and mismanagement. ales of pearls and pearl hand, freshwater pearl companies

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1 January / February / March 2006 Volume 15, Number 1 Contents: Risen from the ashes: the International Pearl Organization's attempts to resuscitate the IPA and WPO of yore Cultured pearl overviews: Golay, JNA Sales and events at the HK Show A new look for Assael International Atlas Pacific Ltd's Indonesian success -B =Di, PEARL WORLD The Internatioiial Pearling Joitrital RISEN FROM THE ASHES A new pearl group attempt: by the Japanese, and ultimately lack of cooperation between most But will it succeed? fell apart due to internal bickering producing regions and among and mismanagement. the major personalities in the A new umbrella association Sometime later, Mr. Tasaki producer ranks (who would have l_1 for the global pearl started up a similar group to be tapped for their financial. Elindustry, the International called the WPO (World Pearl resources in order to support Pearl Organization (IPO), held its Organization), but this, too, coordinated activities). inaugural meeting in September withered and died on the vine. It is hoped that Mn Coeroli in Hong Kong to call for Skeptics were born after both can overcome these historic genuine, wholehearted support ofthese failures, saying that there shortcomings, quite especially from the worldwide culturedpearl never could be a successful pearl as he is in a perceived neutral trade for its establishment. cartel due to conflicting egos and "IPO" to page 3 About twenty representatives from fourteen pearl producing and consuming countries and regions attended this first convocation. Participants in general supported the formation of the Jewelry at the Hong Kong IPO, but were concerned about funding and support from major pearl producers... in particular PEARL SALES UP AT HK SHOW ales of pearls and pearl hand, freshwater pearl companies in mainland China and Hong Jewellery&Watch Fairheld Kong showcased multi-colored last September were satisfactory strands and received enthusiastic and showed improvement responses from visiting buyers. Paspaley Pearling Co Pty Ltd compared with last year's, said The importance of buyers from Southeast Asia has been on in Australia, which had no many exhibitors. representative at the meeting. This year there was renewed the rise. South Sea pearl suppliers Initiated by the President interest among buyers in said although there were fewer of the CIBJO and also General medium-to-higher-priced pearls, buyers from South Korea, there Manager of GIE Perles de particularly Chinese freshwater was significant increase in the Tahiti, Martin Coeroli, the IPO pearls, reversing a trend over the turnout of Taiwanese buyers was seen as a revival of the past several years that demand who purchased fine-quality large International Pearl Association had been concentrated on medium pearls in a range similar to that which was formed in 1994 with and lower-end categories. demanded by South Korean a view to addressing various Multi-colored pearl strands buyers. topics regarding the pearl sector, were prevalent also: many South Sales to customers from from production to trading, Sea pearl suppliers displayed mainland China rennained promotion and a code of ethics. strands mixing Chinese significant though they bought in People may remember that freshwater pearls, particularly lower quantities compared with the IPA, which started up with pink ones, with South Sea as well the June show. Attendance by such enthusiasm, was boycotted as Tahitian pearls. On the other "HK Show" to page 5

2 90% 4,46 11%MA.4 trrta**4 &34*#Imwa 7te 0 *eat from the officers and staff of Pearl World :31:4. K. Obuchi President ay 2006 be PEARL WORLD Ifir in#rr udi 1 i'curli g J,irit f R. Torrey Editor R Grclla Production Supervisor R Brutcher Production Manager PEARL WORLD is publish,91 quarterly by linggi. House. Inc. Omee: 5,501 North Seventh Avenue/ PMB 331/ Phoenix. Arizona / USA. Telephone. XXX4602) Facnimilr: XXX. ( E-mai! Iddres*: td10]0431:est.net PEARL WORIS LLC. All rights reerved. Any reproduction or use, in whole or pitrl,of ditodnt Ir graphic contrnt in any manner is prohibiwd without written t,crmission. One ye.r subsciption: USS, 10 for North Amoricm, USS]30 (ds,!whern For comments or olinions. please wrim call or fax PEARL WORLD, Attention Editon A:irl World. The International Pearting,lournal- is registpred in the US. Pakint nad Tr:idemork Oflic,). an even better year for all who toil in the pearl vineyards.

3 /<3//.mil "IPO" from page 1 were the only major producers Jewelry Show in March, attending the meeting, held He added that he had no leadership position within the alongside the September Hong intention of being a member of' industry as a CIBJO executive.. Kong Jewelry & Watch Fain IPO's board of directors, but was and who has achieved quite some There were no representa- interested in working on the acclaim as an international pearl tives from Paspaley Pearling marketing side of the body. marketing expert. Co Pty Ltd, the largest pearl Countries and their repre- Mn Coeroli said that- given producer in Australia, nor from sentatives who attended IPO's Hong Kong's status as the trading Indonesia or China, important inaugural meeting were as center for all pearl categories- he producers of South Sea pearls and follows: expected the IPO to be based in freshwater pearls respectively. Hong Kong, and that it would be Mr. Coeroli said he would Australia formed by September maintain efforts in communicat- He explained at the ing with the Indonesian Pearl David Norman President of meeting why establishing this Culture Association, or ASBUMI, Aquarian Pearls Pty Ltd, Sydorganization was essential: "The and with Robert Sukendy, the ney. strong internal and external largest SSP producer in Indocompetition that our pearl sector nesia. He said he would also Britain is facing, on both production and contact the Hong Kong Pearl sales and distribution levels, and Association and the Professional Martina Cawley, Buying Directhe fragmentation of our industry Association of Pearls, Zhejiang, to tor of Isle of Wight Pearl, Isle of' require more than ever a global gain support for the organization Wight. body to defend and promote its from the Chinese freshwater interests on a worldwide level. pearl sector. Canada "IPO is the authoritative body "I am very satisfied with that regroups the main actors the attendance and responses of Papken Akkelian, Vice President of Canadian Gems, Quebec. and organizations of the pearl pearlers at the meeting. It is very industry and that defends and clear that everybody at the promotes their interests at an meeting supports the formation French Polynesia international level. As a modern, of IPO and agrees that such an customer-focused organization, organization is needed. Their Robert Wan, Chairman of Tahiti it also provides key services and major concerns are how the Perles, Tahiti. support to all of its members organizationwillbemonitoredand and stakeholders." how it will be structured." Martin Coeroli, General Manager He stated that IPO's mission At the meeting, a steering of GIE Peries de Tahiti, Tahiti. was to: create a unique platform committee with representatives for the pearl industry; raise from different countries was Hong Kong awareness of the power of the formed to work out the structure unique beauty and natural and funding of IPO. The members Hanspeter Pieth, Managing Dicharacteristics of pearls; develop of this committee are as follows: rector of Golay Hong Kong. the knowledge of and create Andy Muller of Autore Japan maximum excitement about KK; Vidhan Chaudhari of Orient Japan pearls among consumers world- Pearl Co. Ltd.; Yoshihiro Shimizu wide; and, ultimately, contribute of Hosei Co. Ltd.; Sonny Sethi of Andy Muller, Managing Director significantly to the growth of Tara & Sons Inc.; David Norman of the Pearl Division of Autore the entire pearl industry and its of Aquarian Pearls Pty. Ltd.; and Japan KK, Kobe. members. Till Schoeffel of Shoeffel GmbH. A tentative budget for the Mr. Coeroli said that although Yoshihiro Shimizu, Chairman of first year of operation amounting he was not a member of the Japan Pearl Exporters Associato US$2.55 million, was also committee, he would work out tion and of Hosei Co. Ltd., Kobe, proposed at the meeting. with the members the agenda for Tahiti Perles in French Poly- their first meeting, which it was Vidhan Chaudhari, President of nesia and Jewelmer International expected would be held during Corporation in the Philippines the Hong Kong International "IPO" to page 4

