The 7th annual Cambodia Gems & Jewelry Fair got underway Thursday on Phnom Penh’s Koh Pich island, but even the glittering spectacle of models flaunting precious stock for government officials and VIPs could not hide the diminished luster of this year’s event.
Organizers of the fair, billed as the country’s most important sourcing platform for the industry, predicted the number of exhibitors and visitors would increase 12 percent on last year.
But despite an extensive promotional campaign, including 1,500 billboards and banners and a proliferation of media spots, the number of exhibitors was down significantly on last year, which many said reflected the state of the industry here.
The opening day ceremony— during which power brokers in business and government made their appearances—proved equally thin on numbers, with the Diamond Island Convention and Exhibition Center left largely empty.
Ouproum Virak, chief of the Commerce Ministry’s exhibition affairs department, said that 54 companies—including gem dealers, jewelers and suppliers of equipment and tools—had signed on for this year’s exhibition, compared to 80 last year.
He explained that the 31 local companies, along with 15 from Hong Kong, five from Thailand and three from Vietnam, were taking part in an event that was for the first time organized by the recently established Cambodia Gems & Jewelry Traders Association.
“I think that the small number is because it is the first time the gems and jewelry fair has been organized by the association, which is newly established and has not had enough time to promote it enough,” he said. “Last year, the event was organized by the ministry, so the figure was much higher.”
Leaning on the glass counter over an array of cut colored stones, Lach Thonhak, general manager of Chhim Lim Hoeun Gems & Jewelry Shop in the capital’s Daun Penh district, said the event reflected an overall downturn in fortunes for the gem and jewelry trade in Cambodia.
“This year is quiet because there are a lot less local and foreign buyers compared to last year, especially Chinese,” the wholesaler said, adding that in 2014, he had two to three local and Chinese buyers per month, compared to one—or sometimes none—this year.
The reason may be a poor global economy, he said, making luxuries more difficult to afford, but the answer could also lie in the local market.
“Products from other countries look more attractive than ours in terms of design and cutting and some of our foreign exhibition peers told us that their products were designed by computers and modern cutting machines,” he said.
In June 2014, Seun Sotha, director of the trade promotion department at the Commerce Ministry, called for jewelers and gem-cutters to adopt new technologies to improve Cambodia’s competitiveness.
Two companies that supply this modern equipment including 3-D printing machines to jewelry businesses attracted more people than most of the bejeweled exhibitors to watch their demonstrations. But despite the curiosity, most local jewelry makers are still using traditional methods.
“3-D printing reduces the time it takes to make molds enormously, while it allows for intricate designs that are too complex to be made by hand and smoother, better quality pieces,” said Kuoch Chen, the 39-year-old director of his family’s jewelry equipment business in Phnom Penh.
But new machines are expensive. Two on display cost $6,000 and $10,000, respectively, too much for the majority of small family-run businesses in Cambodia to afford. Opportunities for young jewelry designers to learn new skills to incorporate emerging technology are also scarce, Mr. Chen said.
“It is improving—last year, there were 20 jewelry designers using this technology; this year it is 50. But they have to leave Cambodia to study it,” he said.
D.C. Technology, a Vietnamese company, also sells new jewelry technologies. Its founder Bui Thi Thuy Nga said the market in Cambodia was so small that it would always be difficult to compete with the huge market in Thailand, where the government offers incentives to businesses like his.
“Doing it the traditional way, it is too difficult to compete. But technology like this is very new,” he said. “It has been only three years since 3-D printing came to Cambodia, but overall I think it can become established. But the government needs to rethink how to foster business relations and help small businesses.” he said.
Cambodia’s gem and jewelry trade stood at $100 million in 2013, Deputy Prime Minister Men Sam An said in a speech at the ceremony, a figure dwarfed by the $23.8 billion recorded by Thailand in the same year, and $11.8 billion in Vietnam.
Cham Prasidh, the minister of industry and handicrafts, said Cambodia’s reputation in the industry was solid and said efforts were being made to improve it.
“In the markets, our jewelry [and stones] are well known…especially in the U.S. because our products can be exported there without charge of tax under GSP [Generalized Scheme of Preference] framework, while the U.S. could withdraw GSP from Thailand,” he said.
The minister said hand-cut stones and handmade jewelry were still more sought after, but conceded that there were benefits to the new way of doing things.
“Manually cut jewelry is more valuable than computer cutting, but [producers] can save more of the diamond or stone because computer designs use the optimal size,” Mr. Prasidh said, adding that the country still had riches to exploit.
“[Our mineral resources] still exist, such as diamond, stone, gold, etc…but we have not cut or explored to have them traded,” he said.
But 27-year-old gem wholesaler Theang, who declined to give his full name, said it was rare to find new precious stones in Cambodia now that once rich mines in Pailin were exhausted.
After this year’s low turnout, he said he was unsure if he would return to the fair next year.
“Let’s see. If they bring many more companies, maybe I will come back, but each year it has become smaller. It began with more than 100 but now there is less than 60.”