Thoughts on the Chinese and Japanese Gem Markets
At the Tucson shows, Shahin Aboosalih, director of SR Trading, spoke to us about his path to the gemstone and jewelry industry and his company’s gemstone business in Japan and China.
Shahin, as he prefers to be called, comes from four generations of Sri Lankan gem merchants, but initially he took another career path. He spent seven years in the Sri Lankan banking industry and then decided to go to school in Japan to study the language, with no intention of entering the gem industry. In fact, his father always encouraged him to pursue a career outside the gem business. In 1993, after completing his Japanese language studies and gaining experience in computer graphics, Shahin returned to Sri Lanka and joined Dilmah, a major tea exporting company, as a packaging designer. In 1996, he was offered an opportunity to work in Kofu, Japan, by STS Gems Japan Ltd., an Indian multinational colored gemstone and jewelry company. This was his stepping stone to the world of gems. “At that time, I didn’t know what a tanzanite or sapphire was, even though my family had huge knowledge in corundum from Sri Lanka for several generations,” he explained.
When Shahin started in the industry during the 1990s, Japan’s economy was in recession, yet fine gemstones like Paraíba tourmaline (figure 1) were still in demand. As the recession continued, gemstones that were once rare and more difficult to source—such as fine blue star sapphires, emeralds, and Paraíba tourmaline—kept momentum and held their prices.
Sunil Agrawal, CEO of STS and one of Shahin’s early mentors in Japan, taught him everything “from scratch.” The company sent Shahin to Jaipur, India, for several months to learn colored stone identification. Then he traveled to Brazil, India, South Africa, Thailand, and Sri Lanka to find new material to meet the heavy demand from his Japanese clients for a wide range of stones, including fine corundum, spinel, tourmaline of all kinds, and aquamarine. He also learned finer cutting techniques in Sri Lanka from his father-in-law, Naji Sammoon (founder and chairman of Sapphire Cutters (Pvt) Ltd. in Colombo). He used these skills, along with his computer graphics background, to perfect gem cuts and meet the high standards for faceted stones in the Japanese market. "The trade is looking for nice material, precision, and perfection,” Shahin said.
At the height of the global recession in 2008, Shahin became managing director of SR Trading, his older brother’s company. Japanese clients were looking for unusual and rare material that had become more popular in recent years, including grandidierite and benitoite. In 2012, Shahin transitioned to the Chinese market. His brother Ruzaik Aboosalih runs the business in Japan, specializing in padparadscha sapphire, Paraíba tourmaline, and other rare stones. Shahin sees great opportunity in China and Hong Kong. He has developed a very strong client base along with Cindy Xin Hao, who started out as his Chinese translator and has become a gem expert and managing partner of the Chinese business.
Shahin thinks of China as a “young” market with consumers who are curious to see variety, more so than their traditional Japanese, European, and American counterparts. Here he targets almost every colored gemstone. His Chinese clients look for a wide variety of colored stones: corundum, emerald, and aquamarine and other beryls (see figure 2), as well as precious opal and tourmaline in its many colors. This gives Shahin opportunities to look for more stone varieties every day. Despite this market’s demand for a wide variety of gem material, gemological education is relatively new in China. Therefore, Shahin and Cindy conduct mini-seminars to groups of 10–15 people to teach them about gemology and the supply, demand, and value of colored stones. They also conduct gem mining and leisure tours in Sri Lanka for small groups from China. They educate the tourists about the process, from mining and cutting to the finished product.
Shahin said that historically some of the finest corundum has come from Sri Lanka, but currently most sapphire is sourced from Madagascar. For other colored stones—such as grandidierite (figure 3), spinel, and Paraíba and other tourmalines—the main producers are mainly Brazil, Tanzania, Kenya, Congo, and India. Shahin buys stones from Hong Kong and Bangkok as well; such gems include spinel, rubies, mint-green garnets, and tanzanite (figure 4). Most of the time he buys faceted material, but as a perfectionist, he will recut 90% of his stones in Sri Lanka. He purchases all his stones, and they all undergo his personal inspection and quality control. His passion for his stones is what makes them easy to sell, because they are all very special to him. “I love them all,” he said.
Shahin sees plenty of opportunity for those who can bring value-added merchandise to the market. The global industry is looking for attractive, ethical, value-added gems. While it can be a struggle to find quality material—be it corundum, Paraíba tourmaline, spinel, or any other colored stone—it is worth it to work hard and be patient enough to find the right opportunity and source. Shahin notes, “With the experience and connections and what I’ve learned in the past 20 years, it helps to meet the right people and product to satisfy the demand. This demand will continue, and I see that as an opportunity to make business in the future.”