4 4ll "IPO" from page 3 Joseph Padulo, President of and then work out specific goals Padulo Co Ltd, New York. and events that are implemented Orient Pearl Co Ltd, Kobe. throughout the trade. The Gennany INDUSTRY COMMENTS Philippine pearl farmers are open to such cooperation and will fully support this international Till Schoeffel, Managing Partner Robert Wan, Chairman organization for the common of Schoeffel GmbH, Stuttgart. of Tahiti Perles in French goal of growing the market for Polynesia, was among the few pearls." Kingdom of Bahrain pearl producers that attended Andy Maller Managing the meeting. Director of the Pearl Division Mohammed Al-Mannai, Mannai "Shunsaku Tasaki of Kobe- of Autore Japan KK in Kobe, Group, Manama. based Tasaki Shinju Co Ltd set is a member of IPO's steering up a global pearl organization committee. He called for tolerance Lebanon in 1994 but it turned out that at the meeting: not much was done. I agree that "IPO is a great idea, but it Claude Mazioum, Ambassador key players in the pearl industry involves so many people with for Middle East, North Africa, should contribute to the IPO. I different interests, and how to Turkey and Iran, CIBJO. will do my part," Mr. Wan said. include them in one organization Jacques Branellec, President is an obstacle we have to face. Philippines of the Philippine Association of Great tolerance is needed, and Pearl Producers and Exporters before anything can be done we Pierre Fallourd, Assistant Man- and Managing Director of need practically unconditional aging Director of Jewelmer In- Jewelmer International Corpor- support from the industry's key ternational Corporation, Makati ation in the Philippines, sent players, such as Mr. Paspaley and City. representatives to the meeting. Mn Robert Wan." He commented after the Another steering committee Angela Poblador, Marketing Man- meeting: "The role of an member, Till Schoeffel, Managing ager of Jewelmer International international organization is Partner of Schoeffel GmbH in Corporation, Makati City. essential in strengthening Germany, said: cooperation among producers "My feeling is that it is better Singapore in the pearl industry for longto do some joint promotions even term collaborative activities. if it is small, rather than doing Bruce Barnes, Director of Golay I feel it is important to have a nothing and I think the timing is Pte Ltd. body that meets regularly to right for such a joint effort. share scientific knowledge and 'Ten years ago it wasn't South Korea other information about pearls; possible because most pearl to discuss clean and responsible varieties and pearl companies Gregory Park, President of Pearl- farming techniques that will weredoing well. Butnow that the man Gempearls Co Ltd, Seoul. ensure the survival of the pearl pearl business has been through farming industry; to exchange a very difficult time, and I believe Spain ideas about latest market and there is a greater understanding production development; to create in the industry for the need for Antonio Aria of Aria SA, Barce- events to increase the interest such an organization. The testing lona. and awareness of pearls; to point would be when people have strengthen consumer confidence to pay for promotions." United States in buying pearls more than any Francis Mastoloni of Frank other gem category; and to have Mastoloni & Sons Inc in New Sonny Sethi, Managing Director a common approach to pearl York commented: of Tara & Sons Inc, New York. quality standards. "It is a monumental chal- "The body should be lenge, but I am optimistic that Francis Mastoloni, Frank Masto- established as an association of loni & Sons Inc, New York. producers. It is important that all producerscometogetherasateam "IPO" to page 5

5 r\. "IPO" 1>om page 5 "In addition, there has to be a body that enforces disclosure: if we can form an international there are pearls that are artificially of ours, among the major players organization that can help in the overseas markets, for his resolve the issues in the industry. disclosed to the end consumer and comments, and they echo ours: There have been substantial people know what they buy. In "As for the IPO, we must all changes in the market in the past this context a world organization decade that more distributors is particularly relevant for the unless key producers all agree... are handling all types of pearls, industry in Asia, which is not as so it is time to come together and happen! As for me, I don't need promote all types of pearls with United States." > to be involved at all, but I give my a view to enlarging the overall fullest possible support to this market for pearls." Source: Jewellery News Asia, overseas cause; it must happen, for various Rene Hodel,wholeft Schoeffel correspondents good reasons. So I stand back and and took over the existing pray it materializes!" Schoeffel Asia operation - now This is exactly the point: OUR VIEW called Hodel (Hong Kong) Ltd- evervone must get on the said:«a world body must be well- bandwagon. There can be no represented by key players and uite obviously, we are fully holdouts or mugwumps (folks who there must be general agreement behind this start-up venture sit on the fence, with their mug on on a work plan; otherwise we will begun by an old friend, one side and their wump on the not support it. Martin Coeroli. other) as in the past. "What must be understood is We (as previously noted) have And there cannot be continual that there is space in the market been present at the two earlier monumental clashes of ego to expand sale of all varieties of reincarnations of this long-held pearls. If the industry worldwide dream: to create a debeers-type happenstance between major (and chips in a little bit we can really cartel forthe cultured pearl industry even some minor) producers. make a difference by promoting so that all segments of it can be Is it just possible that this pearls and educating the on the same page, to minimize venture might succeed? consumer on the value aspects any bickering or problems, and to of pearls. maximize the efficiency of supply Time will tell. colored then they should be well organized as in Europe or the in regards to demand. We turned to a dear friend be positive and it will not happen as without them, it will never which, alas, is all too common a "HK Show" from page 1 Asia, according to Vice-Chairman, Pierre Fallourd. Cheng Tai Po. visitors from the United States The prevailing trend is exposure, and broader range continued to be limited while that many companies do not of jewelry designs and styles, purchase in large quantities to those from European markets more clients made concrete grew slightly, according to pearl avoid stocking due to the current commitments. Actually, rnore exhibitors. economic conditions. retailers expressed their interest White South Sea pearls were SOUTH SEA PEARLS the best-selling category and branded collections. there was strong demand for -I'he buyersfromthe US. have Leading pearl supplier Man pearls above 14mm, wholesaling remained active, so have those Sang Jewellery Co Ltd in Hong from US$400 to US$600 a piece." Kong saw growth in the turnout Sales at Jewelmer Interof customers at the recent fain national Corporation were These included companies from better compared with previous expressed interest in jewelry mainland China, particularly collections. Beijing and Shanghai, and continuous promotion efforts Buyers from the US. and companies in the US. and that put Philippines on the pearl Europe looked for fresh designs of Europe. However, there were map, according to the company's high quality finish. With French fewer customers from Southeast Assistant Managing Director, "HK Show" to page 8 year, thanks to its long-term "As a result of increasing in franchising of Jewelmer's from Europe. We noticed Indian, Taiwanese and Korean customers made consistent purchases and

6 GOLAY'S GLOBAL VIEW G olay has a long history in The significant growth pearl iewelrv market share pearls. Founded by Louis of pearl jewelry demand natural pearls and components attributed to four major Country Share for the watch industry, Golay USS factors: Golay in 1887 to supply from 1995 to 2005 can be was among the first to introduce cultured pearls from Japan to the Full-fledged pearl farming industries in differwas the first European company ent Pacific regions benefited from' accumulated European market in the 1920s. It to open a buying office in pearl bv countrv in 2004 USA 30% 1.5 billion Japan 24% 1.2 billion Europe 18% 900 million China 12% 600 million Southeast center Kobe, Japan, in experience and techno- Asia 10% 500 million Today, the group is recognized logical breakthroughs for its expertise in the domain of and bring out pearl cultured pearls. harvests of improved Other countries 6% 300 million Overthe years, Golay has built quality and quantity. TOTAL $ 5.0 billion close contacts with pearl producers in French Polynesia, Australia, A profusion of creative are with pearls as the principal Indonesia, the Philippines, Myan- pearl jewelry designs in an gems. Pearls have become the mar, Japan and China, and extensive price range fulfil third major jewelry category has developed an international the demand for haut joaillerie, after diamond jewelry and plain distribution network of select retail medium to high-end fine gold jewelry. partners. Golay pearl offices, with jewelry, and affordable fashion In mature markets where - the 18th opened in Shanghai in accessories; and target all consumers possess a good 2002, stretch over 13 countries. market segments including knowledge and awareness of The following is their most fine jewelry for mature women, pearls, such as Japan where recent global pearl overview. fashion accessories for fashion- the technique of pearl culture conscious clientele, and the originated 100 years ago, the THE 21ST CENTURY niche of men accessory. pearl jewelry segment takes up PEARL RENAISSANCE to 17 percent of the total jewelry sales. It is estimated that about retail network comprises US$1,200 million is spent on earls have registered a independent jewellers, chain pearl jewelry in Japan per year. A fast-growing pearl jewelry Psignificant revival in recent stores, department stores, cat- Since 1999, the United States years. Consumers today arc alogue houses, fashion bouti- has taken over Japan to become rediscovering the contemporary ques and internet companies. the largest pearl jewelry market, charm of this aquatic gem. Perceived with an estimated sales of for generations as the classic elegance High-profile promotions and US$1,500 million of pearl jewelry around the neck of ladies of good communication on pearls con- per year. families. pearls have taken on a very ducted by pearl organizations In fast growing economies in different allure in the 21 century. and companies on a local, Southeast Asia, China, Russia, Wehave always known pearls national and international and the Middle East, the yearto be white, round and discreet, scale to reposition pearls as a on-year growth rate for pearl but nowadays pearls can be contemporary chic. jewelry outperforms the rate in ostentatiouslybig, inarichpalette the established markets ofjapan of intriguing nuances, taking the The acquisition rate of and Europe. form of various fanciful, organic pearl jewelry has subsequently Globally, the pearl jewelry shapes. Celebrities and models on increased from the standard 2 to market is estimated at US$5,000 catwalks are lavishly draped with 5 percent in the past to about 10 million, about 10 percent of the stacks of long sautoirs, heralding percent, i.e. for every 100 pieces world's total jewelry market. a new era of pearl renaissance. of jewelry sold, about 10 items "Golay" to page 7

