, Spain, Switzerland, Austria,
Belgium, the Czech Republic, Ireland, Netherlands, the
United Arab Emirates
Switzerland USA, Canada, Japan, China
Switzerland, France, Germany, Italy and Spain, China/Hong

Kong, Japan, USA, Canada
Switzerland, Japan, USA, Singapore
Number
of
Stores
275
Number of
Employees
9,900
25,000
(group)
300
120
1,750
Examples of Collections
Crepe De Chine, Magnolia, Macri,

Classica, Etoilee, Ondine, Signatura
Woven Collection, Keys Collection
Gouverneur Dragon
and Phoenix www.piaget.com
Sortilges, Cartier, Naturellement
collection Trinity Collection
Quartz, L.U.C, Casmir, La Vie en
Rose, Pushkin, Copacabana, and
Chopardissimo
BVLGARI
US, France, Switzerland, Japan, Qatar, Australia,

295
3,815
Singapore, South Korea
http://jewelrista.com/blog/2011/08/03/the-world%E2%80%99s-top-10-Jewellery-designers/, http://www.buccellati.com/en/start.html,
http://www.parkviewgreen.com/eng/shop/watches-Jewellery/chopard/, http://investinginafrica.net/wp-content/uploads/2012/10/Richemont-2012-AnnualReport.pdf
27
Cartier is a Maison of Richemont group of companies

Production sites in Italy and Switzerland, 41 companies
28
Table 8: Leading Players in the Distribution of Gold Jewellery, by Category

Distribution Categories
Major Players
US
Branded
Boutique
chain
Retailers
China
Independent
(Authorized)
Retailers
National Chains
Cosmos
Zale Corp. and Kay
Jewelers, Finlay
Jewelers
Tata Group (Tanishq and Gold Plus brands), Gitanji

Gems Ltd. (Gili brand), Reliance Industries, Shree
Ganesh Jewellery House Limited
Pranda Group, 3D- Gold

Jewellery Holdings ltd., Luk
Fook Jewellery, and
Shanghai Lao Feng Xiang
International
Chains
Signet Jewellers
Damas Jewellery, Swarovski
Piaget, Harry Winston, Graff,

Tiffany & Co.,
Discount
Merchandisers
Department
Stores
NonStore
Retailers
India
Online shopping
TV home
stations
Tiffany & Co.Piaget

Wal-Mart, K-Mart,
Target, Sans Club,
Costco
Boscovs, Federated,
JC Penny, Sears
Roebuck, Macys
Bidz.com, Blue Nile,

eBay, Amazon,
Ice.com,
Overstock.com,
JewelleryTelevision.co
m www.zales.com, ,
www.pagoda.com and
www.peoplesjewellers
.com. www.tiffany.com
QVC, ShopNBC,
Shop-At-Home,
Italy
Bulgari,
Buccellati
Big Bazaar, Reliance, Ambanis, K Rahejas, Bharti

AirTel,
Debenhams, Lifestyle Stores, Pantaloon Retail
(India) Limited, Reliance Trends, Shoppers' Stop,
Star Bazaar
totaram.com, meenajewelers.com,
aumkaarfashions.com, amritasingh.com
STAR CJ Alive, HomeShop 18
Mainland; Dashang Group,

Isetan and Mitsukoshi
Department Stores
Coin,
LaRinascente
Hong Kong; Harvey Nichols,

Lane Crawford, Seibu
Department Stores,
Daimaru, Takashimay,
Parco
ctfeshop.com.
QVC/CNR
QVC, for
you, HSE24
37
Others
Source: Various
ACNTV, Jewellery
television ,Americas
Auction network,
Home Shopping
Network, Liquidation
channel (Jewellery
channel)
Mail-order, armed
forces retailers, pawn
shops
Travel
catalogues
Table 9: Recent Investments by Leading Jewellery Companies, affecting the Governance of the Value Chain
Company Name
A.J Jewellery29
Gitanjali Group
Stage of the
Value Chain
Distribution
Nature of Investment
Mergers and Acquisitions
Merger with Italian Jewellery institution
British jewellery distribution company Alfred Terry
Gitanjali Group
Manufacturing
Italian jewellers, Stefan Hafner, Porrati and Nouvelle Bague
Bulgari
Manufacturing
Chinese jewellery maker Grown Aim

2005, Swiss watchmaking companies: Cadrans Design (dials for
high-end watches), and Prestige dOr, (metal and precious
metals watchstraps).
Joint Ventures
Gitanjali Gems Ltd Joint Venture

with Damas (50-50), 2003
In 2000 high-end watchmaking brands Daniel Roth and Grald

Genta
(high-end
watchmaking
brands).
Bulgari
Design (Brand)
Gitanjali Group
Design (Brand)
Bulgari
Manufacturing
(Component)
Crova in 2004
in August 2008, bought 60 per cent of its commercial and brandrelated operations.
'Nakshatra', the premium brand of jewellery promoted by
Diamond Trading Company (DTC)
2005; Italian leather-goods company Pacini, renaming it Bulgari
Accessories
Richemont
Manufacturing
(Component)
2007; Swiss watchmaking companies Finger, (cases for high-end

complicated watches); and Leschot, (watchmaking machinery)
component manufacturing facilities
of Geneva-based Roger Dubuis in 2007
Tiffany & Co.
Manufacturing
and
Distribution
Signet
Source: Company Websites
29
30
Polo Ralph Lauren

The collection
of luxury watches
Incorporation of Swiss company by
the Swatch Group
for the design, engineering,
manufacturing,
marketing,
distribution and service of
TIFFANY & CO. brand watches.30
Signet acquired Ultra Stores, Inc. (Ultra) on October 29, 2012
http://www.ajjew.com/newsite/en/node/15
Under the agreement, Tiffany and its affiliated companies may only purchase Tiffany & Co. brand watches from the Swatch Group.
39
Distribution of gold jewellery reflects a mixture of relational and

hierarchical governance
Leading jewelers operating in the high-end segment of the market use several channels
to distribute jewellery produced. Some of these channels reflect the relational
governance structure, such as the use of authorized retailers. Authorized retailers are
independent suppliers in that they are operating under their own duly constituted
company, however, companies whose jewellery they are retailing can exert some
degree of control through the authorization process. To become authorized, retailers
must demonstrate the ability to supply the product in an environment that the brand
owner supports. Bulgari for instance, in selecting its retailers for watch distribution
requires that the retailer must be able to offer impeccable customer service.
There is mutual dependence under this arrangement as independent suppliers make
profits from becoming authorized retailers while jewellery companies enjoy the benefit of
increased marketing of their products. Retailers are also selected to allow brands to be
ideally positioned in strategic markets. Especially since the competitive landscape is
characterized by fragmentation (in the US for instance, the largest 50 companies
generate about 40% of revenue) and demand that is driven more by quality and design
than price. Therefore, effective marketing (visibility of the product) becomes important.
SECTION 6: GUYANAS CURRENT PARTICIPATION IN THE GLOBAL

