Cost of Faceting Gemstones Abroad Increases Across the Board!
As we mentioned in the past, everything is going up in price. Our gemstones currently remain at prices somewhere in between wholesale and retail, though with prices climbing so readily and some gemstones being difficult to price due to rarity and our lack of knowledge of the retail market, many are below wholesale. Previous Gem News has indicated how fast rough and faceted gemstones are increasing, the lower dollar, higher prices of oil, gold, etc. We have received a number of emails about cutting charges abroad. These emails were sent to us only because we are on their mailing list and these are associates in other countries. We have been faceting most of your gemstones in the U.S. when we can obtain the rough and also, re-faceted many. (In the case of the Mozambique Tourmaline, we might loose thousands of dollars to re-facet an already faceted gemstone, but when one sees the result, it is understandable and others in this country would not do this and they therefore wouldn't have gemstones that look like ours! Below you will find two snipets of emails from Hong Kong and Sri Lanka, indicating that the price to facet gemstones has or will be increased, and coming to a retail store near you!
Sri Lanka - We would like to inform you that our cutting cost has gone up in price due to the price increase of the cutting equipments in the market and the other things (Electricity, Water, Telephone, Wages, Etc.) This is a common thing happening every year, but we did not increase our cutting rates for the past 5 years. Now it has come to a considerable amount, which has affected to our cutting cost very high. Therefore we have decided to revise our cutting charges by 10% with affect from the 1st May 2008.
Hong Kong - 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 season or 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 $3,000 only, how much cash do we need? If we have such cash on hand, the business can certainly survive, no need to dismiss. On top there are the monthly pension, medicial, insurance etc. that must be covered and the imperative increase of minimum pay every 6 months. Last year the increase was 25%. So please be prepared to pay new prices for anything from PRC...The government has just few days ago, announced an increase on basic salary by l3% starting in April. Chinese RMB is expected to appreciate by l2% against US$.