7 r. "Golay" from page 6 Estimated value of pearl production 2004 Market share Production in value value 2004 White South Sea cultured pearls (Australia, Indonesia, the Philippines, Myanmar) 35 percent US$220 million Freshwater cultured pearls (China) 24 percent US$150 million Akoya cultured pearls (Japan, China) 22 percent US$135 million Tahitian cultured pearls (French Polynesia) 19 percent US$120 million Total US$625 million The value is calculated at pearl farm level, before all processes of value addition (sorting, stringing, setting into jewelry, wholesale and retail services) jewelry. South Sea pearl jewels. Those THE EVOLUTION OF THE Thirty years afterwards, with classic taste would prefer PEARL JEWELRY MARKET the matured South Sea pearl an elegant akoya pearl necklace industry brings out big-size of discrete beauty The more The jewelry consumption South Sea pearls (mostly 9mm audacious and less conventional pattern has shifted in recent to 15mm), spurring the demand jewelry lovers would desire the years with the changing lifestyles of the top-end prestige clientele exotic Tahitian pearls. For those and consumer purchasing modes. for exclusive necklaces beyond who want fashionable accessories Self purchases by women, and US$10,000. Tahitian pearls of to match their seasonal chic, the rising need for jewelry that large sizes (8mm to 14mm) and freshwater jewels are the ideal can be worn in the day to match exquisite dark colors also create purchase. outfits and moods, have reshaped the demand for flamboyant, non- We -- in the 21st century -- the jewelry landscape. In a wide conformist pearl jewelry. live in the age when the largest spectrum of versatile designs and On the other hand, a and most beautiful pearls are ahighlyelasticpricerange,pearls significant quantity of nice- ever produced anytime in history, fit well into the new aspirations quality freshwater pearls from and enjoy the widest choice of of modern consumers. China at affordable prices render Cultured pearls ever offered. > Between 1920s and 1970s, pearls accessible to the mass most cultured pearls found on market in both developed and the market were Japanese akoya developing countries. Designers We thank Golay (and, pearls (white, round, majority readily explore these affordable especially, Brigitte Sheung) for 4mm to 8mm in diameter). Most gems and create fanciful their help in preparing these were sold as classic necklaces accessories, extending the appeal regular industry overviews. And from US$1,000 to US$10,000 per of pearls to the fashion world. we appreciate the straightforward. strand, targeting the medium Most consumers looking for neutral reportage of these global to high-end jewelry market prestige and status would go overviews from a major player in segments for a clientele for classic for large-size and higher-valued the cultured pearl market.

8 "HK Show" from page 5 similar to last year's. Director of AKOYA PEARLS the company, Raj Shah, believed manufacturing expertise at that the fair had become more reasonable cost, Jewelmer can regional, as attendance by buyers Nobuo Hanai of Isowa Pearl cater to this demand. The most from Asia increased while that East Co Ltd was satisfied with mother-of-pearl collection of seemed down. He pointed pur- saleable pieces at the fair include of US. and European buyers sales at this fair and noted the strong attendance by buyers floral designs featuring a mix chasing power among buyers from Taiwan who bought strands of different materials, such as from mainland China grew of 6mm and 7mm pearls of keshi pearls and diamonds, and but demand from South Korea, commercial quality, wholesaling ring and earrings sets that would Thailand and the Philippines from 20,000 to 30,000, or retail at US$2,000 apiece," Mr. declined. «The best selling are between US$180 to US$270. The Fallourd said. pearls from 1 1 to 16mm,nomatter company's headquarters is in Specializing in top-end whether they are in white, black Japan but has an office in Hong pearls, French-based Alain Boite or dyed golden. Wholesale price Kong. SA continued to exhibit at the of white pearls is US$130 apiece, At tmakei Pearl Co Ltd in Fine Design Pavilion. US$60 for black pearls; and Kobe, sales were similar to last The company displayed more US$75 for dyed golden ones." year's. According to Takayoshi top-grade large pink Chinese Four Indonesian-based pearl Fujimoto in the company's Sales Department, there were more finely matched pairs ofsouth Sea exhibited in the Indonesia customers from the US. and pearls in white and golden color Pavilion, among them was European markets, but fewer as well as Tahitian pearls. Sumber Mutiura. Its Director, A from the Asian region. freshwater pearls in addition to and pearl jewelry suppliers President Alain Boite attri- Kengrry Retanubun, remarked Akoya pearl strands enjoyed buted sales growth to increased on the increased nurnber of strong demand. The pearls were buyer turnout, especially those customers, most were from the between 6.5 and 9mm, and the from Taiwan. However, there U.S. and Australia, and some majority of them were of 7mm. were from China. "We have seen strong market Korea. The most popular items demand for strands of 7mm "The Taiwanese buyers included pearls in champagne pearls wholesaling from US$300 bought golden South Sea and white colors. «We sold these to US$400 each." pearls primarily while those categories in lots, at wholesale Specializingin Chinese akoya were fewer buyers from South from mainland China mostly price of around US$90 a mom me," offine quality, Yue San Jewellery he said. Co Ltd in Hong Kong also said We also supplied large quantities General Manager of Wong's sales had improved. There were purchased multi-colored strands. of freshwater pearls to jewelry Diamond & Pearl Co Ltd in Hong more customers from Europe manufacturers in Hong Kong." Kong, Tony Chan, attributed and some new ones from South Although sales to customers slower sales at the fair, compared Korea, General Manager, Cissy from South Korea and European with June 2005 and September Wong, said. markets were limited, Tokyo- 2004, to a decreased buyer «The demand was for based Tokyo Pearl Co Ltd in attendance, particularly those top quality. Customers from Japan was able to sell to some from mainland China. European markets wanted goods US. companies exhibited at the "Buyers from China made fain purchases in large quantities at Sales were of South Sea the June fair and may have yet to from 5.5 to 6mm, from US$60 to US$70 a strand at wholesale, while buyers from South Korea white and golden pearls, Tahitian clear their stock." purchased strands ofpearls from pearls and akoya pearls. Manager He said buyers from Taiwan 7.5 to 8mm, from US$250 to of Overseas Sales, Ken Maemura, were very keen on top-grade US$300 each at wholesale." said there was strong demand white round South Sea pearls for strands of Tahitian pearls in of 18 and 19mm, wholesaling at FRESHWATER PEARLS pistachio color, wholesaling at US$3,500 apiece. There was also 200,000, or US$1,785 each. strong demand for golden pearls Demand has been steadily At Kobe-based Pearls Inter- of 10 and 11mm, at US$300 recoveringfor Chinesefreshwater national Co Ltd, sales were apiece at wholesale. "HK Show" to page 9

