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Rosy Blue N.V.

Rosy Blue N.V.


Hoveniersstraat 53
Bus 127, 12th Floor
Antwerpen,
Belgium
Telephone: (32 03) 206 16 00
Fax: (32 03) 206 16 01
Web site: http://www.rosyblue.com

Private Company
Incorporated: 1973
Employees: 15,000
Sales: $1.7 billion (2005)
NAIC: 423940 Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers

Rosy Blue N.V. is one of the world's leading diamond companies. Based in Antwerp, Belgium, the company is active in nearly every area of the global diamond industry, from rough-cutting to polishing to import/export and wholesaling. The company is also one of the largest of the DeBeers-DTC sightholders. Into the midfirst decade of the 2000s the company, which traditionally served as an intermediary in the diamond market, has launched its own retail jewelry designs, under its own Rosiblu brand, as well as in a licensing agreement with top bridal fashions designer Vera Wang, and as a partner in the Canadia arctic diamond brand. Rosy Blue also operates its own chain of Orra retail diamond shops in India. In addition to its bases in Belgium and India, Rosy Blue has established an international presence, with operations in all of the major world diamond capitals. As such, the company is present in the United States, Israel, Japan, South Africa, Russia, Switzerland, and Hong Kong, as well as in mainland China, Sri Lanka, Armenia, the United Arab Republic, Luxembourg, and Thailand. Rosy Blue remains a privately held, family-owned company, represented by chairman Dilip Mehta.

MUMBAI DIAMOND WORKSHOP IN 1960

India's position at the center of the international diamond trade reaches back thousands of years. The world's first diamonds were discovered in India, and for much of history the Indian subcontinent remained the world's only source of diamonds. By the late 19th century, however, India's diamond resources had been largely depleted, while the discovery of vast diamond deposits in South Africa shifted the world mining focus there. Later, the cities of Antwerp and New York emerged as the world's major diamond centersreceiving the largest diamonds for cutting and polishing. Nonetheless, India remained a prominent diamond market in its own right, in large part because of its expertise in rough cutting and polishing diamonds. For the most part, the country's diamond industry was centered on the Gujurat region, and was largely controlled by a small network of families.

The Indian diamond market collapsed after the country's independence, however, when the new government banned imports of rough diamonds into the country. The ban was finally lifted in the early 1960s, and it was then the Indian diamond industry hit upon a new means of gaining prominence in the diamond market. The high costs of cutting diamonds in the Westranging up to $50 per caratmeant that smaller diamonds were rarely prepared for the jewelry market, and instead were relegated to the industrial diamond market. This provided the Indian diamond industry, which boasted a huge population of experienced workers, with the opportunity to develop a new market for smaller diamonds. By reducing the cost per carat to just $10, the Indian diamond families were able to create a new market for small-carat, jewelry quality diamonds.

The Mehta family, led by Arunkumar Mehta, became one of the early players in the new small diamond market. In 1960, Mehta set up a workshop in Mumbai, in partnership with brother-in-law Bhanuchandrea Bhansali. The new business was called B. Arunkumar & Co. Just three years later, B. Arunkumar made its first inroads into the international diamond market, launching its first diamond exports that year. Mehta also became associated with the Gembel company, which became the first Indian company to receive DTC sightholder status. Under the sightholder system, De-Beers, through its Diamond Trading Corporation (DTC) subsidiary, established a list of companies to which it agreed to sell the diamonds discovered as part of the DeBeers mining operation. Placement on the list, generally restricted to just 125 companies, became a prerequisite for a company hoping to establish itself as a major player in the global diamond market.

Mehta himself spent a great deal of time in Antwerp over the next several years, working with Gamble to bring back diamonds for cutting and polishing in India. Over the next several years, Mehta's company set up a network of affiliates in order to produce diamonds for specific markets. The Mehta family's own emergence into the global diamond elite was signaled in 1969, when B. Arunkumar became a sightholder for the DeBeers-DTC diamond monopoly.

Arun Mehta's oldest sons joined the family business, which eventually grew to a network of some 7,000 employees. In the early 1970s, however, the family recognized that in order to fulfill its ambition to become a true diamond leader, it needed to establish operations in the world's major diamond centers. The group targeted a presence in Antwerp, which remained the most important of all diamond markets, founding a new company, Rosy Blue N.V. in 1973. Mehta chose youngest son Dilip Mehta to head the new company, which took its name from the rare pinkish-blue diamond.

