Shrenuj Sight Suspended, Downs Botswana Ops

Mumbai: Shrenuj & Co., one of India’s largest diamond cutting firms, said its supply arrangement with De Beers has been suspended, and its Botswana operations were scaled back amid continued strain on its liquidity position, according to a report published on Rapaport.

“In the recent few months, we have been facing strong headwinds in our business, largely due to external factors, including rising input costs, weakening of the Indian rupee, and a stagnation in demand in some of our key markets,” Vishal Doshi, Shrenuj’s executive director, explained in an email to Rapaport News. “These factors strained our liquidity and compelled us to downscale our operations to sustain the business.”

Shrenuj announced in June it was “rationalizing” its workforce and a month later was forced to issue a clarification to the Bombay Stock Exchange following an order by India’s debt recovery tribunal to seize its assets. The company reported sales fell 34 percent to $265.7 million (INR 17.89 billion) in the fiscal year ending March 31, contributing to a $6 million loss.

Shrenuj opened its Botswana operations in 2010 as De Beers incentivized companies with rough supply in Gaborone to help grow the African nation’s diamond manufacturing sector. While Shrenuj’s sight was suspended in July, the company is currently in talks with De Beers to resume the supply deal, Doshi stressed. That would enable the company to increase its operations in Botswana as soon as possible, with activity expected to resume normalcy after the holiday season, he added.

“We have adequate management bandwidth and access to additional resources to overcome these issues,” Doshi said. “Our business is deep rooted with very strong fundamentals and is adequately capitalized to run efficiently.”

De Beers declined to comment on customer contractual issues.