GOLD JEWELLERY VALUE CHAIN
The figure 7 identifies where Guyana is present in the global value chain. These are at
the mining, refining and fabrication stages. However, the countrys presence is more
significant at the mining stage. Gold mining is an important economic activity in Guyana
as the country possesses rich deposits of gold and other mineral resources such as,
diamonds, manganese and rare earth elements (Thomas 2011).
Jewelry Design
Research
Gold Mining
Gold Refining
Jewelry
Marketing and
Gold
Fabrication
Distribution
Recycling
Figure 7: Guyanas Participation in the Gold Jewellery Value Chain
In recent years there has been a gold rush owing to favourable prices globally gold
(Thomas 2011). This has seen gold mining, in particular, increasing significantly. For
instance, between 2008 and 2010 the value of gold output expanded by 23%.
Concurrently, exports of gold have expanded so much so that gold is now the number 1
exported commodity from Guyana. Figure 8 reveals a spike in the value of gold exports
starting from 2005.
41
Figure 8: Domestic Exports (US$ Mn), 1990-2011

The gold industry in Guyana has somewhat of an enclave structure with small artisanal
gold miners alongside large scale foreign investors, however, small scale mining
dominates. The rush for gold has seen an expansion in both industries. Figure 9, shows
that between 2005 and 2010, the small and medium scale sector expanded from 49.6%
to 76.6%. The number of mining licenses given out to large scale miners increased by
50% in 2011. In 2011, two new large scale mining companies were added to the
industry, E.T.K incorporated and Guyana Goldfields Inc. Guyana Goldfields estimates
that one of its mining areas has the potential for about 6.88 million ounces of gold
(measured and inferred) (Thomas 2011).

Comparatively, gold jewellery fabrication and design is economically smaller than gold
mining. The export of gold jewellery is also significantly lower in value when compared
to exports of raw gold. This reflects a significant manufacturing void in the economic
structure of the country as most of the countrys exports are primary products. This is
reflected in table 10 which shows the top 10 merchandise exports from Guyana in 2010
based on data obtained from Datamonitor. Whereas in 2010 the value of gold exports
was US$ 440 Mn exports of gold jewellery was only US$3.9 Mn.
Table 10: Top 10 Exports from Guyana, 2010
Rank
1
Top 10 Exports from Guyana, 2010

Name
HS4
7108
Gold
Value
$440,822,299
1006
Rice
$183,665,932
15.99%
2606
Aluminium ores
$149,061,412
12.98%
1701
Raw sugar, cane
$102,120,914
8.89%
306
Crustaceans
$35,149,291
3.06%
2208
$26,700,964
2.32%
4407
Alcoholic preps for beverages

Wood sawn or chipped of a thickness exceeding 6
mm
$25,753,010
2.24%
7102
Diamonds
$12,577,128
1.09%
1703
Molasses
$11,178,033
0.97%
10
4409
Wood continuously shaped along any of its edges
$10,206,224
0.89%
11
303
$9,858,230
0.86%
Frozen fish, excluding fillets
Percent
38.38%
43
12
304 Fish fillet or meat
$9,254,788
0.81%
Fish flours, meals & pellets for human consumption
$9,088,934
0.79%
Wood in the rough
$8,660,944
0.75%
Ferrous waste and scrap
$7,980,233
0.69%
Fish, excluding fillets

Hoopwood; split poles; piles, pickets and stakes of
wood
Plywood, veneered panels and similar laminated
wood
$7,614,697
0.66%
$7,258,403
0.63%
$5,905,814
0.51%
13
305
14
4403
15
7204
16
302
17
4404
18
4412
19
4406
Railway cross-ties of wood
$4,351,725
0.38%
20
7113
Jewellery of precious metal
$3,927,925
0.34%
Source: Datamonitor
Guyanas main export markets for gold jewellery are in the Asia, North America, Europe
and the CARICOM. In 2011, the top ranking markets for exports from Guyana were the
United Aram Emirates , Surinae and the Bahamas.
Table 11: Export Markets for Gold Jewellery, 2008-2011
Partner
Destinations for Exports of Gold Jewellery* (20082011) US$ Mn

2008
2009
2010
2011
Suriname
106
Barbados
$23,379
87
USA
7,683
25
Trinidad and
Tobago
Canada
221
98
5,894
United Arab
Emirates
Belgium
3,027,270
2,703,386
894,761
Bahamas
World
193
7,910
3,928,047
Notes: *89731 SITC Rev 3- Jewellery of precious metals
19,555
$2,746,320
SECTION 7: INSTITUTIONAL FRAMEWORK FOR GOVERNANCE

OF THE LOCAL VALUE CHAIN
The institutional framework focuses on the local conditions and policies impacting the
value chain (Gereffi and Fernandez-Stark 2011). These conditions can act either as
catalysts or barriers to the effective upgrading of a countrys participation in the global
value chain. The institutional framework in this aspect of the paper will focus on; a
stakeholder analysis and identification of the key factors impacting the growth and
development of gold jewellery industry in Guyana. However, this must be preceded by
an examination of the local value chain.
45
GUYANAS VALUE CHAIN FOR GOLD JEWELLERY
Jewelry Design
Gold Mining
Gold Board
Gold Dealers
(Government-
& Traders
Jewelry Design
tools (moulds,
casting etc)
Owned)
Pawn
shops
Laboratory
Non-store/non-
Jewelry
preparatory Services
licensed traders
Fabrication
Jewelry
Distribution
Channeks
Specialist
stores
Jewelry
chain
retailers
Informal
Buyers
Figure 10- Guyanas Value chain for Gold Jewellery Manufacturing
The following observations are noteworthy regarding the value chain for gold jewellery
in Guyana:
When the number of firms in the value chain are assessed, there is a
disproportionately large amount of mining companies compared to jewelers
which points to the fact that there is insufficient manufacturing of the primary
resource extracted. The main operators in the mining industry are: Omai Gold
Mines Limited, Correia Mining Company ltd, Forage Orbit Inc and Major Miners
Inc. (See table 12 for main players in the industry).
Gold refining and trading takes place through a semi-autonomous government
agency. All raw Gold extracted in the mining industry must be declared to the
Guyana Gold Board. The Guyana Gold Board is the sole entity authorized to buy
and sell raw Gold in Guyana (at the London fix). Specifically, its functions are:
1. To carry on the business of trading in gold
2. To secure at all times an adequate supply of gold and to ensure its
equitable distribution at fair prices
3. To purchase all gold produced in Guyana
4. To sell all gold in Guyana and to sell gold out of Guyana
5. To engage in other related commercial or industrial activities...
There also exists an informal (unlicensed) sector that undertakes gold trading.
The difference between Goldsmiths and jewelers in the local context is principally
that Goldsmiths are metalworkers who tend to work only with gold whereas
jewelers are a little higher in the value chain and craft Jewellery from both gold
and other gem stones. Many jewelers work with Goldsmiths. All goldsmiths and
jewelers must be licensed to operate. The main goldsmiths and jewelers in the
industry include: Kings Jewellery World which dominates the industry, L.
Seepersaud Maraj and Sons, Gaskin and Jackson Jewelers, Topaz and Steves
Jewellery.
47
Many of the jewelers in Guyana rely on a system called casting for the design of
Jewellery, which is essentially crafted by hand. Casting requires the use of
moulds which are tools used to pre-design Jewellery. There are two sources of
moulds. Locally, some jewelers make their own moulds containing original
designs. Moulds are initially made from silver (which has to be imported) and
then are reproduced using rubber and wax. However, the alternative is to import
moulds manufactured in countries such as China, which apparently is the
preferred option among jewelers. Other Jewellery design tools are also imported
mainly from the United States. Most of the jewelers self-import the tools required
for Jewellery manufacturing. However, there is one jeweler (Scotts Jewellery
tools and variety stores) that is also involved in the importation and distribution of
Jewellery tools. This jeweler works with goldsmiths on a contractural basis for the
design and fabrication of Jewellery. However, all tools and equipment are
supplied by them.
There are essentially two levels on which Jewellery is distributed. Firstly,
jewelers also operate Jewellery stores and retail Jewellery as their own exquisite
designs. Secondly, some jewelers have chain stores or several stores around
the country and supply their various branches with Jewellery. Most of the
jewelers sell only to local customers and benefit from repeat customers to build
their clientele base. There are also sales to tourists which is essentially the
primary means of getting indigenous Guyanese designs exposed to the
international market. The other two channels depicted in the framework represent
channels of purchasing jewellery from consumers.
Table 12: Main Players in the Gold Jewellery Manufacturing Sector In Guyana
Main Players In The Gold Jewellery Manufacturing Segment In
Guyana
Position in
chain
Gold Mining
the
value
Gold Dealers/Traders
Company name
Guyana Goldfields
Omai Gold Mines Limited.
Correia Mining Company Limited
Forage Orbit Incorporated
Guyana Goldfields Inc
Major Miners inc.
SKS Mineral Trading
Pure Diamond Inc.
Steves Jewellery