9 A./il "HK Show" from page 8 strands of pearls above 10mm of buyer and a Hong Kong buyer US$100 at wholesale, according respectively. pearls and shifting to higher-end to Peony Chow of the company. With fresh merchandise from products from medium-to-lower- "We mainly supply white pearls, harvests in Australia in August priced categories. Most popular and there are some natural and a higher attendance by items were pearls in white, pink colors and a small quantity in buyers, the September auction and multicolored strands. dyed colors. We capitalize on the usually ofters better-quality Manager of Evergreen fashion for multi-colored strands goods. Co in Hong Kong, Francis by mixing natural colors with Buyers speculated that the Yip, attributed the company's white ones. Market response has auction organizer, Paspaley improved sales to the fact that been enthusiastic." more visitors from Europe and the US. made purchases. harvests for private sale, so the Better-grade items, such as THE PASPALEY AUCTION pearls on offer at the auction were strands of white round pearls not as good as before. wholesaling from US$150 to outh Sea pearl prices Sizes were bigger though. US$300 each, sold briskly continue to rise. The pearls on offer averaged 0.80 Pearls of unique shapes were At the 29th Paspaley momme apiece compared with also in demand. «We sold many Pearl Auction held this past 0.76 momme in March and 0.78 strands mixing pink, lavender September in Hong Kong, buyers momme in June. and peach in irregular shapes noted that the average selling Indonesian and Philippine from 9 to 10mm, wholesaling at price was 20% higher than at the goods excluded, the average size US$50 each." June show, and that the price of reached 0.90 momme this time. Master Glory Investment commercial goods had increased Ltd in Hong Kong fared well, by as much as 40%. Commercial goods' too. Although the number of The recent auction sold prices rocket buyers was fewer compared with 133,542 pearls weighing almost last year's, each spent rnore. 106 kan, bringing in a total of Many buyers said that the Therefore the company was able 1, million, or US$11.49 prices of commercial goods had to maintain sales at a similar million. About 83% of the pearls increased significantly, some by level. on offer were sold. The average up to 40% Director Iwen Lam noted that price per pearl was 9,640.17, or Commenting on the situation, demand for medium-to-higher- US$86.07, and the average price Yoshihiro Shimizu, Chairman end freshwater pearls began to per momme was 12,154.99, or of Hosei Co Ltd in Kobe, the top show signs of improvement in US$ both figures being buyer at the auction, said that March as part of a market cycle. the highest so far this year. expecting strong demand for "The market has had difficulty in This was despite the fact that commercial goods, many buyers absorbing the immense supply of the overall quality of the pearls bid high in order to win. lower-priced goods." on offer was reportedly lower "However, the market price Buyers were keen on pearls than at the last two auctions. of commercial goods is much in white or other natural colors, "There were fewer high lower than the selling price at as well as multi-colored strands, quality round pearls suitable the auction. To me, the price of she said. for necklaces than at previous some commercial goods at the «The price range of white September auctions," Manager of auction was unrealistically high. pearls is broad. Best-selling Po Kwong Jewellery Ltd in Hong The market is going less for categories of pearls in natural Kong, Lauren Lei, ventured. spotted goods, especially in the colors included lower-end strands Examples of such goods US., where a lot of spotted goods ofpearls of 6 to 7mm wholesaling was lot 319, which consisted of are kept unsold and stuck in the at US$30 to higher-end pearls 92 pieces of 9mm to 15mm, AA pipeline." of 8 and 9mm from US$160 to quality round white pearls, and Similar to the June auction, US$170, and pearls from 9 to lot 328, which also comprised many smaller lots, consisting 10mm at US$200 each." 92 AA quality rounds but from of Australian rounds with drill Most saleable at Eastern 9mm to 14mm in silver colon The Pearl Co Ltd in Hong Kong were two lots were sold to a Japanese "HKShow"topage 12 Pearling Co Pty Ltd in Darwin, had kept some of its better

10 . The International Pearlinil Journal JEWELMER'S ULTIMATE ORIENT % -7 1, 4 6,1. :.f, 1 9, ID- --:f, i.'5 j 1, : 1-, rk ' ' U 1 16 W Gykf 't, ]f-*ul'(54=13%-, f-f{f *-*js->,>flftfan>j :, = 97 19»,9*' i. 0kiA ' ri-.'' A. 111{.f. ' 21. C i '#/3 J -- - z. ---p- -.'- Models in fine South Sea pearl jewelry made a grand entrance for the HK show. The Ultimate Orient 2005, pearls; earth provides shelter Philippine South Sea and stability to the people in the Pearls Show delivered pearl farms; fire ignites the zeal, an unforgettable performance passion and dedication ofthe men last September 24th at the and women behind the success of Grand Foyer of the Hong Kong Jewelmer." Convention & Exhibition Centre. The lifestyle philosophy, The show was a celebration vision and message of the show of the beauty and majesty of was loud and clear: the beauty the Philippine South Sea pearl and quality of the pearl is reliant <5& 1 7 on the abundant and verdant the pearl farmer to its life and marine life that is anchored on and the passionate dedication of cultivation. protection and conservation of \IT. It was inspired by the four the four elements of nature. basic elements of Earth, Water, Mn Jacques Branellec, Wind and Fire - the delicate and Managing Director said, "The complex combination of forces significance of the event was that is a South Sea pearl. that it was an appropriate venue Mr. Manuel Cojuangco, to highlight the importance President of Jewelmer shared, of nature and how marine «The harmony brought by the conservation must be taken interaction ofthese four elements seriously to continue producing symbolizes the various processes these gems. of growth and transformation "A tectonic shift in how we -44 experienced in the creation of viewandusethesenon-renewable.,: h....1-,\%.'*2, Philippine South Sea pearls resources must be put into place /1: -I air creates the energy that to help protect the future of ' 23*. ': *<Ab,J' 1.*., helps circulate the nutrients our troubled ocean ecosystems. : --*123k ] _. 1-5 which gives sustenance to the Ultimately, the pearl farmers' Model wears a SSP jewelry set oysters; water acts as the home of the oysters that nurture the "Ultimate Orient" to page 11 of the health of the ocean. inspired by coral growth, a symbol

11 The International Pearting Journal.mil "Ultimate Orient" from page 10 only organic gem.' ', UNFIIIIII- i He added: «With worsening 1 Vwl.../3, global warming and climate mission is to protect the health change, humans and vitality of coasts and seas, their share in protecting must our do i..'-l. $-&... I./.9, I /t. natural resources as we owe it if we still want to enjoy wearing pearls. to our children and the future "Because a polluted sea generations theirrightto fresh air cannot by any means be home and clean water and abundance to the highly sensitive Pinctada in food supply,. maxima oysters, the bivalves "Pearl farmers are doing their / responsible forproducingnature's share as pearl farms are marine 1.r /#... ""tri, i, S.@12. r '%- U). '4* C. 4 4 I.. r. 2.i. 1* 41,, 4,1/ -:3...,) i j 1 =K.-53' 0-.Trk ' ' \ ' / f. 1 I ' 4 :.. U 12 =f 1, 2 14 *r 19 -.r,., A long rope of warm colored SSPs served as the perfect accessory to this off-shoulder dress. protected areas where marine 2 f life -especially edible fishes- are '6141 ' %2.-» f : free to procreate and revive the area into its former glory. "Environmental projects are L I t>' 9.v.-- - 'A -, ic continually being implemented 1 1 \ 61 1 in partnership witij local communities such as seaweed 1\ A i farming, Giant dams culture t«5 (locally known as Taclobo) and f : i 1 4.2, i sea cucumber farming among others. Environmental talks and r - -f- 1\5 -- / g., If -4 : campaigns are being carried out to educate and involve those -i ; who are directly in contact with *t:.jlthe sea to ensure that they will also treat the sea as a precious -9 : :f A fascinating performance by top Philippine dance group, Doug/as Nierras Powerdance, provided memorable intermissions during the show. "Ultimate Orient" to page 12

12 "Ultimate Orient" from page 11 resource: 4.L,- 1 -, --*..5 The meaning of these yearly i /93 * 25. '11 5 Ji shows is to pay tribute to nature andher gifttohumans: South Sea, pearls. It is also one way to touch i...4. and rekindle that spirit of awe and wonder at how an iridescent pearl can only emerge when nature is at its most pure state. f The warm character of the pearls glowed all night. Their allure is impossible to define, impossible to resist. Their natural radiance shone through. The dance, the gowns, and the pearls were carefully integrated into the show. Earth, Water, Wind and Fire came alive with the ff Angela Poblador, Marketing Manager of Jewelmer with Manuel Cojuangco (left), President, and Jacques Branellec, Managing Director, after the show. energetic dance rendered by the wind, and as the finale, bright culture is alive and is capable award-winning Douglas Nierras pink and orange with bursts of of producing world-class, high Powerdance. gold beading represented fire. quality shows to the delight of Feminine and sexy wear was Jewelmer has been actively guests and trade visitors of the created by hip designer, Rhett promoting the warm, natural five-day September Hong Kong Eala, one of Manila's best and colors ofquality Philippine South Jewelry and Watch Fair. These brightest. His own interpretation Sea pearls and their strong are also venues to recognize ofthe four elements were evident Filipino national identity. Jewelmer's efforts in putting the in his use of color and form According to Mr. Jacques Philippines on the world map as - beige and earth tones mixed Branellec, Managing Director of the best source of rare natural with layering represented earth, Jewelmer and President of the golden South Sea pearls." 4 shades of blue in cascades of soft Philippine Association of Pearl All photos by Anton Feliciano, Jr. fabric for water, white, airychiffon Producers & Exporters: "These Source: Jewelmer International Inc. fabric was used in representing annual shows prove that Filipino -4/ '-HK Show" from page 9 15mm, with a reserve price of 7 attended the auction, and 87 were million, or US$62,500, was sold successful in obtaining lots. clean faces (grades 1-2), were to a buyer in Hong Kong after the Five out of the top six buyers withdrawn. auction. were from Japan: Hosei Co Ltd, To maintain price stability, Despite the slower sales Hamaco Pearl Co Ltd, Sekai the organizers put disclosed of higher-end pearls, some lots Shinju Co Ltd, Enterprise Pearl reserve prices on higher-quality managed to obtain over 100,000, Co Lid and Pearl International goods, which many buyers found orus$892,permomme.examples Co Ltd. Bacori Sri in Italy was the too expensive and which thus were lot 2, which had six pieces fifth biggest buyen received no bid. of 15mm, AA quality round white The 30th Paspaley Pearl Some lots that had been pearls, and lot 320, with 43 Auction will be held from March 4 withdrawn were sold after the AA quality golden rounds from to 6,2006. Prior to that, Paspaley auction though, after price 12mm to 15mm. will organize the 38th Shima negotiations between buyers Shokai auction in Mie Prefecture, and the organizers. For instance, TOP BUYERS Japan, from November 14 to 16. lot 170, a strand with 33 AAA quality golden rounds, 12mm to A total of 113 companies "HK Show" to page 14

