New emerald marketing strategy yields results


On August 8, 2012, this column featured an entrepreneur who runs a small factory which processes gemstones such as emeralds into various products.
Mr Howard Chitalu, who runs a small firm called Kapumo Enterprise in Ndola on the Copperbelt, is an experienced gemstone processor who obtained the know-how while working for Zambia Emerald Industries(ZEIL) before Government embarked on the privitisation programme which fazed out most of the parastatal industries.
ZEIL was a Government-owned industry at the time which was involved in the processing of the emeralds being mined by Kamakanga Gemstones Mines popularly known as KAGEM. It was evident at that time that the Government owned more shares in KAGEM.
Reserved Minerals Corporation (RMC) was in charge of supervising both companies, ZEIL and KAGEM, respectively. It could be observed that the first republic under Kenneth Kaunda had put in place a proper mechanism of developing the industry. However, the only problem that can be traced to this arrangement was the cost associated to production and administration.
The entrepreneur, who now engages in the processing of raw gemstones into finished products of not only emeralds, but also tourmalines, garnets, aquamarine, amethyst, citrine among others, described the procedures of processing the gemstones as sawing, pre-forming,doping, cutting and polishing. He also mentioned that each procedure of processing requires a machine.
The entrepreneur, who only manages two machines, cited this as the main challenge which the business faces among others.
He also mentioned that the acquiring of raw materials such as emeralds as another challenge which his business faces. He told this columnist that his business was capable of employing more youths in the business as currently is the case. At the moment, he has only employed two workers.
The other challenge he cited at that time was the setting of the emerald’s market outside the country.
“How possible is it that you produce the product and you set its market outside the country”, he had lamented at that time.
He had told this columnist that, if the country was to improve its economy and generate employment in the country, it should first look at some of these wrong economic policies introduced by the previous government.
Today, this column wants to commend the Government for its swift intervention in the marketing strategy of the emeralds in the country.
As you must be aware by now, at the insistence of the Government through the Ministry of Mines, Energy and Water Development, the Kagem Mines Plc held a low-grade rough emeralds auction from April 15 to 19, 2013 and from July 15 to 19 of another auction of high grade emeralds which were held locally for the first time. The two auctions attracted international buyers who came from outside the country.
It is important to mention here that the low-grade rough emerald auction which was in April, this year realised US $15.2 million which was the highest value ever realised and the high-grade emerald auction which was held in July last month, yielded $31.5 million the second highest auction revenue achieved and the best in terms of value per carat sold to date so far.
President Michael Sata in my view, who gave the best economic analysis overview over his intervention of giving instructions to the ministry to shift the auction of the emeralds to local market must be commended.
At least 583,448 (high -grade) carats which fetched the average per carat price of $54 placed on offer which secured the second highest auction revenue achieved, were all sold, setting a new record.
The President alluded to the fact that auctioning of emeralds locally, was poised to create employment and would enhance value addition through cutting, polishing and develop the jewelry industry locally.
The President affirmed his Government’s commitment in diversifying the economy away from copper dependence through promotion of value addition in the gemstone industry.
It is important also to understand that the entrepreneur’s vision of localising the marketing of emeralds has been fulfilled through the intervention of the government.
However, when I recently contacted the entrepreneur to collect his views on the recent turn of events, he expressed the delight but was quick to suggest the following that:
1) Kagem should also be organising local auctions for local small industries involved in the processing of emeralds.
2) Kagem should be auctioning small parcels at same price per gramme.
3) Kagem being a major player can also take advantage and invite other miners of other gemstones like tourmalines, amethyst among others to auction along the sidelines.
The precious gemstone industry can grow and contribute massively to the economic development of this country, but the players in this industry must embrace ideas coming from all stakeholders and move away from selfish ambitious motives which were created by the previous government which made some selfish individuals to get rich.
The privatisation programme, although well intended created some policies which need to be reversed in order to propel the economy to greater heights.
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