Goldsmiths/Jewellers
King's Jewellery World
L. Seepersaud Maraj and Sons
Gaskin and Jackson Jewelers
Topaz
Steves Jewellery
Royal Jewel House
Jewellery Design Tools
R. Seeram's Jewellery
Support Services
Wartsila Operations Guyana Inc.
Energy Agency
Guyana Energy Agency
STAKEHOLDER ANALYSIS
Table 13 summarizes the key stakeholders having an impact on the performance of
firms in the local gold jewellery industry. These encompass governmental ministries,
semi-autonomous agencies, private entities and industry associations.
All governmental organizations play an important role in the industry and have power
and influence to shape how the development of the industry unfolds as they shape the
environment under which firms must operate. These organizations address issues
related to the environment, compliance with labour regulations, small businesses,
energy, trade, tax, investment and standards.
Industry associations such as the private sector commission, the Guyana Manufacturers
and Services Association and the Georgetown Chamber of Commerce are important to
the development of the gold industry in Guyana as they perform general functions that
would benefit all manufacturers such as policy advocacy and training. While these
organizations are important their level of power and influence over the industry is
restricted by the limited participation of gold jewellery firms in these organizations. Only
three jewellery manufacturers are members of the Guyana Manufacturers and Services
Association.
At the gold mining stage, the organizations involved in the regulatory management of
the industry are not only highly important to the industry but can exert significant power
and influence over the development of the sector through their impact of the supply of
raw gold. The Guyana Geology and Mines Commission for instance is an important
regulatory agency in the mining industry. All mining equipment must be registered and
licensed by the company to operate. Additionally, Gold refining is done by the state49
owned, Guyana Gold Board. This is also the only government-directed agency
responsible for the buying and selling of raw gold in Guyana. This company has an
impact over the purity of gold
Table 13: Key Stakeholders in the Gold Jewellery Industry in Guyana

Description
Key Interest
Level of
Importance
in the
industry
Small Business Unit
Enabling
Promoting the development of small
Medium
Environment
businesses
Ministry of Natural
Natural
Sustainable management of the
Medium
Resources and the
Resource
natural resources of Guyana
Environment
Management
Ministry of Foreign Trade
Foreign Trade
Securing trade concessions
High
Ministry of Labour
Labour
Enforcement of compliance with ILO
High
Regulations
Core labour regulations.
Environmental Protection
Environmental
Enforcing compliance with
High
Agency
Regulations
environmental regulations
Guyana Energy Agency
Energy
Regulating the generation, supply and
High
use of energy in Guyana
Guyana Power &Light
Energy
Regulating the generation, supply and
High
use of energy in Guyana
Guyana Revenue
Tax Authorities
Compliance with tax, trade and border
High
Authority
laws
Guyana Office for
Business
Trade and Investment facilitation
High
Investment
Development
National Bureau of
Standardization Enforce compliance with quality
High
Standards
Standards
Guyana Manufacturers &
Industry
Supporting manufacturers through
High
Services Association
Associations
technical assistance, policy advocacy
Georgetown Chamber of
Industry
Promoting and protecting the interests
Medium
Commerce & Industry
Associations
of members by fostering ethical
practices in commerce and trade a
Private Sector
Industry
Advocating for the development of the
Medium
Commission
Associations
private sector
Commercial Banks
Financing
Providing a range of financial
High
instruments
Guyana Gold Board
Regulatory
Purchase and refining of raw gold
High
Guyana Gold and
Industry
To promote the interests of miners
High
Diamond Miners
Association
Association
Guyana Geology and
Regulatory
Regulating the exploration and mining
High
Mines Commission
of mineral products in Guyana.
Stakeholder
Power &
Influence
over sector
development
Medium
Medium
High
High
High
High
Medium
High
High
High
Medium
Low
Medium
High
High
High
High
FACTORS AFFECTING INDSUTRY DEVELOPMENT

