18th Year March - May 2005
   
 

 
 
     
Chantaburi Brand
Madagascar Amends Export Regulations
 
 
 
 
           Nowadays, we take less time driving to Chantaburi than going  somewhere  in Bangkok as the BKK-Chantaburi motorway road surface is so  smooth that we  cannot help speeding up to 150 km an hour. For the distance  of 250 kms, it is no  longer adventurous for we spend only two and a half  hours on the road before  entering Chantaburi.
 
 
 
          Recalling past memories (now you can imagine how old the auther is  talking more and more about the past) twenty years ago, we spent four hours  on the bus along the rocky road to go to this town.
 The people managed a two-day trip from Thursday to Saturday to hunt  continuously for gemstones with the hope to find some way to make profit. The  charming and attractive trading style on free-trade basis under the brand  name  of 'Synthetic, imitation and treated stones: returnable', which is always  followed by the teasing expression, 'Are expensive stones returnable?' The 'No  sir' answer challenges people to prepare themselves with better knowledge  and a better price.
 
 
 
            My first experience in Chantaburi was really unforgettable. In fact, we  are used to the trading offices or jewelry shops in Bangkok where business is  made in pri-vate areas with sound security.
 To our surprise, in Chantaburi we  happened to see the small brokers taking  their gemstones out of their old shirts  and trading is always made open air, or  more officially, on the tables rented by  traders along the road in the gem  market. During price negotiations,the stones  will be sealed in a parcel while  the middleman, called 'broker', will act on  behalf of both seller and buyer.  Upon each business conclusion, he will be  rewarded a percentage of the  selling volume. Sometimes it can take the whole  day long to finalize the deal.  The author has many friends who tell that being a  broker is sometimes an  interesting extra job for they can earn more income  than being a tailor all week  long. Some brokers take it as profession; some  cannot because of the  uncertainty in earnings.
 
 
 
          The so called 'Synthetic, imitation, treated stones: returnable; expensive  stones: no return' trading attracts not only Thai merchants but also foreigners  worldwide who pour into this town in order to buy something to make profit in  their own country. The author has one foreign friend who has heard about the  reputation of Chantaburi. Once when he came to visit the Bangkok show in  Sirikit Convention Centre, he was stopped by a notice inviting interested  persons for a one-day trip to Chantaburi. He decided to join this excursion  and succeeded in buying some pieces of gem-stones and eventually made  some profit. Since then he has come back and forth to Thailand as a stone  dealer. As a matter of fact, to be a stone merchant, apart from basic technical  knowledge, one needs to have a lot of experience and expertise.
 A gemological graduate himself has to start from zero if he wants to be trained  to be a stone merchant and Chantaburi is always chosen as a venue for one to  try his luck.
 
 
           
However, now this market has become dull and boring. Many friends  are  starting to complain about the fact that there are no more interesting stones  to  see and the market has been quiet so far. I understand that we all would  love  to draw back to the former atmosphere, wouldn't we?

          The theme of doing gemstone business is to be able to give a full  explanation of the stones with honesty and sincerity. In case of any mistakes,  the seller is always ready to take back the stones with a full refund for the  policy is that consumers are to be protected. It is true that we all try to offer  something better with more advanced technological quality improvement but  this will only be done along with customer's confidence which is the core  concept. At this point, it is vital to call for all concerned qualified personnel to  brainstorm and find out which direction the quality development technique  should go. The colorful gemstone is in fact always eternal, charming and  amazing. It is very obvious that in a window that displays only diamond jewelry  anywhere in the world, even in the top most exhibition, we will spend not more  than five minutes there while we can spend the whole day long in the colored  stone section.

          Unfortunately, Thai people lack knowledge and expertise marketingwise.  Apparently, when the baht was devaluated from 25 baht against one dollar to  forty baht, we, Thai people, have had to buy diamond which costs US$1,000  at 40,000 baht while we sold a US $1,000 gemstone at US$600 on the same  day. Nevertheless all jewelry shop owners prefer to sell diamond for its better  price. We stone people feel very painful about this.