Rosy Blue initially functioned as B. Arunkumar's procurement office for its rough diamond needs, as well as a distribution facility for transferring polished diamonds to the company's jewelry designer clientele. The company soon became the Mehta's family's vehicle for its further international expansion. By 1974, the company had established offices in New York and Tokyo as well, providing local distribution services to those markets. In 1977, Rosy Blue had established an office in Hong Kong, and, with the opening of a branch in Tel Aviv in 1980, the company had completed its goal of establishing a presence in all of the world's major diamond markets. By then, too, Rosy Blue had begun to take over as the center of the Mehta family's holdings, achieving its own sightholder status in 1975.

ADDING JEWELRY DESIGN IN 1987

Rosy Blue expanded its diamond manufacturing operations again in 1981 when it entered a partnership with Sri Lanka's Blue Diamonds Ltd., founded in 1974, which had pioneered the diamond cutting market in that country and later emerged as a prominent sightholder in its own right.

COMPANY PERSPECTIVES


Rosy Blue is a dynamic family organization built on the values of expertise and integrity. For over 45 years, our skills and reputation have passed from generation to generation, each driven by a passion for the business. For Rosy Blue, product quality, be it in rough, polished or jewelry is paramount, and the essential first step towards our ultimate goals: outstanding service and added value for all our clients. Our dedication to our clients and insight into their needs has made us one of the most respected and trusted players in the industry.

Back in India, B. Arunkumar, which became known as Rosy Blue India, had continued its own strong growth, topping $50 million in exports by 1985. With Rosy Blue taking over the family's international diamond procurement and distribution operations, however, the Indian business increasingly focused on expanding the group's range of operation. In the late 1980s, the company made the leap into jewelry design and distribution, founding a new subsidiary, Inter Gold Gems, in 1987. Originally focused on the midpriced market in Japan, that company went on to become India's leading jewelry exporter, as well as the largest distributor of diamond jewelry in the country. Inter Gold also developed its own retail network, building up a string of sites throughout India.

Rosy Blue meanwhile expanded its own network at the end of the decade, establishing an office and manufacturing plant in Thailand. The following year, the company added a manufacturing facility in Herentals, Belgium, as well. By then, Rosy Blue had placed itself among the leaders in the Antwerp diamond market. The company backed up its rise to leadership in the industry by establishing a new subsidiary in Luxembourg dedicated to developing the company's financial foundationfurther establishing the company as a major partner for the DeBeers-DTC diamond monopoly.

Rosy Blue next continued building up its global manufacturing network. The company turned to Armenia in 1993, establishing a diamond manufacturing business there. The company later added a jewelry workshop in that country as well, and then, in 2001, expanded its Armenian presence with the construction of a new factory with a production capacity of some 25,000 carats per month. In 1997, the company moved into mainland China in order to take advantage of the fast-growing diamond market there, establishing a jewelry factory in Panyu, in Guangdong Province, and a diamond polishing plant in Liyni, to the north. The company next moved into another increasingly important diamond market, the United Arab Republic, establishing a distribution office in Dubai, in 1999. In that year, also, Rosy Blue added jewelry manufacturing in the United States, founding RB Solitaire to produce basic jewelry items for the U.S. market.

BECOMING A NAME BRAND FOR THE NEW CENTURY

Into the early 2000s, Rosy Blue added still more pieces to its global puzzle. The company launched operations in Russia in 2002, as a satellite to its main Antwerp facility in order to serve the growing local market. Also in 2002, the company bought two diamond factories in Talin and Lori, Armenia. Next, Rosy Blue turned to South Africa, where it bought a factory from the Diamond S.A.Monnickendam in 2003. By then, the group had extended its presence in China as well, buying Diamond Cutters N.V. including its Chinese manufacturing operation, in 2001. In 2002, the company opened a distribution office in Shanghai.

Already one of the world's leading diamond companies, with sales topping $1 billion at the start of the decade, Rosy Blue laid plans to move to the next level in the new centurythat of establishing its own jewelry brands. In 2003, the company founded a new subsidiary, Rosy Blue Fine, which launched the Rosiblu brand of luxury high-end jewelry.

The company quickly added to its brand family that same year, signing a licensing agreement with top bridal fashions designer Vera Wang to launch a line of jewelry bearing her name. Next, the company took part in forming a joint venture, Canadia Tristar, to launch a line of "Canadia" branded jewelry featuring arctic-mined diamonds.