A. GENERAL FACTORS
Economic conditions:
Though, Guyana has not reached a level of political stability equivalent to what obtains
in its sister CARICOM countries, economically Guyana has made significant strides
towards economic stability. Under the World Bank criteria, Guyana is now classified as
a lower middle-income country. Consequent to increasing growth rates, macroeconomic
performance has improved. Figure 11 captures growth rates for Guyana from 2000 to
2012. Growth in Guyana has increased marginally over the years. Negative growth
rates were experienced in 2000, 2003 and 2005 (year of the big flood). For 2006, 2007
and 2011 growth rates were above 5%.
Figure 11- Growth Rate of Real GDP, Guyana: 2000-2012
However, in spite of positive growth rates over the last couple of years, Guyanas macro
performance still requires further improvement in order to support business
development. On the global competitiveness index Guyana has a rank of 109 for
macroeconomic conditions with a score of 4.02. This is less than its overall score, which
51
is 114. Poverty though it has reduced is still somewhere around 38% based on the
latest estimates by the Bureau of Statistics.
Labour market size:
The size of the labour market in Guyana is conducive to expanding the gold jewellery
industry locally and improving Guyanas participation in the global gold jewellery value
chain. The countrys working age population (persons 15- 65 years who are capable of
being engaged in productive activities) is approximately 60% of the total population and
has marginally increased since 1980 in response to total population trends. The labour
force participation rate (ratio of the labour force to the working age population) however,
remains low, falling from around 60% in 1992 to about 54% in 2008. Labour force is
defined as the number of persons of working age who are gainfully employed or are
seeking to become gainfully employed. This indicates that a significant proportion of the
countrys working age population (40%) is economically inactive (see table 14). The most
recent estimate of the unemployment rate in Guyana places it at 11%.
In addition, the country has a high migration rate among persons who have received
tertiary education. The latest estimate by the World Bank suggests that 86% of the
countrys university graduates migrate to developed countries. This high level of migration
is related to the poor capacity of the country to absorb all the graduates that are produced.
Therefore labour is available to work with reasonable skills set. Undoubtedly, industry
specific training would be required as this is currently lacking.
Table 14: Activity Status by Gender: 1992/93 and 1999
Activity Status by Gender
Activity Status
All Guyana
Male
Female
1992/93
1999
1992/93
1999
1992/93
1999
Labour Force Participation Rate
60
57
81
76
39
39
Inactive
40
43
19
24
61
61
Working (% of Labour Force)
88
91
92
94
82
86
Unemployed (% of Labour Force)
12
9
8
6
18
14
Source: Guyana Survey of Living Conditions, 1999
Social Conditions
Social conditions in Guyana have improved in tandem with improved economic
performance. For instance, there are has been significant reductions in the male and
female labour force participation rates, From 81% and 39% respectively in 1993 to
about 81% and 61%, respectively in 2010.
Additionally, Guyana has a literacy rate of 98% for females and 99.1% for males. The
country ranks highly on the Education Index of the United Nations Human Development
Report. Guyana is ranked at number 37 which is behind only Cuba and Barbados in the
Caribbean and Argentina in South America.
Unfortunately in Guyana there are no training institutions providing skills development
related to Jewellery manufacturing thus jewelers rely on the apprenticeship system
where young goldsmiths/jewelers are trained by senior goldsmiths/jewelers.
Ease of Doing Business (Institutional Conditions)
Guyanas institutions need to improve in order to allow for greater impact on business
development. Institutions as considered in this context include tax, labour education and
other agencies that have an impact on industry growth and development. These can be
assessed by examining the World Banks doing business index. 31
Guyanas rank in the World Bank ease of doing business index was 114 out of 184
Countries. This was below the average rank of 97 for the Latin American and Caribbean
region and, when compared to CARICOM states, was higher than only Suriname (164)
and Haiti (174) (See figure 12).
31
http://www.doingbusiness.org/data/exploreeconomies/guyana/
53
Figure 12- Guyana, Ease of Doing Business Rang, 2012
Table 15 shows the variables measured for the ease of doing business index and gives
an indication of the institutions in Guyana where the greatest need for improvements
exist. Guyanas ranks are better for dealing with construction permits and enforcing
contracts and worse for getting credit and electricity, resolving insolvency and paying
taxes. Guyanas ranking on the ease of paying taxes (118) are even lower than its
overall ranking (114) and is lower than the average (114) for the Latin American and
Caribbean region and higher than only Haiti (123) and Jamaica (163). Therefore the
institutions with the greatest need for reform in how they perform administratively are;
financial, tax and electricity agencies.
Table 15: Guyana, Ease of Doing Business Rank by Criteria
Topic Rankings
DB 2013 Rank
DB 2012 Rank
Change in Rank
Starting a Business
89
80
-9
Dealing with Construction Permits
29
25
-4
Getting Electricity
148
142
-6
Registering Property
114
106
-8
Getting Credit
167
165
-2
Protecting Investors
82
79
-3
Paying Taxes
118
113
-5
Trading Across Borders
84
81
-3
Enforcing Contracts
75
74
-1
Resolving Insolvency
138
141
3
Corporate tax regulations:

One of the challenges to the competitiveness of businesses operating in Guyana is the
level of corporate taxes firms are required to pay. Generally, there are about 9 taxes or
mandatory contributions firms must pay in Guyana. For example (see table 16);
corporate income tax at a rate of 35%; employer paid- social security contributions at
the rate of 8%; property tax (to central and local authorities) at a rate of 0.5%; capital
gains tax at a rate of 20% and value-added tax at a rate of 16%. These tax payments
amount to about 36% of the profits of firms. These taxes are not only an economic
burden to firms but also an administrative burden as about 263 hours of time that could
have otherwise been used productively must be spent filing taxes.
Table 16: Guyana, Burden of Compliance with Taxes and Mandatory Contributions
Tax or
Payments
Time
Statutory
Tax base
Total tax
Notes
mandatory
(number)
(hours)
tax rate
rate (%
on TTR
contribution
profit)
Corporate
income tax
Employer paid Social security
contributions
Property tax
central authority
Property tax
local authority
Capital gains tax
Fuel tax
48
35%
taxable profit
22.8
12
48
8%
gross salaries
8.8
equity
1.2
0.5% and
0.75%
various rates
1.1
1
1
20%
various rates
Vehicle
registration tax
Stamp duty
G$30,000
assessed
property value
capital gains
fuel
consumption
fixed fee
Value added tax

(VAT)
Totals:
12
167
G$ 1 per G$
1,000
16%
transaction
value
value added
35
263
1
1
0.3
0
0
small
amount
not
included
36.1
Available infrastructure:
Infrastructure is one of the basic requirements for improving competitiveness. On the
global competitiveness index Guyana has a rank of 109 for infrastructure with a score of
2.91 which is lower than its overall score is 107 signalling that infrastructure is not of
sufficient quality to support effective business development
55
Effective policies that support the development of SMEs:

Guyana has in recent times embarked on the formulation of a number of policies to
support the development of SMEs. These policies recognize the importance of SMEs to
business development in Guyana, which was estimated at about 30% of GDP. In the
Latin American region SMEs are said to account for nearly 99% of business and 67% of
employment32. The key challenge facing SMEs in Guyana is access to finance. In the
doing business Index Guyana receives its lowest rank (167) for ease of accessing credit
which is almost two times worse than the average for the Latin America and Caribbean
region (87) and is in fact the worse in the region.
The following are some of the policy initiatives that are in place or that being pursued:
1. Passing of the Small Business Act (March 2004) from which will be established a
Small Business Council, Small Business Bureau and Development Fund to
provide financial and other forms of support to improve the productivity and
competitiveness of small businesses.
2. Small Business Development Finance Trust
3. Guyana Small Business Association (GSBA),
4. Linden Economic Advancement Programme,
5. the Institute of Private Enterprise Development,
6. Women of worth
7. National Competitiveness Council, the small business representative
Apart from these initiatives, other wider development initiatives being pursued will also
support the development of SMEs. These include:
1. The National Development Strategy
2. The National Competitiveness Strategy33
3. The Low Carbon Development Strategy (LCDS) will support business
development on a low-carbon model and allow for improved access to financing
through the following mechanisms:
32
National Competitiveness Strategy. http://www.competitiveness.org.gy/index.php?start=1
33
Ibid
a. A Credit Guarantee Fund (CGF) to meet shortfalls in the collateral