13 ./. ASIA'S BIGGEST INTERNATIONAL JEWELLERY FAIR --- HONG KONG JEWELLERY & WATCH FAIR,,,../I" September 2006 AsiaWorld-Expo Hong Kong September 2006 Hona Kona Convention & Exhibition Centre One Fair Two Venues One Great City over 2,300 exhibitors from 47 countries and regions 40,000 visitors from 139 countries and regions :L.P CMP Over 70,000 square metres of exhibition space Organtsei: 1».-/=r&.*M Please send me information on: grv/2006-pw-us Name Exhibiting Il Visiting 0 Advertising in Fair Directory Company Country Tel Title Address State Fax Product Line/Nature of Business Postal Code Why Wait7 Complete the coupon and CMP Asia Ltd CMP Asia Ltd - US Contact faidmail to us immediately for more details 17/F. China Rmources Building 600 Community Drive, Manhasset or register directly at 26 Harbour Road, Wanchai, Hong Kong NY USA Tel : Fax : Tel : salesjwf@cmpasia.com Fax :

14 r. The International Pearlina Journal "HK Show" from page 12 However, sorne buyers large, nice pearl necklaces and considered the price increases peacock pearls in the office and THE WAN AUCTION far more noteworthy. Manager of withdrawn lower-bid lots in order Po Kwong Jewellery Ltd in Hong to maintain price stability. ffering a greater number of Kong, Lauren Lei, said: "Prices pearls, the 25th Robert Wan for some better-quality goods Circle pearls improve Tahiti Perles Auction sold doubled. A case in point was lot about 77 percent of the Tahitian 195, which contained mm Given new demand for pearls on offer for a total of to 14mm, AAA quality, peacock- Tahitian ropes with circles, 6.15 million euros (or US$7.45 colored pearls in semi-round and bidding for circled pearl strands million), the highest selling value button shapes, with ITS reserve at the auction was stronger in price undisclosed. Among the than before, particularly among The two-day auction, held best qualities at the auction, European buyers such as last September in Hong Kong, this lot fetched 35,769 euros, or Schoeffel GmbH in Germany. offered 302,584 pearls with a US$43,280. The selling price - Forty-three out of the 50 total weight of more than euros, or US$141, per pearl circled pearl necklace lots were kilograms. - was double that for pearls ofthe sold, fetching a total of 243,577 The number represented a same kind last year." euros, or US$294,728. significant increase compared Some buyers held the Mr. Wan said he was happy with the offers of 204,940 pearls opposite view, believing prices to see improved sales of circled in March and 163,597 pearls in were in general similar to those pearl strands, which in turn June. of the previous auction. President resultted in an increase in price to More pearls brought more of New York-based ProVockative 10 euros, or US$12.1, per circled revenue, with the total sale value Gems, Alex Vock, said: «I think pearl. exceeding 6 million euros for the prices were similar to last time, He believes that there is a first time in 2005, the previous after their sharp increase in good market for circled pearl two Hong Kong auctions fetching 2004." necklaces and plans to include only about 5.6 million euros. more in future auctions. However, Robert Wan, Chairman of Fewer nice goods some buyers are worried that Tahiti Perles, organizer of the the increased supply of circled auction, said he was very pleased The September auction offers materials may dampen Tahitian with the auction results despite a July harvests, which usually have pearl prices, and are calling for lower percentage of pearls being better coating because of the better control of the supply of sold. lower temperatures in Tahiti. circled pearls on the market. "We have seen strengthening However, buyers noted that The 26th Robert Wan auction confidence among the trade in there were many fewer nice goods is scheduled for November 9 and Tahitian pearls. This can be at the auction this September, in 10 at Kitano Club Sola in Kobe, inferredfromthehighattendance particular peacock-colored pearls Japan. of buyers: out of the 160 invited, between 12mm and 14mm. 120 buyers showed up and 96 The best-quality peacock HODEL (HK) LTD made purchases. Japan was pearls were lot 195, mentioned strongest, followed by Hong above, and lot 3, which consisted peaking of the Hong Kong Kong. of 244 AAA quality rounds from Show, one of our very "Buyers bid actively The lot 12mm to 14mm, buyers said. favorite memories is that of most strongly bid for was sold at Lot 3 sold for 65,000 euros, one in which we met up with Rene 207.7% above its floor price." or US$78,650, 33% above the and Linda Hodel who were gracious reserve price. enough to invite us to their home Pricing variables Mr. Wan conceded that the and meet their two young sons. Mr. Wan said the average overall quality of the pearls offered was lower than at the So this editor was pleased pink to read this article in the November sellingprice was about 10 percent June auction, which had resulted Jewe//ery News Asia about the higher than at the June auction in lower average prices per Hodels and the new look of their when comparing goods of the pearl and per momme. He said same quality and same size. he had kept back some of his "HK Show" to page 15

15 C- --. =1,1'/// The Hodel brand a name is not branding. Today in the pearl business it is important to add value to pearls. business. collection of pearl jewelry under Branding requires the right concept, the right sort of jewelry "HK Show" from page 14 old and well-established pearl Hodel Hong Kong launched a A new pearl company, Hodel the Hodel label with a distinct Asian flavon L.1 (Hong Kong) Ltd, and the All designs and selection of and a supporting structure of marketing, cooperative 1-lbeginnings of a new pearl pearls are overlooked by a team advertising and education. brand, Hodel, were launched in of designers headed by Rene "One of the most important Hong Kong in September 2005 Hodel's wife, Linda, who is a aspects is to teach retailers how following Schoeffel's sale of its director of Hodel HK. to sell pearls. I am working on 50% stake in its Asian venture to "We always were and are a program to impart product its business partner of 20 years, producing our own line ofjewelry knowledge to sales staff of our Rene Hodel. catering more to the Asian taste, retail customers as well as a The Schoeffel office in which is different from tastes visual merchandising program in Europe and all the jewelry is where we teach our customers how to display pearls in their Singapore was renamed "Maruta PteLtd"andapartnershipbetween made in Asia," Mr. Hodel said. Mr. Hodel and his longtime friend He said the company has a windows. and associate, Hirotaka Maruta, two-pronged strategy: to work "We find this is a crucial was formed. with retailers to develop and aspect here in Asia because Maruta Pte Ltd will serve as establish the Hodel brand; fine jewelry display is still the exclusive agent for the Hodel and to continue to develop a label in Singapore, Indonesia, wholesale business that supplies manufacturers in Asia. India and the whole Middle East. lagging behind compared to developments in Europe." The company has retained Managing Director of Hodel "We expect to sell about 30% a public relations company in (Hong Kong), Rene Hodel, said of our pearls under the Hodel Hong Kong and has launched the decision to set up his own name while 70% will be our an advertising campaign with wholesale business." the slogan "Pearl Sensation" in five countries: Hong Kong, school in Switzerland. varieties of pearls, and designs Taiwan, Malaysia, Singapore include combinations oftahitian, and Indonesia. company was prompted by his two young sons, attending boarding The company sells all «As they want to continue to live and work in Hong Kong or South Sea and freshwater pearls. Among publications selected Shanghai, we decided that we Most designs in white South Sea for advertising are Ming Pao should set up our own company pearls have a Tahitian pearl Weekly and Hong Kong Tatler and we are very fortunate that version, and the company is also in Hong Kong; Vogue and Elle Hans Schoeffel agreed to our using unusual baroques and in Taiwan; MaZaysian Tatler, proposal." keshi pearls in its designs. Harper's Bazaar and Le Prestige In a letter to business friends, Pearl jewelry under the in Malaysia; Prestige Magazine, Mr. Schoeffel said he respects Hodel label is being sold in Singapore Tatler and Harper's the Hodels' wish to become fully several high-end jewelry stores Bazaar in Singapore and Deui independent and to establish in Hong Kong, Indonesia, Magazine, Prestige and Bali and a business foundation for their Malaysia, SingaporeandTaiwan. Beyond in Indonesia. sons. The plan is to expand sales to 1 respect that wish and other markets in Asia as well as In addition the company has created other useful agreed that Rene takes over our to take the brand to markets in brand support materials for shares in the company which Europe and the United States, retailers. "We also hold shows for consumers together with will continue operations from Mr. Hodel said. September 1, 2005, under the «We have launched the our customers. We help with name Hodel (Hong Kong) Ltd company as a family business promotional activity on pearls carrying the brand Hodel." and we aim to build a pearl and in some instances we help to He then added that branded brand. conclude a sale to a consumer.' Schoeffel products would be «To have a future in the pearl distributed solely by Schoeffel business, branding is essential; GmbH, Germany but just calling something by "HKShow"topage 16

