Silver Jewelry Argent Needs

One of the six major Nepali exports overseas, silverware and jewelries, is suffering almost the same fate today as woolen carpets and readymade garments.

The reasons may be various. But according to Michael Saupe, an international consultant in this industry, the fundamental problems in Nepal lie in the producers’s attitude towards product and service development and restrictive trade regulations (see box).

A German designer and goldsmith since 1976, Saupe visited Nepal twice a year between 1991 and 1996 as a

consultant for silver jewelry producers. He again visited Nepal recently "to carry out various activities" jointly organized by Swisscontact/ Small Industries Promotion Program (SIP-P) and Handicraft Association of Nepal (HAN) for the improvement of silver jewelry sector. Carrying out those various activities, one of the diagnoses Saupe made about the industry is limited interaction between silversmiths because of a highly developed sense of competition and keeping techniques secret. The result: most of the silver jewelry offered by Nepali producers falls under the segment of holiday-souvenir, difficult to sell in the international market.

Saupe also found the teamwork between exporters and producers limited to producing according to job orders. Majority of exporters are not prepared to invest in training their sub-contracted craftsmen, thus limiting the possibilities of product variations, he observes.

Backed by the experiences of working with the silver jewelry industry in Indonesia, Thailand, Peru, Ghana, Philippines and Sri Lanka, Saupe says that most of these foreign competitors of Nepali jewelry entrepreneurs had started small and they grew big through industriously improving work performance Investment into equipment and training followed as reinvestment of the earnings.

"Export isn’t easy"

-Michael Saupe

Q. Where do Nepali silver jewelry exporters stand in the world market ?

A. It is sad but true that most of them are not able to compete with other Asian country exporters. This is mainly due to the narrow marketing focus of most of the Nepali exporters. Let me make one thing clear here. When a tourist visits Nepal (s)he wants to take back some souvenir. So (s)he buys something that has a Nepali touch and reminds him/ her of Nepal. But if you think the same products have export potential and will do well in Europe, you are wrong. The same person back in Europe is no more in a holiday mood and requirements with reference to design and quality are much higher.

Q. What do you think Nepali entrepreneurs should do to improve their competitiveness then?

A. There is no doubt that getting into export successfully does carry the potential of high benefit for businessmen but export is not easy, as the competition in the world market is getting tougher every year. Nepali exporters have to do something immediately to get out of the holiday-souvenir and niche-market product segment and develop contemporary designs which are in demand in the European, US and Japanese markets.

Q. East Asian countries like Indonesia, Thailand and Philippines are much ahead of Nepal in exports of silver jewelry. What do you think are the reasons for this ?

A. Yes, Indonesia was ten years ago at the same level Nepal is now. One of the reasons for the success of major Asian competitors of Nepal in the international silver jewelry market has been the liberalisation policy leading to free import of gemstones, accessories and tools and machinery required for jewelry production. Hence, Nepali trade regulations on import of gemstones, silver-findings and tools and machinery urgently need to be changed. Other factors are improved business management and administration, investment in further qualification of staff, product development in terms of design, appropriate marketing strategies and tailor-made customer service and continuous improvement in the product quality. Nepal has a long tradition of handicraft production and this surely is a great advantage but you will really have to work hard to improve all the factors to become more competitive. Producers and exporters should develop products with high quality standard that cannot be easily copied.

Q. Do you think Nepali entrepreneurs are capable of doing this ?

A. Yes, I am fully confident. But you must understand that there can be no short cut to success. These things will take time and constant effort and hard work is required.

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