requirements of small businesses seeking loans through the commercial
banking system as long as these are for ventures that are in low carbon
sectors.
b. An Interest Payment Support Facility will help the MSE pay off a
percentage of its interest obligations on the loan
c. A Grant Scheme- to assist vulnerable persons to access financing for their
existing or potential business venture.
d. A Skills Voucher Scheme for technical training in business management,
marketing, accounting and financial management.
4. The Guyana Youth Business Trust (GYBT) is an NGO that provides financing
opportunities for young people (aged 18-35yrs) interested in becoming
entrepreneurs but who cannot access conventional financing.
5. Recently, the government has announced plans to launch a Credit bureau34 by
the end of 2013
Summary: As depicted in table 17, overall, social, economic and political conditions will
have an average impact on industry growth and development.
Table 17: Summary of General Enabling Factors for Industry Development
General enabling factors
Political and economic stability
Labour market size
Social Conditions
Cost and ease of doing business (Institutional
Conditions)
Corporate tax regulations
Available infrastructure
Effective policies that support the development of
SMEs (access to finance)
Overall
34
Score
Average
Strong
Average
Weak
Weak
Average
Average
Average
Guyana Times April 6, 2013 Credit bureau34 to be up by year-endwww.guyanatimesgy.com

57
B.
INDUSTRY SPECIFIC FACTORS
Intellectual property protection:

Unlike, other CARICOM States, Guyana has failed to enact and ensure compliance with
intellectual property laws as there is no articulated intellectual property rights policy in
the country, which is key to creative industries of which gold jewellery is one. Further,
many of the laws currently on the books are outdated. This is the case for the main IP
laws enacted by the Legislature such as the Tradesmarks Act (1973); the Patents and
Designs Act (1973) and the Copyright Act (1956) 35.
Convention Establishing the World Intellectual Property Organization (October 25,
1994); the Paris Convention for the Protection of Industrial Property (October 25, 1994);
the Berne Convention for the Protection of Literary and Artistic Works (October 25,
1994); the World Trade Organization (WTO) - Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement) (1994) (January 1, 1995)
Availability of qualified human capital:
While Guyana performs well where education is concerned, within the gold jewellery
industry availability of qualified human capital is poor as there are no training institutions
providing skills development related specifically to Jewellery design and fabrication.
Jewelers tend to rely on the apprenticeship system. Some jewelers have staff that have
received external training such as through the Gemological Institute of America. The
leading jewelers around the word utilize the skills of trained gemologists and therefore
partially derive their competitive edge from skills in designing jewellery. In India, where
Jewellery fabrication is not done by skilled human resources, the cost advantage comes
from scale. Guyana has neither advantages.
The availability of key inputs:
Gold is the main input used in the production of gold jewellery. Access to gold presents
no challenge in the Guyanese market as it is one of the main outputs of the country.
35
http://www.wipo.int/wipolex/en/profile.jsp?code=GY
Further, figure 13 show that gold output, following a slump in 2005 when Guyana
experienced significant floods, has been steadily increasing. In 2011, output in troy
ounces was 363,083. It is also worthwhile to note that much of the raw gold produced in
Guyana is exported rather than retained domestically for value adding. In fact, in 2011,
export volumes rose by 14.9% to 347,850 troy ounces from 302,654 troy ounces in
2010. Export volumes in 2011 represented approximately 96% of total gold output for
the year.
Figure 13- Output of Gold: 2000-2011
Labour costs and regulation:

Guyana is competitive where wages are concerned. Average per capita income in
Guyana is US$3,00036 which is lower than in all of the other CARICOM states except
Haiti. However wages have been increasing in Guyana. This is evident by movements
in monthly minimum wages of the public sector, the largest employer in Guyana. In
2000 the minimum wage stood at US$102.8. It has risen and now stands at US$171.
Policy incentives:
36
http://data.worldbank.org/country/guyana
59
There is general support for business development through the provision of various
incentives including tax holidays, waivers of customs duties, export tax allowance.
SMEs are not excluded from accessing these benefits.
Summary: as reflected in table 18, overall conditions within the industry can have an
average impact on further growth of the industry.
Table 18: Summary of Industry Specific Factors
Industry specific factors
Intellectual property protection
Availability of qualified human capital
Labour costs and regulation
Infrastructure
Policy incentives
Institutionalization
Participation in global networks
Overall
Score
Weak
Weak
Strong
Average
Average
Average
Average
Average
SECTION 8: UPGRADING IN THE GLOBAL VALUE CHAIN

Upgrading is an assessment of the global economy from the bottom-up perspective
(Gereffi and Stark 2011). It focuses on the strategies used by countries and other
stakeholders to improve their positions in the global economy in order to improve the
benefits of participating in the global economy. There are four types of upgrading
(Humphrey & Schmitz, 2002 in Gereffi and Stark (2011)): (1) product upgrading; (2)
Process upgrading; (3) functional upgrading37; (4) Chain or inter-sectoral upgrading38.
Specifically to Guyanas participation in the global value chain, the upgrading
trajectories can be differentiated based on the stages of the value chain (see table 19).
At the mining stage, Guyana should focus on consolidation of its position as an
exporter of raw and refined gold. Though the majority of god output is based on
artisan or small mining, the country has attracted a number of foreign companies that
are also involved in exploration. The best upgrading trajectory for Guyana therefore is to
consolidate its participation in the chain by seeking to expand, on a sustainable basis
bearing in mind the environmental and health implications, gold mining, particularly by
large scale miners. This of course would require that proper incentives are in place to
attract foreign investment. However, given the dominance of SMEs in the industry there
should be focus on safeguarding their growth in the industry especially home-grown
SMEs. Presently, the SMEs sector of the industry has a significant presence of Brazilian
and Venezuelan nationals. In addition, firms should focus more on tapping into the fast
growing markets for gold given that price is fixed internationally. In this regard, the US
may the most feasible market for Guyanese firms given its Geographic proximity and
the fact that gold is a bulky product for which transport costs would increase over long
distances.
Guyanas participation in the global value chain is weakest at the design and fabrication
stages and at these stages greater value is created from the raw product, gold. It is
37
entails acquiring new functions (or abandoning existing functions) to increase the overall skill
content of the activities (Gereffi and Fernandez-Stark 2011)
38
where firms move into new but often related industries (Gereffi and Fernandez-Stark 2011)
61
therefore at these stages that the greatest scope for improvement exists. In this regard,
the options for upgrading are:
1. Product upgrading. Product upgrading, as defined by Humphrey and Schmitz
(2002) (in Gereffi and Stark 2011), describes a situation where firms move into
more sophisticated product lines. Jewellery exports in Guyana can upgrade in
this regard by focusing on the production of jewellery with higher caratages.
There is certainly a demand for such products in the fast growing Chinese
market. According to the World Gold Council more than 80% of gold jewellery in
China is made from pure 24 carat gold. This fact has led the World Gold Council
to launch K-gold which a branded expression of 18 carat gold from which new
designs and concepts can emerge to take advantage of demand patterns in
China. Guyana has the advantage of access to gold and other precious metals,
the majority of which are still exported in the primary state.
For small firms the main challenge of upgrading along this line is competitively
accessing and penetrating markets. Price is not so much a challenge, though its
importance is not disputable as global competition in the jewellery market is
based more on quality and design capacity. However, it is necessary to consider
that the strategy of many of the lead firms globally is that of vertical integration
which gives them more price flexibility and dominance in the global jewellery
industry. Another challenge is the lack of opportunities for the training of
emerging goldsmiths locally, which may be important to increasing design
capacity.
2. Market entry upgrading Most of the gold jewellery produced is consumed
domestically. There are fast growing export markets in China and India. These
markets are only now becoming targets of the high-end luxury segments. There
is therefore scope for further penetration of these markets with low-end products.
However, it is important to note that the possibilities of upgrading in this regard,
particularly as it relates to targeting these markets are very small for two main
reasons. Firstly, China is increasing mass production of low cost jewellery items,
even substitute items in the costume jewellery segment, with the use of newer
technologies, which means that exporters would find it difficult to compete with
Chinese-made products. Further, presently, most of the jewellery tools used
domestically are imported from China. Secondly, China has been imposing
punitive import duties on jewellery items, which are supposedly being done to
protect domestic manufacturers.39
3. End market upgrading. Firms can seek to access new end markets such as
improving their presence in the Caribbean and South American markets or
adopting a niche marketing strategy of targeting the Diaspora in markets such
the USA, Canada and Europe. The US for instance is the third largest consumer
market for gold jewellery and according to the National Jeweler magazine, is a
market where the majority of jewellery retailing occurs through non-brand
Jewellery shops that account for 79% of Jewellery-only retailers in the US. There
is therefore significant scope for SME involvement in this type of product
upgrading.
The Caribbean market, in spite of its smallness is not yet saturated with
Guyanese-made jewellery. This is evident when export volumes for 2008 to 2011
are examined (see table 11). Export values are very minuscule. For instance, in
2010 only US$98 worth of jewellery was exported to Trinidad and Tobago, the
only CARICOM country to which jewellery was exported for that year. There is
therefore scope for large Guyanese Jewellers such as Kings Jewellery World to
increase their presence in the Caribbean by opening brand shops in the
territories of several CARICOM countries particularly since the CSME allows for
cross border establishment of businesses.
There are further advantages of getting into markets with a large Diaspora such
as the US and the Caribbean market; the first is geographical proximity and the
39
http://www.bullionstreet.com/news/india-us-become-top-gold-Jewellery-exporters/3282
63
second is preferential access. Preferential access is one of the main reasons