KEY DATES


1960:
The B. Arunkumar & Co. is established by Arunkumar Mehta and his brother-in-law.
1969:
B. Arunkumar becomes a DeBeers-DTC sightholder.
1973:
Dilip Mehta establishes Rosy Blue in India as a procurement and distribution affiliate of the company's India operations.
1974:
Rosy Blue adds offices in New York and Tokyo.
1975:
Rosy Blue becomes a DTC sightholder.
1977:
The company opens an office in Hong Kong.
1980:
A Tel Aviv office is opened.
1981:
The company forms a manufacturing partnership with Blue Diamonds in Sri Lanka.
1987:
Rosy Blue India establishes jewelry manufacturing and distribution subsidiary Inter Gold Gems in India.
1989:
Rosy Blue adds manufacturing operations in Thailand.
1993:
The company adds manufacturing operations in Armenia.
1997:
Rosy Blue expands into mainland China with a manufacturing subsidiary in Panyu and a polishing plant in Liyni.
1999:
A distribution office is added in Dubai; RB Solitaire is established in New York to produce jewelry for the U.S. market.
2001:
Diamond Cutters N.V. and its manufacturing plant in China are acquired.
2002:
Rosy Blue expands into Russia with the opening of a satellite office.
2003:
The company launches its high-end Rosiblu brand, signs a licensing agreement with Vera Wang, and forms the Canadia Tristar marketing joint venture.
2006:
Company Chairman Dilip Mehta receives the title of "Baron" from Belgian government.

Rosy Blue also rolled out a new branding format for its India retail operations, converting its Inter Gold stores to the new Orra format. The company also announced plans to expand the 30-store chain to more than 40 stores by mid-decade.

At the same time, the company maintained a finger on the pulse of the international diamond market. When a new diamond bourse (professional association) was established in Dubai, the company recognized the United Arab Republic as a new and important hub in the international diamond market. The company responded by opening a new manufacturing facility in Dubai, placing it closer to the local and regional market. By 2006, the company had also begun to roll out its own branded jewelry for the Dubai market.

With sales of more than $1.4 billion by mid-decade, Rosy Blue had established itself as one of the leading players in the global diamond industry. Dilip Mehta, who had largely been responsible for transforming the company into a diamond powerhouse, was recognized for his achievements in 2006, when the Belgian Ministry of Foreign Affairs conferred on Mehtaa Belgian citizen since 2001the title of "Baron." Rosy Blue looked forward to a new era as both a major diamond manufacturer and leading branded diamond jewelry producer in the new century.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

B. Arunkumar's International (India); Inter Gold Gems Pvt. Ltd (India); Rosy Blue Carat S.A. (Luxembourg); Rosy Blue Fine Inc. (United States); Rosy Blue International S.A. (Luxembourg); Rosy Blue Inc. (United States); Rosy Blue Jewelry Inc. (United States); RB Solitaires Inc. (United States).

PRINCIPAL COMPETITORS

Loews Corporation; DeBeers Consolidated Mines Ltd.; Minmetals Development Company Ltd.; Diethelm Keller Holding Ltd.; The Zubair Corporation L.L.C.; Mitsui and Company Inc.; ALROSA Ltd.; AngloGold Ashanti Ltd.

FURTHER READING

Ditcham, Robert, "Rosy Blue to Test Branded Jewellery Concept in UAE," Gulf News, June 23, 2006.

"European Diamond Retailer Orra to Open 20 Stores in India," AsiaPulse News, May 22, 2006.

Gomelsky, Victoria, "Mehta: Amid Shortages of Rough, Prices Keep Rising," National Jeweler, May 1, 2005, p. 1.

"Rosy Blue Announces New South African Initiatives," National Jeweler, August 16, 2005, p. 20.

"Rosy Blue Baron," National Jeweler, September 16, 2006, p. 8.

"Rosy Blue Expands Diamond Cutting Operations in South Africa," Diamond Intelligence Briefs, July 20, 2005.

"Rosy Blue Goes Big with Branding," National Jeweler, June 1, 2003, p. 38.

"Rosy Blue: More than Diamonds," Couture International Jeweler, January 2004, p. 104.

"Rough Times Ahead: Rosy Blue's Dilip Mehta on the State of the Diamond Business," Couture International Jeweler, JuneJuly 2005, p. 144.

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