Shrenuj & Company Ltd, the diamond and jewellery manufacturer, plans to invest Rs 200 crore in capital expenditure plans over three years until 2014-15, a top official of the company said.

“We plan to invest Rs 125 crore in retail and Rs 75 crore in manufacturing units,” said Vishal Doshi, Group Executive Director.

The company is focusing on backend operations as well as retail.

“Diamonds are finite. So our capex will be used for diamond manufacturing facilities,” he said.

The company has set up manufacturing units in Botswana and South Africa. Alongside the retail segment is also another growth story for the company. “The retail story is a 25-30 year story,” he said.

The company has a retail presence in India and China through its two chains – Joliesse in Hong Kong and Diti in India.

The company saw a mute first quarter mainly because consumption was weak in India and China.

“The US more than made up the decline in these two places but we had a flat turnover in rupee terms,” Doshi said on the sidelines of a diamond conference organised by Rapaport.

The company had projected a 25 per cent growth in sales at the start of the financial year but has now revised it down to 15 per cent mainly because of sluggish growth in the first few months of the year.

The company’s standalone net sales during the June quarter this year stood at Rs 472.4 crore compared with Rs 486.8 crore in the year-ago period.

Broad demand scenario

According to Doshi, demand is likely to pick up at the wholesale level as the retail pipeline is empty. Shrenuj is one of the major wholesalers in diamonds.

“The retail pipeline is empty. That’s what we found out during the IIJS (India International Jewellery Show) exhibition. B2B business should look good during the second half. B2C business may still be slow,” he said.

Some of the key challenges facing the industry and the company are high prices of rough diamonds and currency fluctuations.

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