News from Vietnam

Vietnam was once regarded as an up and coming supplier of fine gems but inflated prices, the penetration of local markets with synthetics and last but not least the spectacular discoveries in Madagascar have dashed all hopes quickly in the Socialist People’s Republic. Now some dedicated miners and traders try a comeback.

In the mid 90ies spirits ran low amongst ruby traders. Sri Lanka hardly supplied quality stones any longer, Burma rubies got more expensive by the day and fresh supply from Pailin, Cambodia, could only be procured at the risk of one’s life due to the prolonged civil war and a particularly nasty strand of malaria prevalent in the area. Thai rubies never sported exciting colours, the same goes for most East-African material and Madagascar rubies were yet to be discovered.

Then, out of the blue, Vietnam entered the scene with fine rubies and pink sapphires. Traders, particularly Thai traders, scented the morning breeze and pilgrimaged to Hanoi in droves. Unfortunately they soon had to realize that initiating business with the Vietnamese was all but easy.

The official way: red tape and free market economy

The Vietnamese had their own ideas, and rather quaint ones at that, of the free market, which soon proved incompatible with everybody else’s.

As author of these lines I know what I am talking about. I was engaged in serious negotiations with the managers of a Hanoi based company who had contacted me, looking for a general agent for the German speaking countries. I got to see some very promising ruby samples and signalled my interest. The resulting Vietnamese red tape drove tears to my eyes and believe me, as a born and bred Austrian I have had my share of paper-warfare and do not frighten easily.

Veritable monster contracts in German, Vietnamese and English were shipped across the globe several times. In February we talked about my prospective partners coming to see me in Austria in October. In January of the following year I boarded a plane bound for Hanoi, still without a valid agreement.

Once there, I was introduced to an army of stalwart bureaucrats from the CEO down. Finally I was shown the merchandise, mostly ruby of doubtful quality and in deplorably small numbers. When I, the prospective general agent, was told prices that exceeded my ideas by the five- to tenfold (e.g. USD 140,00 per carat for the whole 500cts of a lot small rounds, the best 10% of which I could buy at every Bangkok street corner for 80,00!) I thought nothing of it. Being an old hand in the trade I am not frightened by over inflated “asking prices”.

However, I was close to tears when after one hour of serious arguing I was offered a generous 10% discount if i bought each and every stone they had on stock and the counsel that I could easily re-sell the small rounds for USD 140, 00 in Italy or Japan.
Now I know next to nothing about the Japanese market but I am very sure of the kind of reaction I would get from an italian goldsmith.

I don’t know, if they have a general agent by now, but I have my doubts…

The unofficial way: unbureaucratic and ruinous

The majority of my Thai colleagues of course did not bother with the above. They found their ways to the mining sites in Vietnam’s mountain districts and transported the rough back to Bangkok in their trouser pockets. At first business was thriving. Soon enough the Vietnamese firstly could not meet the growing demand with what mother earth supplied them and secondly they found that synthetics could be sold with much less labour and at much higher profits.

When word spread that some Thai traders had spent high five- to six-digit dollar amounts for skilfully prepared synthetic rough (directly from the mine), ruby-tourism came to a rather abrupt halt…
New start

In recent times we have seen an increasing number of Vietnamese gems being offered by Vietnamese traders in their home territory, on the internet and in the USA, mostly pink and red spinels as well as some nice pinkish star-sapphires and –rubies. The quality of the stones on offer is remarkable, as are the prices.

Spinel, light pink, small inclusions, 2.87cts, USD 550, 00/ct
Spinel, dark red, very small inclusions, 3.80cts, USD 820, 00/ct
Spinel, very dark red, very good clarity, 8.28cts, USD 800, 00/ct
Star-sapphire, pink, good star, colour-zoned, 1.06cts, USD 600, 00/ct

Since the Vietnamese still make no difference between re-seller and private customer interest from international traders is fairly limited. So they try to market their stones via the internet or at international gem fairs.

Good luck!