India has been able to increase its share of the global gold jewellery market,
overtaking Italy. Indian Jewellery makers, unlike the Italians can export a certain
volume to the United States without paying any import duties. Guyanese firms
benefit from preferential access to the Caribbean market through the Caribbean
Single Market arrangement and to the US and Canadian markets through the
Caribbean Basin Initiative and CARIBCAN, respectively.
There is the additional option of seeking to exploit some of the emerging
distribution channels in the US, which are outperforming the traditional retails
channels.
Examples
include
formulating
arrangements
with
discount
merchandisers such as Wal-Mart or television retailers. The challenge with this

option where SMEs are concerned however is that since the strategy of discount
merchandisers is more on price; SMEs would have to operate at a fairly large
scale to be competitive. Further, the jewellery industry is Guyana is fragmented
with no agency with direct responsibility for coordinating the sectors
development apart from the Guyana Manufacturers and Services Association.
Other countries such as Italy and India have jewellery manufacturers
Associations or Councils. Emphasis will therefore have to be placed on
coordinating the industry so that common challenges are addressed.
4. Process upgrading. According to Gereffi and Stark (2011) process upgrading
transforms inputs into outputs more efficiently by reorganizing the production
system or introducing superior technology. Most of the jewellery made by
jewellers in Guyana is hand-made using moulds and other tools either selfmanufactured or imported from China and the US. In fact, most of the worlds
Jewellery, including Jewellery of luxury brands such as Buccellati is handmade.
As a strategy to improve productivity, SMEs can seek to utilize more
sophisticated machine techniques and move towards machine-made Jewellery.
This should allow for finishing and quality to be improved.
Notwithstanding the benefits of such a strategy there is one important fact to

consider that led to Italy sliding as the leading manufacturer of Jewellery globally
and that is, manufacturing costs. As indicated in the previous section Guyana
does poorly where infrastructure for jewellery manufacturing is concerned and
that is primarily because of high energy costs. Guyana will have to compete with
producers in China and India that have the benefit of economies of scale in
exporting jewellery.40 To upgrade in this regard, a critical consideration for SMEs
would be access to finance to increase investment in more sophisticated
machines.
The feasibility of this upgrading trajectory is also questionable when one
considers that Guyana is a labour abundant country with an unemployment rate
of about 11%. There is therefore a need to create labour-intensive jobs.
40
http://www.ibtimes.co.uk/articles/401180/20121103/gold-world-council-damiani-italy-india.htm
65
Jewellery Fabrication and Design
Table 19: Upgrading Opportunities for Guyana in the Gold Jewellery Value Chain
Participation
Upgrading trajectories
Scope for SMEs to Enter
in the GVC
Gold Mining
Consolidation of position
SMEs already dominate and will therefore not
by attracting more firms
find it difficult to enter
Product upgrading
Global competition is based more on quality
and less on price which requires economies of
scale
Market entry upgrading
End market upgrading
Process upgrading
There are fast growing export markets in China

and India that are only now becoming targets
of the high-end luxury segments. There is
therefore scope for further penetration of these
markets with low-end products.
Scope for SME involvement where market
niches are targeted by focusing mainly on the
Caribbean market or targeting the Diaspora in
the US market.
Incorporation of technology to improve

productivity. Most jewellery is hand-made
machine made jewellery can be pursued.
Possibilities for Upgrading

Increased market access
Focusing on producing
Jewellery with greater
caratage.
Very small given mass

production in China and
punitive import duties.
Taking full advantage of

preferential trade policies
between Guyana and the US
and Caribbean markets and
exploitation
emerging
distribution channels in the
US
Key Conditions for

upgrading
Policy incentives
Market access
- Access to Finance
- Ability to establish
linkages
- Access to skilled
labour
- Access to Finance
- Access to markets
Access to labour
Access to Finance
Ability to establish
linkages
Ability to coordinate
industry
domestically
Access to labour
Access to Finance
SECTION 9: RECOMMENDED UPGRADING STRATEGIES AND

