How do you assess the previous year as it comes to business factors?
The previous year can be summed up as a good one. Surely it was not worse than 2006, although an increase of sale, having been since 1998 on the level of a dozen or so percent, slowed down considerably. This curbing results from a decrease of an exchange rate of euro and American dollar which has made export less profitable. The results of export limitation could be observed on the Polish market where they directed a production surplus from the years 2000-2004. That is why amber jewellery could be bought everywhere, even in a supermarket, and it has had a negative influence on its not so good image in the eyes of final buyers.
However, the year 2008 is going to be interesting. Mainly because it will turn out if in such situation the partners, wholesalers and distributors want to increase percentage share of amber jewellery in their offer or decrease it in favour of some other assortment. This issue is very fundamental as very often they are tempted by a quick profit and they buy much cheaper jewellery on the Asian markets. So it is also going to be a year of verification of some mechanism of many companies’ business activity and policy. As a result some of them will have to close down, others will be forced by the situation to look for other place on the market as they will not be able to rival the competition.
But it is difficult to look optimistically in the future when Polish currency is getting stronger in comparison with dollar and euro and the raw materials’ prices are still increasing.
I think that the Poles will manage, as usual. The American and Asian markets has shrunk indeed but I would not let myself be too pessimistic. If you have serious customers they should understand that the increase in products’ prices is a necessity. In the world there is some group of amber jewellery lovers who will always buy it regardless of the fact if it costs USD 15 or 20 per item. But undoubtedly the group of customers who used to buy it because it was relatively cheap is going to be reduced. The Americans demand maintaining previous prices but it is just impossible because it provides no profits for the producers. Besides this market has been saturated as in the period of overproduction in Poland the wholesalers used to buy a lot because they wanted to have a wide offer. It was not considered then that if in Poland 1 woman in 10-12 bought amber jewellery, in the world’s scale it was 1 in several dozen. In my opinion the American market must “cool down” a bit, there must again appear a demand for amber products.
As a matter of fact a real danger for the trade is not a strong zloty but Chinese companies. An amber mine in Kaliningrad sells quite a lot of raw material to China and the companies from this country are more and more efficient in production. The Asian markets have already been deluged with amber jewellery – these markets have been saturated so now the Chinese are going to expand into other ones. The fair in Tucson showed that in the USA there are plenty of products from amber manufactured in China. In about 2-3 years China will attempt to enter with this assortment also the European markets.
Are these products made of Baltic amber or its fakes?
The companies I know do not offer copal nor plastic but amber. The fakes which appear on the market mostly come from Poland, Lithuania and Turkey. Especially in Poland they produce a lot of jewellery with Columbian copal – it is enough to look at the data of the Statistic Office how much resin is imported and from where. Of course if a producer informs about the fact that this is copal, there is nothing wrong with it. The problem arises when a middleman or a shop assistant offers the same product as amber. Consequently final buyers are very often cheated and in a few years it can result in a total turning their backs on amber. Producers are also to be blamed: a threshold of entering the trade is very low and of leaving is very high so if someone has already entered this trade, he or she is determined to stay and earn money, often with negative results for other companies. That is why amber trade tempts people geared towards fast and easy profit, not caring about the image of amber, trade as well as the results of their practices in longer perspective.
It is said that the Poles themselves have made a rod for their own back as they have taught the Chinese to process amber…
There is always “some chaff among the best wheat” – it cannot be avoided. But we also should not bemoan it too much – we have an incredible history, we must still work so that on our products appears a label “made in Poland” and that the world notices that the Poles have a high quality production and good design. We have a potential, we build a good name and let’s use it, not paying attention to the Chinese.
So what exactly should be done?
I think that the most important challenge is to build one strong good name of Polish amber which would become a some kind of workhorse for the whole trade. And I do not think now only about banding a few producers together who will take up some promotional activities as it comes to amber jewellery – it must be a project on a much bigger scale. Such role could be played even by a foreign company with a huge capital and a popular, recognizable name. Amber needs a good name in order to be better sold. Especially in a current situation when import of amber products from Poland is getting less and less profitable – the cost of work has considerably increased as well as the prices of raw materials, and amber itself is very expensive and the Polish one is difficult to get. So the jewellery decorated with it has ceased to be as attractive as it comes to the price to be readily bought by mass customers. As a matter of fact in the world you do not buy jewellery products but the cheap, seasonal ones made in China or a very expensive, designer jewellery. The problem with amber is that it has no recognizable brand and besides it is less durable than for example pearls or other natural stones, so it is difficult to make a luxurious commodity out of it. That is why we need a strong brand which will both function on European markets and be present there where better off European tourists get. There are still many markets which can be gained for amber, e.g. Brazil, Argentina or even some African markets – in all these places there is still place for our production.
The previous experience showed that it was difficult to convince the trade to common activities, and individually no-one is going to manage this task.
The amber trade needs a strong person – a charismatic personality who would enjoy respect and would be able to encourage other companies to common activity for the sake of a development and promotion of amber. The problem is that our trade consists of too independent personalities who have achieved everything by means of their own work and smartness and it will difficult for them to accept strong leaders.
And I guess this is one of the most important reasons of lack of possibility to unite the trade and incapacity to cooperate.
The more difficult it is to believe that we do cooperate with some companies as it comes to an exchange of technologies, designs or even customers. It is possible but only with the companies which has been present on the market for many years and have a good position on the market.
So what would be your advice for your colleagues from the trade?
Surely there is no point in sitting passively and waiting for customers but there is a need to take strategic, well thought out commercial and marketing decisions, thinking about the future
