Q Regarding your products, do you have a particular best seller?
A Up to Sept last year, our main product line was the planning product line, which allows the manufacturer to plan his rough diamonds and discern the best polished diamonds which he can derive.
The best-selling DiaMark-Z Eye from Sarin.
As we move forward, the Galatea will become a principal product. It fits into the family of planning products but in future it will have other uses which will make laser sawing more productive.
In essence, if I know what’s inside a diamond, I can avoid sawing through various areas that are problematic. At a later date, we can aid the industry in assessing the clarity of diamonds.
Q What is the average selling price of something like this?
A The planning systems are a broad family and the price range is US$25,000-50,000.
Q Typically, how long do these machines last?
A There are components that need replacement such as the laser used for engraving diamonds. We are always introducing new features, upgrades and so on …Usually a replacement per se is not customary.
Daniel Glinert, chairman, Sarin.
A The full-blown planning systems came to market in 2000. Since then, our growth has come from a combination of the adoption of the technology by more and more customers and the expansion of their planning capacity.
Q How much do you spend on R&D?
A Over the past years, we have spent quite a bit of money on R&D – I don’t remember the percentage – but due to current industry conditions, we have rolled back our R&D quite a bit. We are focusing our R&D dollars on the Galatea technology and its derivative applications and a few other interesting products that we will bring to market later this year.
Q Is Sarin the market leader for green laser products?
A I don’t think I can say that. There are only 2-3 offerings of green laser in the market – it’s relatively new. It’s fair to say that outside of India, we are probably the market leader. In India, the competition is more intense – there are more offerings.
Q You are hoping that Galatea takes market share the same way that your planning systems have?
A Yes, I would add that we believe the Galatea will also have significant impact on the retail business by being able to eventually grade polished diamonds.
Q Investors are happy with Sarin's management - they are professionals and devoted to enhancing the competitive edge of the business. I have a few concerns some investors want to relay. On the acquisition of IDEX – do merchants really buy and sell diamonds online?
Source: www.sarin.com
One could forsee a period where by the use of computer imaging – both externally and internally through Galatea – you could trade them on the Internet. IDEX is a more even platform of trading certified diamonds.
For quite some time, there have been electronic trading boards - you can literally find hundreds of thousands of polished diamonds listed for sale at any one time. Because there is a lack of a way to close a deal online, people used normal methods offline to close the deal. The main drawback is that most sellers would only deal with people they knew. The idea of IDEX is you should be able to close deals online.
In June after it was launched, it gained traction. The problem was the industry faced a severe slowdown. Sales had to be concluded on a cash basis. Currently, cash is not something people would opt for.
So IDEX has not gained traction as we had hoped. We decided to write down the investment. At the same time, IDEX is developing two new activities.
Q Do you have any concluding words?
A This is a very challenging period. We have indicated that our revenues will continue to trend downwards in the early part of the year but we do see that our new product offerings and our balance sheet will enable us to weather this period and come out in a stronger market position.
Mark Lee, Kamal Samuel and Sim Kih contributed to this article. The teleconference was arranged by Aries Consulting in Hong Kong (www.ariesconsulting.com.hk).
Part 1 (SARIN banking on a new revolutionary product) was published on Thursday (Mar 12), featuring questions and answers on Sarin’s revolutionary product, the Galatea, and the market situation in India.