ASSOCIATED POLICY MECHANISMS
Given the upgrading trajectories identified in the foregoing section and the
associated conditions for upgrading, the most probable strategy for upgrading that
SMEs should follow is a strategy of improving designs, production and branding of
jewellery made in Guyana, using sophisticated machinery and production
techniques. However, hand-crafted and machine-made jewellery can be produced
for niche markets; including the Caribbean market and Diasporic markets. At the
design stage firms can emphasize the creation of collections of jewellery items that
reflect the culture of Guyana and the wider Caribbean. Further, firms can seek third
party certification to increase confidence in the quality of jewellery items produced.
To realize such a strategy it may be necessary to pursue the following
recommendations (see figure 14):
1. Increased facilitation by the office for Investment, of participation of SMEs in
trade fairs in the Caribbean and elsewhere in order to allow firms to be able to
form and solidify business linkages.
2. Increase the capacity of technical institutions such as the Government Technical
Institute and the Guyana Industrial Training Centre to provide training in
gemology to increase the skill level of goldsmiths and jewelers in the industry
which would create the multiplier effect of increasing the design capacity of
jewelers. Increasing design capacity can be an important source of competitive
strength as was proven with Gitanjali Gems out of India.
3. Push for implementation of current policy proposals aimed at increasing access
to finance of SMEs as discussed in a previous section of the paper.
4. Create a jewellery association to increase coordination of the industry locally.
This would allow for more advocacy on behalf of the industry and for common
challenges to be addressed.
67
Increased
participation in trade
fairs
Jewellery
association
Design-ProductionBranding for Niche

markets
Training by
technical institutions
Policy proposals for

increasing access to
finance
[
Figure 14- Recommended Upgrading Strategies for Guyana
SECTION 10: CONCLUSION

This paper examined the global value chain for gold jewellery in order to ascertain the
prospects of Guyanese jewelers increasing their presence on the global market through
increased exports of jewellery. An assessment of the governance of the value chain
reveals a producer-drive chain characterized by hierarchical governance primarily
because the manufacturing and distribution strategies of leading firms is based on
vertical integration. This fact can impact how effectively Guyanese Jewellers that are
predominantly
non-brand
SMEs
can
penetrate
world
markets.
Nevertheless,
recognizing the fact that the jewellery market is fragmented with leading firms operating
mainly in the high-end segment, there is scope for Guyanese firms to increase exports
in the low-end segment. Prospects of increased exports are greater when consideration
is given to targeting certain end markets such as the Caribbean or CARICOM market
where Guyana benefits from preferential access but has not saturated with Guyanesemade jewellery. Further, scope exists for targeting Diasporic segments of markets in
Developed countries.
The realization of these strategies necessitate the implementation of certain policy
mechanisms to address critical weaknesses in the industry such as access to finance
by SMEs and the availability of skilled labour.
69
SECTION 11: KEY INFORMATION SOURCES

1. All the Worlds Gold http://www.numbersleuth.org/worlds-gold/
2. Bank of Guyana Annual Report 2011
3. Bringing the Gold Market to Investors. http://www.spdrgoldshares.com
4. Bullion Street. India, US become top Gold jewelry exporters (November 5th 2011)
http://www.bullionstreet.com/news/india-us-become-top-gold-jewelry-exporters/3282
5. Dave Brown. Top 10 Gold Producers. http://goldinvestingnews.com/investing-ingold/top-10-gold-producers
6. David Brough. India, U.S. trump Italy as top gold jewellery exporters. (November
2,
2012)
http://in.reuters.com/article/2012/11/02/precious-italy-jewellery-india-us-
idINDEE8A108G20121102
7. Economist News Magazine. Jewellers in India Chains of gold Indias
conglomerates
muscle
in
on
local
gold
sellers.
(May
12th
2012)
8. Expanding Coverage to the 16 Largest Gold Miners in the World. (April 2 6 ,
2009).
http://www.goldstockstrategist.com/2009/04/expanding-coverage-to-16-
largest-gold.html
9. Jewelrista- Jewelry Design Magazine. 2011. The Words Top 10 Jewelry
Designers:
http://jewelrista.com/blog/2011/08/03/the-world%E2%80%99s-top-10-
jewelry-designers/
10. Jewelers
Information
Source
http://www.jewelersinformationsource.com/tag/distribution-channel/
11. Gereffi, Gary & Fernandez-Stark, Karina. 2011. GLOBAL VALUE CHAIN Analysis: A
Primer. Center on Globalization, Governance & Competitiveness (CGGC) Duke
University
12. Gereffi, Gary 2007. The Gold Jewelry Value Chain in the District of Valenza, Italy.
Duke
University,
Durham
Centre
for
Globalization,
Governance
and
Competitiveness
13. Gitanjai
Gems
Ltd.
Annual
Report
2012.
http://investors.gitanjaligroup.com/phoenix.zhtml?c=196729&p=irol-reportsannual
14. Gold Prospectors Association of America. http://www.goldprospectors.org/
15. Guyana Geology and Mines Commission. The Mineral Industry in GuyanaSummary
16. Guyana
Office
for
Investment.
2006.
Guyana
Investment
Guide.
www.goinvest.gov.gy
17. Guyana Times. Credit bureau1 to be up by year-endwww.guyanatimesgy.com
(April 6, 2013)
18. HML
Modemarketing.
2010.
Distribution
http://hml-
Channels
modemarketing.de/53.0.html?&L=1
19. IBIS World. Jewelry Stores in the US Market Research Report (December 2012)
http://www.ibisworld.com/industry/default.aspx?indid=1075
20. Indian Law Office Higher Standards making a difference for you.
21. Industry IQ- Media Marketing Inc. (2008)
22. Industry IQ. Jewelry Stores- Industry Overview. www.industryiq.biz
23. Jerin Matthew. International Business Times Gold. India and US Overtake Italy
as
Top
Gold
(November
Exporters.
3,
2012).
Ahttp://www.ibtimes.co.uk/articles/401180/20121103/gold-world-council-damianiitaly-india.htm
24. Jewellery. http://en.wikipedia.org/wiki/Jewellery
25. Largest gold companies. http://en.wikipedia.org/wiki/Largest_gold_companies
26. Liezel Hill. Gold mine costs up 4.1% in Q3. Mining Weekly Report (26th November
2010).
http://www.miningweekly.com/article/gold-mine-costs-up-41-in-q3-report-
2010-11-26
27. National
Competitiveness
Strategy
Unit.
Government
of
Guyana.
ttp://www.competitiveness.org.gy/index.php?start=1
28. Responsible Jewellery Council. http://www.responsiblejewellery.com/
29. Reuters. FACTBOX-The top 10 gold companies based on production.
(September
2008).
http://uk.reuters.com/article/2008/09/08/gold-conference-
idUKN0845219520080908
30. Shopping channel. http://en.wikipedia.org/wiki/Shopping_channel
31. Shree Ganesh Jewellery House Limited. Annual Report, 2009-10
71
32. Thomas, 2011. Guyana Economic Performance and Outlook (The recent
Scramble for Natural Resources). Institute of Development Studies, University of
Guyana.
http://idsguyana.org/articles/professor-clive-thomas/new-menu/113-
guyana-economic-performance-and-outlook-the-recent-scramble-for-naturalresources.html
33. Thomas Chaize (Dr.) Energy and Mining Newsletter. Gold production in the world
(2009). http://www.dani2989.com/gold/goldprod0509gb.htm
34. The Gem & Jewellery Export Promotion Council (GJEPC) Government of India.
Gems
and
http://www.indiainbusiness.nic.in/industry-
Jewellery
infrastructure/service-sectors/retailing2.htm
35. Tiffany & Co. Annual Report 2012
36. United National Development Programme. 2012. Country programme document
for Guyana (2012-2016)
37. United Nations Commodity Trade Statistics Database. http://comtrade.un.org/db/
38. U.S. Geological Survey, Mineral Commodity Summaries, January 2013
http://minerals.usgs.gov/minerals/pubs/commodity/gold/mcs-2013-gold.pdf
39. U.S.
Gold
Refining
(Primary)
Companies.
http://www.manta.com/mb_35_E815305L_000/gold_refining_primaryWorld
Council.
2013b.
Bringing
the
Gold
Market
to
Gold
Investors
http://www.spdrgoldshares.com/
40. World Gold Council. Investment. http://www.gold.org/investment/
41. World Gold Council. 2010. China Gold Report (Year of the Tiger)
42. World Gold Council. 2011. India Heart of Gold; Strategic Outlook
43. World Gold Council. Annual Report 2012
44. World Gold Production. http://www.goldsheetlinks.com/production2.htm
45. World Gold Council. 2010. India Heart of Gold Revival
46. World
Intellectual
Property
Organization.
Guyana.
http://www.wipo.int/wipolex/en/profile.jsp?code=GY
47. World Bank. 2013. Economy Profile Guyana. Doing Business 2013- Smarter
Regulations
for
Small
and
Medium-Sized
http://www.doingbusiness.org/data/exploreeconomies/guyana/
48. World Gold Council. India. http://www.gold.org/jewellery/markets/india/
Enterprises.
49. World Gold Council. China http://www.gold.org/jewellery/markets/china/