16 16/ "HK Show" from page 15 continue to be sold in Asia guides Jewelmer's creation of through its high-end retail Philippine South Sea pearls. partners, and Schoeffel will PresidentofJewelmer,Manuel Bright pearl future continue its advertising cam- Cojuangco, said the harmony paign in the main markets in brought by the interaction of these Mr. Hodel said he is very Asia, Managing Partner of the four elements symbolizes the optimistic about the future of company, Till Schoeffel, said. various processes of growth and the pearl business as demand,we had a very nice transformation experienced in continues to be strong. Prices of partnership with Rene Hodel for the creation of Philippine South Tahitian pearls have stabilized nearly 20 years and we now need Sea Pearls. and there is strong demand for to build a new organization for Jewelmer shared its lifethis fantastic product that is very Schoeffel in Asia. We consider it style philosophy and its vision affordable. a pleasant challenge to be able to of an abundant and verdant The quality of white South manage the brand ourselves, and marine life that is anchored on Sea pearls is generally very nice we have got very positive feedback protection and conservation of this year but only few big pearls from all our customers who want the four elements of nature. are available. Prices are stable to continue to carry the Schoeffel Managing Director, Jacques or have increased slightly and brand. Branellec, said: «The significance demand continues strong, he "Schoeffel will not do any of the event was that it was an said. wholesale business in Asia but appropriate venue to highlight Mr. Hodel said akoya is a will concentrate on building its the irnportance of nature and nice niche business and beautiful brand." how marine conservation must be akoya pearls are available at He said overall the company taken seriously to continue very good prices. Demand is good is pleased with its results for 2005 producing these gems. because many consumers still and expects to end the year with «A tectonic shift in how want akoya pearls. 10% growth compared to we view and use these non- He said the full potential of «This we feel is a very good result renewable resources must be freshwater pearls has not been considering the difficult market put into place to help protect realized and the company is situation in Europe." the future of our troubled ocean working at adding value to this The company opened an office ecosystems. beautiful product. in Miami earlier this year to give «Ultimately, the pearl farmer's *+We are using only top quality its customers in America a better mission is to protect the health and are adding value by making support. Sales in America as well and vitality of coasts and seas... special creations, particularly as in Eastern Europe are growing, if we still want to enjoy wearing multicolored necklaces with he said. larger pearls interspersed with The latest Jewelmer jewelry the smaller freshwater goods, we are making THE JEWELMER GALA by Rhett Eala, one of Manila's top diamonds. With multiple rows interlinked with pearls. " designs were shown with dresses fashion designers. colored stones. A magnificent gala night- A personal favorite was the Freshwater pearls deserve The Ultimate Orient 2005, water segment where dresses much more credit than they get. Philippine South Sea Pearlf' were the color of the ocean: light The pearls themselves are very Show- capped the September and airy, calm to the eyes. - beautiful but the problem is that Hong Kong Jewellery and And in contrast was fire: they are sold too cheap and as a Watch Fair. This annual event mysterious, provocative and senresult are not really appreciated. was created and performed, as suous. Pink and orange dresses «There is far too much usual, by Jewelmer International were for the finale, with the fire production and a lot of the pearls Corporation, Manila. element blazing with passion, are not desirable. Poor quality The unifying theme for this more powerful when worn with and low prices have affected the year's show was centered on UThe the inner glow of Jewelmer's overall image of the freshwater Four Elements: Earth, Water, golden pearls. * pearl," said Mn Hodel Wind & Fire" which are nature's Pearl jewelry under the four basic energies. A deep SchoefTel brand name Will respect for these four elements Source: Jewellery News Asia

17 ..11 WHAT'S AHEAD FOR FWPS? Many in the cultured pearl crops rather thale--ads, given example of other pearl producing industry have expressed -Fising rice prices and low profit countries, including Australia ongoing concerns about the margins of pearl cultivation. With and French Polynesia, by issuing onslaught of Chinese freshwater China's booming economy, there licences to a limited number of pearls, and are worried about can be little doubt that fewer and pearl producers and restricting what ramifications this abundance fewer areas will be ave[iaole for the export of low-quality pearls of goods is going to have on their 6 Kwater pearl farming. However, after repeated businesses... whether or not they - 1ranwhile, rapid, mush- discussions, it has been found that handle CFWPs or not. An article rooming economic development these controls are not feasible in in the September Jewe//ery News has created numerous employment China. China is a vast country with Asia seemed to answer some Of opportunities. Many workers that a large population, thousands of the questions, which we herewith used to do pearl nucleus insertions whom rely on the freshwater pearl are thankful to republish. have shifted to other industries to industry for their livelihoods. If seek a higher income, resulting licenses are issued only to certain hinese freshwater pearl in a slump of nearly 50% in the established pearl producers (and production will begin to number of skilled workers for exclude the smaller farms) a lot of fall in The extent of pearl operations compared with people may lose their jobs. the decline is hard to predict, but three to four years ago. Nor is it easy to set a nationannual production is expected The Chinese freshwater pearl wide recognized quality standard to move down from the current industry has been going through and control the export of low estimated 1,500 tons to between a difficult time for the past three quality pearls in this big country 1,000 and 1,200 tons in 2006 and to to four years. Prices keep falling. with numerous customs offices. below the 1,000-ton mark in Profit margins of pearl producers Hence, more effort must be Production in 2004 and are squeezed to a very low level, put into promotion in order to 2005 was higher than usual and those that are unable to boost consumer confidence. It owing to mass nucleation during increase their yield of quality will be better if freshwater pearl the peak selling year of pearls will be sure to suffer losses. companies in both mainland Despite the higher production This explains why 70 to 80% of the China and Hong Kong can the overall production value of pearl producers who were in the have Inore opportunities to Chinese freshwater pearls did not industry three or four years ago communicate with consumers increase... remaining at around have left directly so as to know more about US$150 million as prices had On the processing side, the consumers' needs and to increase plummeted. wages of workers for pearl sorting consumers' understanding of Chinese freshwater pearl and matching have jumped 30 to Chinese freshwater pearls. production is more likely set 40% compared with last year to The FWP industry must also to fall than to ris,«. A reduction reach an average of RMB 1,200, or strive for a larger share of China's in available areas for pearl US$147, a month. jewelry market. Additionally, it is cultivation and lower availability The increased processing very likely that bead-nucleated ofskilled labor for pearl operations costs will not have a great impact Chinese freshwater pearls will be are two major reasons. on the industry overall, given in commercial production in three Freshwater pe rl farms are that production costs, including to five years, or at the latest seven concentrated in Zhejiang, Hunan oyster prices and wages of nucleus to eight years. -/ and Jiangxi provinces. However, insertion workers, are very low. Cultivation is at the trial stage / in rafitif developing coastal The most difficult time for the at many farms which report, in areas, such as those in Zhejiang Chinese freshwater pearl industry general, a higher oyster mortality Province, many freshwater lakes should have passed. It is expected rate and a high proportion of and ponds used for pearl farming, that with a decline in production, pearls with "tails." even those in remote locations, inventories in the pipeline will be These problems will undoubt- _p have had to be returned to the consumed and prices will be back ably be eventually solved, and the Wvernment for other types of on track. successful cultivation of beaddevelopment. There have been discussions nucleated Chinese freshwater As for inland _X! ter areas. with other industry players as pearls will bring about a new in Hunan and Jiangxi, farmers well as the Chinese government scenario in the pearl world. > tend to use-them-to-grow-_rigs on the possibility of following the Source: Jewellery New Asia

