In a striking move reflecting the current turmoil in the global diamond industry, Kiran Gems, one of Surat’s largest diamond manufacturers, has announced a 10-day shutdown of its operations. The closure, scheduled from August 17 to August 27, will temporarily affect 50,000 employees, marking a significant decision in the company’s history.
Vallabhbhai Lakhani, chairman of Kiran Gems, cited the ongoing decline in global demand for polished diamonds as the primary reason behind this unprecedented step. “We have declared a 10-day holiday to control the production of diamonds. This is the first time in the company’s history we have taken such a measure,” Lakhani explained to The Indian Express.
The move is designed to stabilize diamond supply and potentially enhance prices in a market currently facing challenges. Unlike the usual industry practice of taking extended breaks during Diwali, this shutdown aims to address the immediate market slump. By temporarily halting production, Kiran Gems hopes to influence the supply chain positively and aid the broader diamond industry.
Kiran Gems, renowned for being the world’s largest natural diamond manufacturer, employs around 50,000 workers, including 40,000 involved in cutting and polishing natural diamonds and 10,000 in the lab-grown diamond sector. The company’s annual turnover of ₹17,000 crore underscores its significant role in the global diamond trade. As a major exporter and an authorized buyer from De Beers, Kiran Gems’ decision reflects broader industry struggles. De Beers reported a 15% decrease in rough diamond production in Q2 2024 compared to the previous quarter, highlighting the sector’s downturn.
Lakhani expressed hope that other diamond companies might adopt similar production control measures, fostering a collective industry response to the current market conditions.
This development follows Kiran Gems’ recent relocation to the Surat Diamond Bourse, a move inaugurated by Prime Minister Narendra Modi in December 2023. The company’s proactive stance in addressing market issues through temporary shutdowns may set a precedent for how the industry navigates future challenges.
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