Mar. 25, 2016

Suttipong Damrongsakul


Suttipong Damrongsakul

President, Thai Gem and Jewelry Traders Association

"Above all, the Bangkok Gem and Jewelry Fair is considered among the top five international trade shows."


Suttipong Damrongsakul has a degree in political science from Ramkhamhaeng University and master’s degrees from Roosevelt University, Chicago and Thammasat University. From 1981 to 1990 he was General Manager of Piyawat Group, becoming Managing Director of SAHA Union Group between 1991 and 1997. He is currently Managing Director of Gemopolis Industrial Estates and the President of the Thai Gem and Jewelry Traders Association.

What are some of the main tasks and major milestones of the Thai Gem and Jewelry Traders Association?

Above all, the Bangkok Gem and Jewelry Fair is considered among the top five international trade shows along with the JCK in Las Vegas, Baselworld in Switzerland, and Vicenzaoro in Italy and Hong Kong. With 3,000 exhibitors and 30,000 visitors and buyers, it is the second most important gems fair in Asia after Hong Kong. The Thai gem and jewelry industry has posted annual export revenues of $13 billion in the past five to six years, making us the third biggest contributor to Thai GDP after automotive and electronics, and we have been one of the top five sectors for Thailand for the past 20 years. Furthermore, the industry is constantly growing. Gem and jewelry is a luxury industry, which makes it sensitive to global and national economic fluctuations. Whenever there is a crisis, a decline, or any problem, this industry is quickly affected. About 90% of Thai entrepreneurs are manufacturers and exporters. We have more than 1,500 members, and they are all wholesalers and exporters, 100%. Our role is to help promote their products on the market and the industry in general, internationally, building competitiveness and awareness of our products, and dealing with obstacles and problems faced by our members. In all, from upstream raw material suppliers all the way through to downstream retail, 1 million people are involved directly or indirectly in some way with our association.

Could you tell us about the Bangkok Gem and Jewelry Fair and how it boosts the Thai gem and jewelry industry, both locally and abroad?

The importance of the fair and the industry in general is attested to by the Prime Minister's attendance last year. In terms of attendance, we can compete with the best in the world, including the leaders of the sector globally, such as Italy; therefore, it is big deal and a major event not just in the gem and jewelry sector but through all sectors. We had a talk with the Prime Minister about the fair and about various problems and difficulties we've been facing in the sector, particularly concerning Thai competitiveness vis-á-vis other markets and countries in the region, proposing certain regulatory and tax changes to boost export revenues, and the Prime Minister was in agreement with us. Our aim is to make Thailand the world hub in colored stones, in which Thai labor can be considered the best in the world. Hence, we are promoting Thailand as the world leader in colored gems, and the Prime Minister has also supported us in that objective, telling us he would give his full support in that field. The success of our sector is the success of Thailand.

What factors have been driving the strong growth of the gem and jewelry sector in Thailand in recent years?

As mentioned, export revenues of $13 billion put us in third position worldwide. The secret of our success is simple: quality products and skilled labor. We have a long and illustrious tradition in this sector; therefore, it is natural that our products would be in high demand worldwide, which is why we are looking for more support from the government. We are huge contributors to the Thai economy through our sources of revenues, jobs, taxes, even contributing to Thailand's image abroad. One issue is the 20% import duty plus 7% VAT that Thais pay on imported materials and jewelry. We want those buying and selling at the fair in Bangkok to be exempted from that tax. The government has been receptive and supportive in pushing many issues that we have proposed, such as the exemption of VAT for cut stones, gemstones, and diamonds. There is no import duty on those, but there is 7% VAT. It has accepted that and we expect an exemption on cut stones to be in place soon. We also proposed exemption from import duties and VAT for rough stones. We have the most skilled workforce in the world in terms of cutting, polishing, and working rough stones. Therefore, we proposed that all those rough and raw materials come in through the door openly and freely, because we have high value added on those products once finished. The government has also heeded us on that. We need more materials coming into our country; therefore, we need to ditch the 7% VAT on those. They should come in freely as raw materials, which come mainly from Africa, Sri Lanka, and Burma. The government could then maybe apply a tax on the finished product instead.

Do you think ASEAN and AEC integration will affect the industry in a positive way?

We are the leading country in terms of gems and jewelry manufacturing in ASEAN in terms of volumes and capability. However, other countries, such as Vietnam, Indonesia, the Philippines, and Burma have cheaper labor and also the raw materials that we don't have. Soon we expect those countries will have their own jewelry industries, too, because they won't just be content with selling rough stones to Thailand anymore. They will want to build up their own gem and jewelry industries, using their advantage of cheap labor and access to raw materials. Sure they don't have the skills Thais have, but those skills can be learned. Vietnam is already catching up to Thailand rapidly. Even Thai companies are starting to relocate to gain access to cheaper labor and acquire those raw materials more easily and cheaply. This is one of our concerns in Thailand and a reason why we need to keep increasing our capabilities, so we can move away from our neighborhood and differentiate ourselves more, while also developing strategies that will keep giving Thailand an edge in new ways. For example, we are in touch with our ASEAN neighbors, educating them and also trying to attract them to the Bangkok Gem and Jewelry Show so they can use that to access world markets and attract buyers for themselves and their respective national industries. We are also bringing India, China, Australia, Korea, Japan, and New Zealand into the equation, helping each other promote and develop the sector.

What are your expectations for 2016 in Thailand and for the sector in particular?

I anticipate the same rate of growth as 2015. We need to stay on track and maintain our precision. In 2015, export figures grew more than 5%, which contrasts with a general economic decline. That was surprising for many considering we are seen as a luxury industry. I expect the same for 2016. We hope the US market will grow, considering the US market once accounted for 25% of our global exports—today that's dropped to just 15%. We hope the US market once again moves up to 20%, or even 25% if possible now that things are picking up there again.