          Hence, it is not yet a deadlock so far as we still have some good  experience provided we do something about this deteriorating situation among  ourselves. Fundamentally speaking, the doers are the ones who know best and  who will be able to explain to prospective buyers all the facts. Or, it is not  necessary to ask for the certificate of the stone as the result is always confusing  where we see claims that three gemological institutions issued three different  comments for one same stone. This is the reason why we should come to sit  down and talk in the interest of developing criteria for stones which will be  strictly handled and followed. It is also advisable, and all will be clarified, if we  rely on our gemological institute of Thailand that has its network with world  leading laboratories.
          We all have to help our society and buy back the legend that Thailand is  the world capital and center of gem-stones in order that we all will enjoy and  be happy with business as in the past.
 Photos Courtesy of Tony Brooke.
 
 
 
 
 
 
       Madagascar is a country rich in natural resourceif that include a wide variety of gemstone depos Its such as ruby,  sapphire, quartz, tourmaline and many others. From the air heading toward the capital, Antananarivo, you get a view of the  magnificence of Madagascar that is a patchwork of rice paddies, cassava fields, rivers running red with clay, vast expanses
 with sparse vegetation, and beautiful rock formations.
 
 
 
 

 
 
     Hidden in this natural beauty are tn deposits of Madagascar, which were discovered over one hundred years ago. In  the  early 90s the southern part of the country was getting a lot of attention from miners but by 1998 the focus was on  llakaka  where the discovery of a huge sapphire belt brought an influx of foreign investment that now includes  approximately thirty  Thai-owned companies. To help address the issues of the burgeoning gem industry, the World Bank,  in May 2003,  approved a US$ 32 million loan agreement to help Madagascar manage its mineral resources more  effectively.
     Delegations from the Malagasy government, including representatives from the Ministry of Energy and Mines,  representatives of Projet de Gouvernance des Ressources Minerales (PGRM), mayors from various provinces rich in  gemstones, and advisors to the government, visited Thailand on several occasions in 2004. These groups attended the  Bangkok Gems & Jewelry Fair, met with the Thai Gem & Jewelry Traders Association (TGJTA) Board of Directors and  made numerous trips to Chantabun to observe the gem market there.
 
 
 
 
    
      A delegation from the TGJTA  then 27 to December 4 last year to visit mining areas and participate in discussions and a workshop with the Malagasy  government on improving the export regulations with the aim of providing clear and easy-to-follow procedures for buyers.  One of the top considerations for the Ministry of Energy and Mines, who organized the workshop with PGRM, was to  increase the contribution of the mining sector to the development of Madagascar.

 
 
 
 
 
 
     The resolution from the workshop recommends that the government pass the following measures regarding resident and  non-resident buyers:
     1) the mining royalty of 2% on purchases made by resident buyers with registered Malagasy companies could be paid  as follows, depending the case:
     a.as per the current system, the holder of a mining permit shall keep a register of sales controlled annually by the Service  des Mines and on which he pays the royalty. He issues a laissez-passer model 1 (LP1) to each buyer for each sale,
     b. in the case where the buyer does not receive an LP1, he shall keep a register of his purchases and have it controlled  regularly by the local Service des Mines, pay the royalty to a Treasury office and receive a laissez-passer model 3 (LP3).

 
 
 
 
 
 
 
     2) Non-residents buyers, without registered Malagasy companies, will be authorized to buy and legally export stones on  the condition that they meet the following requirements:
     a. on their arrival in Madagascar, they should register at the airport or in an office of the Service des Mines and get a  temporary buyer's permit which is valid as long as their visa.
     b. they will pay the mining royalty of 2% as in article 1. However, they will pay an additional 'Droit Special sur les  Transactions Minieres' (DSTM) of 2% of the purchase price for rough stones purchases which compensates for the  additional fees paid by the resident companies. They may export their purchases legally after having paid the royalty and  the DSTM to the Treasury. Cut stones purchased and exported by non-resident buyers are not liable to DSTM.

     These measures are slated to be implemented in January 2005 and it is expected that the country will attract an  increasing number of buyers from around the world who will be more confident in doing business in Madagascar.
 *Photos courtesy of Chumphol Pornchindarak and Fidy Andriamisamanana.