Surat Diamond Company plans 10-day ‘holiday’ for 50,000 employees

Kiran Gems, a leading Surat diamond company, has made headlines with its recent decision to grant a 10-day holiday to its 50,000 employees. Scheduled from August 17 to 27, this unprecedented move aims to address the challenges stemming from the declining global demand for polished diamonds. This bold step highlights the company’s strategy to navigate the current rough demand patch and manage its production effectively.

Strategic Production Control by Surat Diamond Company

The diamond industry, particularly in Surat, is experiencing a significant downturn in demand for polished diamonds on the international market. This rough patch has prompted Kiran Gems to take a proactive approach by reducing production. Vallabhbhai Lakhani, the chairman of Kiran Gems, explained, “We have declared a 10-day holiday so that the production of diamonds can be controlled. Such a decision was made for the first time in the Surat diamond company’s history.” This statement underscores the gravity of the situation and the company’s innovative response to the crisis.

While it is customary for diamond factories in Gujarat to close during extended festivals like Diwali, the current holiday period represents a strategic effort to control supply levels rather than a traditional break. By temporarily halting production, Kiran Gems aims to stabilize the market and potentially increase diamond prices. This measure is intended to counterbalance the oversupply and support the overall health of the diamond industry.

Lakhani’s move reflects a broader industry trend where companies are seeking to align production with market demand to avoid the pitfalls of oversupply. The goal is to create a more balanced market environment, which could ultimately benefit the industry as a whole. Lakhani has expressed hope that if other diamond companies follow this lead and implement similar production control measures as his Surat diamond company, the collective effort could help rejuvenate the market.

Kiran Gems and Its Role in the Global Diamond Market

Kiran Gems, recognized as the world’s largest natural diamond manufacturer, is a major player in the global diamond industry. This Surat diamond company is also a significant exporter of polished diamonds, with an impressive annual turnover of ₹17,000 crore. The company’s stature is further bolstered by its authorized buyer status for rough diamonds from De Beers, one of the leading global diamond producers.

Despite its strong market position, Kiran Gems is not immune to the broader challenges facing the diamond industry. De Beers, a key supplier of rough diamonds, reported a 15 percent drop in production during the second quarter of the 2024 financial year. This decline reflects the overall decrease in global demand for diamonds and highlights the need for strategic responses from major players in the industry.

Kiran Gems’ decision to relocate operations from Mumbai to the newly inaugurated Surat Diamond Bourse (SDB) is another testament to its commitment to adapting to market changes. The SDB, which was inaugurated by Prime Minister Narendra Modi in December 2023, represents a significant shift in the diamond trading landscape. By establishing operations at this state-of-the-art facility, Kiran Gems positions itself at the forefront of the industry’s evolution.

Kiran Gems’ decision to implement a 10-day holiday for its employees reflects a strategic response to the current challenges facing the Surat diamond company and the broader diamond industry. By controlling production and managing supply levels, the company aims to stabilize the market and potentially enhance diamond prices. As a leading global player, Kiran Gems‘ actions could set a precedent for other companies in the industry, influencing how they navigate the ongoing fluctuations in demand and supply.

The Surat diamond company’s proactive approach highlights the need for innovative strategies in times of market uncertainty. As the diamond industry continues to face fluctuating demand, Kiran Gems’ efforts may provide valuable insights into managing production and sustaining market stability.

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