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Suashish Diamonds to set up unit in SEEPZ

MUMBAI: Suashish Diamonds is planning to invest around Rs. 150 crore in setting up a new manufacturing facility at Mumbai’s Santacruz Electronic Export Processing Zone (SEEPZ). This investment will be made through its wholly owned subsidiary, Suashish Jewellery Ltd.

An amount of Rs. 82 crore of the total Rs. 150 crore will be invested in the first phase to set up a 16,000 sq. ft. manufacturing facility which will become operational in August. It will add an estimated five lakh jewellery pieces of capacity to Suashish Diamonds’ existing capacity of one million pieces of jewellery.

Ashish Goenka, Managing Director, Suashish Diamonds, expects the first phase to achieve a turnover of Rs. 180 crore in a full year of operation. “We are looking at investing the balance Rs. 68 crore in the second phase in two years. Once both phases become operational, we expect the SEEPZ operation to achieve a turnover of Rs. 400 crore annually.”

The company has a strong balance-sheet with assets of Rs. 1,467 crore and reserves of Rs. 588 crore. Its revenues in 2007-08 were Rs. 1,223 crore and the net profit was Rs. 82 crore. “Given this, we do not see raising resources for the capital investment as a problem,” said Mr. Goenka, adding that the company would look at a mix of internal accruals and equity capital to fund the new investment. The company’s expansion and greenfield project comes at a time when the Indian diamond industry is experiencing a downturn with reduced margins due to factors such as the downturn in U.S. economy, and rising gold prices. However, Suashish has an assured, committed supply of rough diamonds at lower costs due to its sight holder status by the Diamond Trading Corporation (DTC). It has two sights, the second one being for its manufacturing operations in Botswana.

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