Confindustria Federorafi represents more than 500 Italian companies (industrial and artisanal) that work in the gold silver and jewel segment. Most of the companies are located in Arezzo, Vicenza, Macerata, Milan, Valenza and Naples and transform in jewels more than the 70% of the gold, silver, platinum and palladium wrought in Italy and then exported worldwide.
Federorafi is the most qualified interlocutor of the gold-silver-jewels smith Italian producers not only because it protects their rights and interests but also because it takes part in the debates of national and transnational problems of general interest.
Thanks to my professor Andrea Bellomo, I had the chance to interview Stefano de Pascale, Director of Federorafi, and Dimitri Stella, Vice President Vicar, who shared with me the panoramic of the Made in Italy gold silver and jewel segment.
- What’s the actual situation of the goldsmith silversmith and jewel smith sector in Italy?
In Italy there are 9000 enterprises with 4-5 employees average. It is a very fragmented scenery, concentrated in 5 main clusters: Vicenza, Arezzo, Valenza, Naples and Milan. In this scenery a key role is played by the wholesaler, a critic figure that is more similar to a retailer. We have to consider that in Italy there are 20.000 points of sales, whereas in France there are 6.000. Until 10 years ago, this was the strength that allowed a strong penetration of the product in the national market; in order to be able to compete globally it is now necessary to change the approach to the markets.
- What about exports?
In 2014, the sector has exported around € 6.5 billion, 70-75% of the total. However, the goldsmith product has always been present in the worlds markets, most of the times thanks to foreigner buyers who resold the Italian handcrafted goldsmith, especially as American brand. This is what has caused the lack of the recognisability of the Italian products.
Before the crises, 1/3 of the exports was dispatched to USA, 1/3 to Europe and 1/3 to the rest of the world.
The scenery has totally changed, since the 20% is now absorbed by the UAE, 20% by Switzerland, followed by USA for the 8%. The remaining 51% to the rest of the world.
- Who are the main international competitors?
In the last ten years, the Italian product had to face a strong competition by countries of the new industrialisation as China, India and Thailand, the most competitive in the goldsmith segment.
Until 10 years ago, Italy was the only country to work 400 tons of gold per year. Nowadays Italy works around 90 tons, India China and Thailand around 500-600 tons. Those competitors compete internationally and are facilitated by advantageous customs duties when approaching new markets.
This key element allowed the erosion of the Italian shares on foreign markets. For example USA, where the Italian product exports decreased from 34% to 9%.
- Let’s talk about number, differences between the pre crises and today.
As all of the other sectors, also ours were affected by the crises, even though a process of change in terms of production units and commercial units started from 2001.
The number of production units decreased by the 28% compared to 2001, with the shutdown of 3.400 enterprises.
The commercial units (wholesalers, retailers and cash-for-gold stores) decreased by the 7%.
For what it concerns the pre crises what is relevant is to notice the changes in terms of turnover and internal sales. The turnover is far from the 2007 level with a negative difference of 15-18% and the internal sales are about a 35% negative.
- Any positive forecast for the future?
In 2019, exportations are expected to increase of 3 billion, an important growth that will allow the emerging markets to overcome the mature ones in terms of bearing on the flows of Italian exportations.
However, this will be possible if the Italian industry will maintain the actual positioning on the foreigner markets, with an average share of 20%.
The growth of the demand in the next years will come especially from countries that are 6000 km far from Italy (on average) and where there are already strong competitors, rich of raw materials and with an ancient tradition of working these materials, such as India, China, Thailand and Turkey.
The higher demand will come from UAE, with an increase of flows higher than 600 million in the next 5 years, which is definitely important because UAE are the principal worldwide logistic hub for our sector and represent the way to penetrate the Indian market. However, the Italian product suffers in this situation where competitors and custom duties are hardened.
Great opportunities also in China, considered as the second market for relevance on the exportations with an increase of the 76% in 5 years.
We then have to add those countries that work as a bridge towards other markets. These countries are Turkey, Thailand and Mexico, where beside the growing internal demand, a part of the flows ends in Russia, China and North America.
Interesting perspectives come from north African markets. First of all this area is close to Italy which allows also SME to reach these markets. Libya, Morocco and Tunisia are the main destinations and the area (including Algeria and Egypt) in 2019 will absorb more than €130 million, compared to € 105 million in 2013.
- Which are the main critical points for the Italian enterprises in order to maintain the actual positioning?
For sure, a key word is internationalisation. However, internationalisation is a process of different actions.
The main challenges for the Italian enterprises are: to differentiate and control the markets with more attention to the final phase of the value chain; to go farther; to be more efficient with a constant analysis of the referring benchmark and of the definition of prices and margins.
- How is Federorafi helping the Italian enterprises?
From an institutional point of view, we are working on creating better conditions for the internationalisation of our enterprises intervening on themes such as customs duties. Our priority is to overthrow customs duties in favour of a zero on zero. To propose to an enterprise to participate to India’s Fair could risk to create illusions if the custom duties are 12%.
We then protect the value of the Made in Italy, as very important added value especially for those enterprises that don’t have a recognisable brand. For this reason it was evident the necessity of an European regulation for the labelling and Federorafi was able to make it compulsory for protecting the Made in Italy from other products.
Finally, we assist the enterprises to face the process of internationalisation by giving them the necessary information for approaching the foreigner markets and by promotional initiatives.
- What kind of initiatives?
The Italian enterprises, especially the small and medium ones, suffer when approaching the global market, which needs to be studied for being penetrated properly. For this reason, we have in project to build a profile of export manager, taken from the sector and share his knowledge to the enterprises that respond to few but compulsory requirements: a website, an online visible catalogue with the descriptions of the products and a person inside the enterprise that is able to speak English properly. Finally yet importantly, constancy, the real key factor that makes the process of internationalisation possible, if working on it day by day with a long-term perspective.
- Which is the unique characteristic of the Made in Italy for you?
The Made in Italy is well known for the capability of Italian craftsmanship. However, we believe that it cannot be enough because the emergent countries are valid competitors and this ability is spreading thanks to their possibility to face the international market, as they have never been able to before.
What nobody else has is the Italian design and oestrus. This genetic creativity reflects also in the capability of some entrepreneurs to personalise the machineries for obtaining a product in a particular way that only he will have. They are able to personalise machines for standardized productions becoming craftsmen on the machine itself.
- How can a jewel be responsible?
Today more then ever, we hear and read debates on enterprises social responsibility, ethic and protection of the workers’ rights. In 2005 was found the association Responsible Jewellery Council and Federorafi represents the the gold-silver-jewel smith enterprises in this association. The aim is to help the enterprises to implement these concepts in the process of working the raw materials regarding the environment, the right of the workers and the origin of the diamonds and minerals that cannot come from territories of war. The topic started in the 90’s but it concerned only diamonds. Starting from 2010 in USA, it is compulsory to track the origin and the passages of minerals as well, in order to demonstrate that the product didn’t finance war actions in Africa.
Confindustria Centro Studi, Esportare la dolce vita. Il bello e ben fatto italiano nei nuovi mercati. Roma, Editore SIPI S.p.A., 2014.