Beijing: Chow Tai Fook Jewellery Group Ltd. (1929) is considering acquiring stakes in diamond mines to secure long-term supply of the gems as it targets growing demand for diamond jewelry in China, reports Bloomberg.com.
Several mines around the world have asked Chow Tai Fook to invest, and the company has looked at some Canadian ones, Executive Director Adrian Cheng said in an interview in Shanghai yesterday. The world’s largest listed jeweler currently has diamond processing and cutting factories, and doesn’t own any mines, he said.
“There are a lot of opportunities, but it is not very easy because it is always in a foreign country, somewhere in Africa or Botswana, or anywhere around the world,” Cheng said about the mines. “We need to measure the political risks, economic risks, deployment of staff — it’s not an easy decision.”
Chow Tai Fook, whose name partly means “big blessing” in Chinese, is expanding into the diamond business as rising incomes boost demand for precious gems in China. The jeweler plans to open five stores of the newly acquired Hearts on Fire diamond brand in the Asian nation by March and expand to more than 300 stores in Greater China by fiscal 2019.
Chow Tai Fook is very cautious with mergers and acquisitions, and is only exploring the mine purchases, Cheng said. Any investment decisions would depend on the location and quality of the diamonds, and it would be difficult to pin down a price for acquisitions, he said.