A global slowdown in diamond demand has forced Kiran Gems, a renowned diamond manufacturer in Surat, India, to take the unprecedented step of suspending operations for 10 days, with 50,000 employees taking a holiday.
This is the first time the company, which calls itself the "world's largest natural diamond manufacturer," has announced such a shutdown since its inception in 1985.
"We have announced a 10-day holiday for our 50,000 employees," Kiran Gems Chairman Vallabhbhai Lakhani told Indian news agency PTI. "We are forced to do this because of the recession." Of the 50,000 employees, 40,000 are involved in cutting and polishing natural stones, while another 10,000 work in the lab-grown diamond unit.
The move is aimed at controlling diamond manufacturing, he said. India’s polished exports were falling every month this year and finally witnessed one of their biggest drops in June, down 26% year-on-year to $1.02 billion.
Kiran’s staff will be paid reduced salaries between August 17 and 27. The company, which has an annual turnover of over $2 billion, is also one of the largest polished diamond exporters and an authorized buyer (sightholder) of De Beers, the world’s leading diamond company. De Beers has reported a 15% decline in rough diamond production in the second quarter of fiscal 2024 compared to the first quarter.
Lakhani said he hopes rivals in India will follow suit in response to current market conditions. The company hopes the production cuts can help stabilize supply and potentially boost prices, benefiting the entire industry. Indian manufacturers sharply cut rough diamond imports last October in a move coordinated by the Gem & Jewellery Export Promotion Council (GJEPC) aimed at stabilising prices after 18 months of decline.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
