Monday, June 30, 2008

Prices Up on Even Cutting Abroad!

Below are sections of emails sent between All That Glitters and an associate in Hong Kong. We have know the owner of this company for about two decades and he is well known in his area for his previous work in this field. His company has even purchased Rough Synthetic Alexandrite from All That Glitters, as our price was better than what he could get over there! In reading articles on line, the owner of All That Glitters had read that the cost of faceting abroad was going up.

All That Glitters typically uses U.S. Cutters to facet their gemstones from the rough they obtain, but jewelry manufactures and tv shopping channels have requests for large quantities of calibrated gemstones - and in order to be very competitive and have large quantities faceted, we must sometimes go abroad.

You will read that there is good news in China because labor laws are changing. This means that the cost of each employee is going up. There are now laws in place that will also benefit the working class. If the cutting charges do not go up around the world, then the increase in the cost of using China as a source for faceting may shift to other countries - and this would decrease revenues taken in, putting a strain on employers in China.

We hope you find the information below of interest.

01/25/08 From All That Glitters to Cutting Facility (China)
Happy New Year...!
I have been meaning to email you. I heard a rumor that the costs of cutting in your area of the world could be increasing because companies now have to have medical insurance for their employees, etc. Is this true?

01/27/08 - Cutting Facility Reply
you are correct, the new labor law in effective the Jan 1 2008 does make the life very hard. You are no longer allowed to lay-off workers in low seasonor run out of business unless you are going to compensate one month's salary for one year service in the company, upto 12 years. After 10 years service <>the worker will become you permanent employees until the date of retirement. Imagine we have 200 workers with average 6 service year and if we wish to close the business, we must pay everybody 6 months salary first -- say each is going to receive $3,000 only, how much cash do we need? If
we have such cash on hand, the business can certainly survive, no need to dismiss.
On top there are the monthly pension, medicial, insurance etc. that must be covered and the imperative increase of minimum pay every 6 months. Last year the increase
was 25%.
So please be prepared to pay new prices for anything from PRC.

01/27/08 - From All That Glitters
What was created to help people (there) might hurt them if companies go elsewhere and don't send work there...So what will be the new prices for cutting?

02/01/08 - Cutting Facility Reply
We have to evaluate the full impact when it is a bit settle down. It will be about 30% up I estimate but will work out a new price list for you asap.

02/17/08 - From All That Glitters
What is the new pricing? Just wantedt to know out of curiousity. Everything is going up in the U.S. as the price of oil increases, and that rises the price of gold. Those visiting this country from abroad will find bargains in everything from clothes, real estate, jewelry/goldgems and much more, if they are converting from say the Euro to the Dollar....

02/23/08 - Cutting Facility Reply
Unfortunately not yet ; the government has just few days ago, announced an increase on basic salary by 13% starting in April. Chinese RMB is expected to appreciate by 12%
against US$ so please wait for a bit more when we can see better the picture to work out the price list.