50. World Gold Council. USA http://www.gold.org/jewellery/markets/us/
51. World
Gold
Council
Gold
Demand
Trends
Report,
Full
Year
2010,
http://www.gold.org/investment/research/regular_reports/gold_demand_trends/
Company Websites
http://www.goldcorp.com/English/Investor-Resources/Reports-and-Filings/Annualhttp://www.barrick.com/operations/default.aspx
http://www.goldfields.co.za/
http://www.yamana.com/
http://www.anglogoldashanti.com/default.htm
http://www.kinross.com/about-kinross.aspx
http://www.buccellati.com/en/start.html
http://www.parkviewgreen.com/eng/shop/watches-jewelry/chopard/
http://www.buccellati.com/en/start.html
http://investinginafrica.net/wp-content/uploads/2012/10/Richemont-2012-AnnualReport.pdf
www.graffdiamonds.com
http://www.ajjew.com/newsite/node/6
www.piaget.com
http://www.3d-gold.com/hk/en/
www.chopard.com
73
www.bulgari.com
www.mikimotoamerica.com
www.harrywinston.com
www.buccellati.com
www.vancleef-arpels.com
http://www.brand.swarovski.com/Content.Node/home.en.html#/en/aboutus/factsfigur
es
http://www.zalecorp.com/history.aspx
http://www.chowtaifook.com/en/ourstory
http://www.lvmh.com/investor-relations/documentation/reports
http://www.signetjewelers.com/sj/pages/operations
http://investors.gitanjaligroup.com/phoenix.zhtml?c=196729&p=irol-reportsannual
SECTION 12: Appendix

SWOT Analysis of the Guyanese Gold Jewellery Industry
Strengths
Weaknesses
Access to precious metals and Industry is dominated by SMEs
gems
(diamonds)
locally
(mining and quarrying accounts
for 50.2% of exports)
Increased Foreign Investment Fragmented
in gold mining
Opportunities
Rising world prices for gold
Abundance of labour
Infrastructure
Strategic access to North

American, South American and
Caribbean markets
Limited training opportunities

locally for emerging goldsmiths
Preferential
access
to
CARICOM market- exploitation
of low-end market locally
Increased
targeting
of
Guyanese Diaspora in key
markets
Increased
targeting
of
emerging markets such as
China where demand is based
more on caratage
Branding by leading companies
locally such as Kings Jewellery
World
Mainly primary production
Threats
Increased competitiveness of India
where production is also of handcrafted of Jewellery and high in
caratage.
Most of the worlds Jewellery,
including Jewellery of luxury brands
such as Buccellati is handmade.
75

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Working Paper

Global Value Chains Analysis of the Gold Jewellery

Global Value Chain Analysis of the Gold Jewellery Industry: Upgrading

Dianna DaSilva- Glasgow*

*Dianna DaSilva-Glasgow is a Researcher 2 at the Institute of Development Studies

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

Published by the Institute of Development Studies,

ISSN 1019- 1305

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

SECTION 3: INPUT-OUTPUT STRUCTURE OF THE GLOBAL VALUE CHAIN

FOR GOLD JEWELRY

STRUCTURE OF THE GOLD JEWELRY INDUSTRY

JEWELRY VALUE CHAIN

LOCAL VALUE CHAIN

SECTION 9: RECOMMENDED UPGRADING STRATEGIES AND ASSOCIATED

SECTION 11: KEY INFORMATION SOURCES

SECTION 12: APPENDIX (SWOT analysis of the Guyanese gold jewellery

Table 8: Leading Players in the Distribution of Gold Jewellery, by Category

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

Appendix 1- SWOT Analysis of the Guyanese Gold Jewellery Industry

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

3. How is the value chain governed?

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

See Gereffi (1999) and Humphrey and Schmidt (2002)

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

SECTION 3: INPUT-OUTPUT STRUCTURE OF THE GLOBAL VALUE

Mom and Pop shops

Research and Development

Figure 1: Input-Output Structure of the Gold Jewellery Value Chain

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

Description of the global value chain for gold jewellery

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

the architectural and functional knowledge of fabrication techniques, composition,

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

The first three facilities are leased.

2. Authorized Retailers: The difference between branded boutique chains and

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

Box 1: Authorized Retailers for Piaget in the USA and Canada

Authorized Retailers in Canada: Richmond, Toronto, Vancouver (2 locations), Montreal

3. Non-brand Jewellery Shops: These refer mainly to small family Jewellers,

4. Department Stores: Department stores are generally involved in the retail

distribution of clothing and accessories, including Jewellery. Department stores

5. Discount Merchandisers: Discount merchandisers sell jewellery on the basis of

6. Wholesale Distributors: Wholesale distributors act as intermediaries between

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

7. Non-store retailers: Non-store retail avenues include mail-order catalogs, direct

SECTION 4: KEY MARKET TRENDS IN THE GLOBAL GOLD

Total Gold Supply in the World

Source: World Gold Council, 2013

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

standard industrial classification system. Data is obtained from the UNCOMTRADE

Figure 2: Trends in Exports of Gold Jewellery, 2000-2010

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

Figure 3: Top 20 Exporters of gold Jewellery, 2011

Several trends are observable from the figures:

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

Figure 4: Trends in Imports of Gold Jewellery, 2000- 2010

Figure 5: Top 20 Importers of Gold, 2010

From the figures the following key trends are observable:

IDS/UG 50th Anniversary Working Paper Series- Working Paper 6/12

KEY TRENDS IN JEWELLERY CONSUMPTION

All the Worlds Gold http://www.numbersleuth.org/worlds-gold/

Table 3: Gold Jewellery Consumption by Country: 2009-2012)