18 ATLAS-PACIFIC HAS RECORDYEAR by C. Richard Fassler Initially, all activity took pearl producing oysters. The farm place at Waigeo, but the cost of is the home for initial grow-out These days, it's all "Cheers!" producing quality pearls and the of the hatchery-reared offspring, for Australia's Atlas-Pacific, increasingly competitive pearl and results from the past three Limited. market forced Taylor to re-think seasons have been the best in the After a disappointing 2004, the structure and nature of its company's twelve-year history. smiles have returned to the faces pearling operations in Indonesia. After the young oysters reach ofdirectors, staffand shareholders, What was needed was a at least a year of age, they are as one of the world's few transferred to Waigeo publicly-traded pearling which concentrates solely companies set a new. on pearl production. record in harvest volume,...4 The company has two with improvements in :. re-designed Indonesian pearl quality and the *:. A /' ':.. -f ships that can transport development ofnew farm., v ' Ce, -5:.4 large numbers of pearl and hatchery sites. 4 4) - '* oysters safely on their In fact, Perth-based Atlas exceeded its target 4% f* : 19. nc i.jpoe ng : through the of seeding 300,000 pearl 2134*.* This has led to major *rs3 0 =sc *&47,9. ERIFELK. PATL j &0KYif *Uzte n e j have been seeded at staff' looking after many the company's Indonesian sites new location that could deliver more pearl oysters. The site was in Papua (Irian Jaya) and Bali- a high quality work force, great originally established in 1997 to sites that are roughly 1,500 miles water for the production of pearl seed an annual target of 150,000 apart. And the firm is taking off oysters with enough access to first operation oysters. Now that in a new direction: tourism. raw materials, transport and the farm takes delivery ofmature communications to dramatically oysters from Bali, the area Two sites are better than one reduce production costs: next has doubled that nurnber. All stop Bali. activities at the site are geared Atlas' oysters are hatched and toward best practice seeding grown for a year in Bali before Bali, isle of pearts being shipped to remote Alyui "Atlas" to page 19 Bay on Waigeo Island, 50 miles off Bali- a world-famous tourthe northern coast of the Doberai ism destination- has been (, Peninsula, for seeding, grow-out overlooked by serious growers - and harvest. of South Sea pearls. This has all fi Joseph Taylor is Managing changed since Atlas set up shop Director for both Atlas and In 2002, the company located a 40=2 -.1 its Indonesian subsidiary, PT site on the north coast of Bali for its breeding program. "Bali proved to be a surpris- ingly good place to produce high quality juvenile pearl oysters," said Taylor. "The move resulted Cendana Indopearls. He believes that the two locations are essential to the company's success. "We have specific activities at these two sites," said Taylor. «This has enabled us to increase our in some major benefits for Atlas, production efficiency and lower not least of which has been a our costs. And we're getting great dramatic reduction in production prices. I know of only one company costs.'.25 in Australia that is achieving All efforts are focused on. higher prices." breeding the very best quality 4

19 The International Pearting Journal.01/. "Atlas" from page 18 you'll produce a muchlargerquantity or grafting and post-operation of low-value yellow E; idia- _ husbandry by-product. gated a major selective breeding Golds are fan- _...,31 1-i tastic, but the 309- i E---.-z,;<;- Importantly, Atlas has insti- and genetic research program premium on gold f at its Bali farm in collabora- doesn't compensate =- f» < tion with the premier Jarnes for the 70% loss on «Cook University in Townsville, yellow when either Australia. color is compared to -*514 This program complements equivalent quality Atlas' existing breeding program silver/white pearls. Managing Director, Joseph Taylor, harvesting which has seen the company's «To be truly some of Atlas' excellent South Sea pearls. harvests expand from producing competitive with less than 60% white pearls in the white production, As of June 31, 2005, Atlas 1990's to over 99% white pearls I believe one would need to be had recorded a profit of $664,199 over the last year or so. able to produce at least 70% gold and Taylor is confident that this Infact, Atlasisnowproducing reliably. will top $1.5 million for the entire pearls that are selling for prices "Compare this to the fact that year. He attributes this success to previously reserved for only the we're able to repeatedly produce the re-structuring. best of the Australian production 99% silver/white. The best I've Indeed, because of the ofwhite South Sea pearls. seen for golds on a commercial success of its operations in Bali, scale is around 20-25%, with the Atlas has recently secured two What about gold pearls? remainder being mostly yellow or other pearling leases on the cream. island. These new sites will be Taylor doesn't see golds «This is why we've focused dedicated to low cost, high quality playing a major role in Atlas' our efforts on whites where we production utilizing the current immediate future. have a proven ability to produce oyster surplus that has resulted 'Gold pearls are valuable--no a high percentage and thereby from a very successful breeding argument there. We produced maximize the value of the entire season. excellent golds from 1999 to crop. But we're continuing to But the problem is this: for every work on the possibility ofbreeding Taking advantage of tourism beautiful gold pearl you produce, a gold strain." Pearl experts may find Bali A record year looming an unusual location for major farmingoperations. Afterall,most 2004 harvests didn't meet farms are situated in the world's -*- expectations, but Taylor is quick most inaccessible locations-not to point out that these results in densely populated areas, with followed a downturn in hatchery millions ofannual visitors. Taylor production due to the El Nifio laughs when he hears this. events oflate 2001/2002. "Yes, tourism and pearling 1 J4/44&1 The upshot was a significant may make strange bed fellows,. I financial loss for 2004, but 2005 but Bali enables us to take has seen the company bounce advantage of a major educational back and Atlas is expecting its and marketing opportunity" highest ever revenue during In July, the North Bali facility opened to the public as "North From January through Bali Pearls." Since then, the farm November, 2005, Atlas sold has welcomed, entertained and roughly US$6 million in loose pearls. In 2006, this is expected informed hundreds of tourists to increase by 30-40%. "Atlas"to page 20

20 [*1 "Atlas" from page 19 pearling venture to the public. to visitors has attracted other 'OurfarmathlusaLernbongan tourist ventures to the area with -/ Island on the South Coast where a new diving center soon to open most tourists stay will be open next doon in February, We'11 have an Moreover, Atlas has become interactive tour program that will actively involved in a range showcase the beauty of pearls and 130*..1 PR i of community-based activities pearl jewelry." including the training of local WA I {,li Although tourism is expected artisans in mother-of-pearl carv- [ to boost the company's sales, ing, the establishment of scholar-...1, /5, wholesale distribution will ships for underprivileged childremain the cornerstone of Atlas's ren, and environmental programs, Atlas is quite unique in allowing marketing efforts. such as coral reef restoration and tourists to enter their hatchery. «It:'s important to look at the the planting of mangroves to scale of a pearl farm operation assist in shore erosion. from around the world about and its relationship pearl farming. Visitors have the unique small or family-based >4'fl *a, 4 to tourism. For a ' o,r--*1",10,-*:( Z- 1 opportunity to see a real, fully operation, dired; /Afmpcommercial pearl farm without farm-gate sales 2,44:*A:/lfany of the less scrupulous makes perfect sense. I' f<$ i E- *114 gimmicksthatareoftenassociated But at the scale our : 2 j.rftt impossible. We can t r.pr r,-, >1*...4 with pearl tourism («Pick an farm operates, this is 1, 1 -, oyster from the bucket, everyone's, Fy<:c, 2 a winner!"). depend on farm sales,, '3 4'' Atlas allows people to witness, and, besides, we're -11 <film or photograph the seeding extremely happy *9 F, 4. and harvesting procedures, as with our relationship **, 21_17,f. 0...eky 10 well as visit the hatchery-strictly with pearl marketer forbidden at most of the world's Pearlautore Inter- farms. national," Taylor said. Atlas pearls: sorted, packaged and ready for delivery to Pearlautore in Australia. Staff provides a complete "So far this year," explanationofthepearlingprocess, Taylor went on to say, "We've sold Looking ahead along with a few gems of history around $300,000 of by-productsand "hands on" experience. jewelry, homewares and seafood. Taylor is highly optimistic "We hope to become an Farm sales of pearls are relatively about the new directions his importantnorthcoastattraction," small at this stage, but it's a company has taken. said Taylor. "In fact, the response profitable business in its own '+We've experienced the from our visitors has been so great right and the sales are certainly challenges of pearl farming. It's that we're teaming up with Bali sufficient to defray some of our not an easy business, but we're Hai Cruises to open up our latest operational costs. entering an exciting new phase «By the end of 2006, we'll and we expect bigger and better Th*Tek P-) i <c.4,9,4 1 - major positive impact on the local #/f9V7 local villages and is now the third es' /4-9 probably have all three Bali sites things in the future. Nobody open to the public, contributing- could have imagined when we got perhaps- 10% of our revenue." The development of the Bali started that we would now have two far-apart locations-and a pearling ventures has had a tourist attraction, too!" * economy. C. Richard Fassler i& an Ecoliomic Development Specialist for the State North Bali Pearls employs of Hawaii. He organized Pearts '94 over one hundred people from the co-chaired pearl sessions at World Aquaculture Society conferences around largest contributor to the regional the world. He visited Atias' Bili farm i,2 economy The opening of the site May, in Honolulu, and has since chaired or

21 C--- ' A RECENT FIND We have recently discovered a small stash of like a copy, send a fax to XXX here in Andy Muller books, which we believe are now out America, with your name, address, return phone/ where, with receipt, on a first come, first served of print. This is one of the best books describing fax, credit card type, number and expiration date. the beginnings of the cultured pearl trade up until We shall mail out for US$35 domestic, US$45 elseour modern day times, lavishly illustrated, clearly and precisely written... a must for every pearl affi- basis. We urge you to act quickly as there are only cianado. Original cover price: US$60.If you would a very limited amount of these books available. >

22 The International Pearlin Journal RATHER PRINCELY PEARL DESIGNS T T Thal's not to like about Prince Dimitri was raised vase with motifs that were pearls?" wonders HRH among Europe's privileged and particularly intriguing, which I Prince know will work its way into my Yugoslavia, Vice President and His parents (Princess Maria designs." Creative Director of Assael Pia of Savoy and Prince Alex- Although Prince Dimitri International. ander of Yugoslavia) exposed has no formal jewelry design Although it's a rhetorical him, from an early age, to count- training- «I had to teach myself question for this longtime pearl less worldly treasures. "But my how to draw and sketch," lover, he stresses the point: No. 1 passion was always jewelry. he says-he has a thirst for «They'rebeautifulandmysterious. I went to exhibits, galleries knowledge that inspired him to They are the most feminine of and museums all my life- and take the Gemological Institute all gems." still do- and one of the most of America's course in stone Two years ago Prince astonishing things I saw was appraisal. Dimitri Karadjordjevic became the crown jewels of Iran." After years as a top-tier Dimitri of intellectual elite. the creative force at Assael appraiser. he understands the International, among the world's constuction ofjewelry as if he had best-known irnporters and apprenticed as a bench jeweler himself. and, not surprisingly, where pearls and felt that While at Sothebv's. in 1999, wholesalers ninety percent of top-end of the pearls.. designs G G have nobody always had really loved he began to design cuff links for revolve around pearls. himself, and had a goldsmith «I've always loved pearls and done anything truly inter- create them. They featured felt that nobody had really done esting with them, anything semipreciouis stones such is anything truly interesting with topaz and aquamarine set in 18- groundbreaking:' karat gold with accents such as ruby cabochon. «They were very minimalist them, anything groundbreaking. So, I was genuinely excited when Assael International presented me with an opportunity to do Prince Dimitri was 16 when but extremely elegant," he notes. just that, using the gems I so his stepfather traveled to Iran «It wasn't long before people adore." on business, accompanied by asked if I would make cuff Prior to joining Assael, the the family, and was invited by links for them. And soon I was prince was a jewelry appraiser at Empress Farah Pahlavi's niece designing rings, too," Shortly Sotheby's for 15 years and- at the to view the crown jewels. The thereafter, he began to market timeheleft, decampingto Phillips majestic daggers, swords, fiacons, the Prince Dintitri line at major auction house (now Phillips, thrones, bijoux and "trinkets" department stores. de Pury & Company)- he was made such an impression that, When Salvador Assael Senior Vice president in charge of says the Prince, «1 had to return invited Prince Dimitri to join his Sotheby's jewelry department. the next day because there were company, which was already well- He spent two very successful so many amazing things to see," known for its pearl jewelrv, and years at Phillips as its Inter- Beautiful things continue particularly for its astonishing national Director of Jewelry. His to not merely influence but en- selection of Tahitian pearls, he experiences at both houses gave rapture him.his blue-green eyes- made a perfect design match. him the rare opportunitv to work the color of the lagoons where the And thus, this student of on some of the most outstanding Pincrada margaritifera oysters law, finance, philosophy and estatejewelry sales ofthe century, producetahitianpearls-actually mathematics found hirnself including those of the Duchess of flicker with light when he speaks fulfilling a lifelong passion. Windsor and Jacqueline Kennedy of art and culture. "Coming to Assael gave me Onassis. 9 find almost anything a the opportunity to design with Born and schooled in Parisl source of inspiration. The other the gems I adore. We determined and fluent in five languages, day I saw a marvelous African "Prince" to page 23

23 "Prince" from page 22 necklaces and bracelets on rubber JAR (Joel Arthur Rosenthal), filaments and accents them with Jannes Taffin de Givenchy, we were going to give pearls a diamonds as a counterpoint. Faberga, Lacloche, Boivin and fresh look and create a line called On each page of the latest Cartier. 'The New Look of Pearls.'" Assael catalog, his creative And like any designer, his Assael International has approach is obvious. own workspace is littered with long been a leader bringing There are pictures of pearls the signposts of "stimulation": Tahitian, or black, pearls to the used in refreshing ways: bangle pictures, clippings, talismans of international marketplace. bracelets made from exotic past journeys, trays of colored In 1984, when consumers woods like amaranth and pencils and Caran d'ache pastels, were just getting to know these cocobolo; necklaces with pricey and drawings that are not in his captivating, lustrous gems, pearls hanging nonchalantly meticulously kept design books. Salvador Assael, an established from feminine but unpedigreed For a man who is a self- South Sea pearls wholesalen was silk cords; and major South Sea taught illustrator, his sketches recognized as a pioneer by the "globes" set cunningly in bright are remarkably detailed and government of French Polynesia enamel shanks, rings that could painstakingly wrought. for his efforts in developing the easily be the focal point of an "You must constantly make industry in that country. entire ensemble. your jewelry different. It's part So, what better place for Asked what materials he of what being a designer is all Prince Dimitri to land than at an might not incorporate into his about," he says. importer and wholesaler's, where pearl designs, Prince Dimitri "At Assael, we don't do a the vaults were filled with pearls, shrugs his ramrod-straight specific number of collections pearls and more pearls? shoulders and admits there is each year. We're not set up like Early on in his design career little he wouldn't consider. the fashion world. You take a look at Assael, Prince Dimitri knew "I like everything. I like every and build, and keep building on he wanted to make a choker, "but metal, every stone, every style. it, evolving." something new and the first thing I'll continue to find more things "The New Look of Pearls" has that comes to mind when you to use, to set pearls apart and been well received at the retail think of chokers are the lovely create interesting statements level. Prince Dimitri ticks off a Edwardian ones that were made with them. I love wood, and find it list of stores that have stocked with dainty, black-velvet ribbons. quite chic, especially when mixed and sold the line: Neiman Marcus "I thought.'what is the black with stones and gold. And I love and Saks Fifth Avenue among the velvet ofthe 21st Century?' and I the flexibility of rubben" department stores, and specialty knew that it had to he denim." And what are Prince Dimitri's retailers including David Orgell Indeed. the denim line is a favorite pearis? in Beverly Hills,Yamron Jewelers cutting edge one, with unexpected "Baroque. They are sugges- in Naples, Fla., Susan Robinson touches. There are no plain tive of so many shapes and forms. Collection in Tyler, Texas, and chokers set with single pearls; They're appetizing, and each is Mayfair Jewelers, with several instead there are grommeted so different, each is like a little shops in Long Island, N.Y. collars with ruby heads and creature." Prince Dimitri sums up his Tahitian pearls dangling from The prince sports one baro- love affair with pearls succinctly: gold-beveled holes and V-shaped que Tahitian on his right wrist, "I love Tahitian and South Sea chokers edged with creamy South strung on a beige suede cord. It pearls equally They each have Sea pearls and akoyas on gold resembles a little animal, with their charms. What I make will chains. minuscule bumps that could be often be decided by the shape, the Not content to just work ears and a nose. On his left wrist, color and quality of the pearls. with denim, Prince Dimitri has he wears another luminous black And. it will depend on what my explored all manner of material pearl, joined by a few trinkets. mood is, too, as well as what just to create innovative pearl looks. "Ah," he says, almost swoon- feels right for the materials." He shapes feathers into ing, "I also love pear-shaped or And as if we didn't get it yet, chokers centered by a single, teardrop-shaped pearls. They're he reminds us once more, "I just significant pearl (15mm or 17mm, so elegant." love pearls." for example) and ruby, sapphire He speaks with reverence or emerald cabochons. He sets when he mentions the work of Source: Couture International Jeuae.It:r