EXCLUSIVE: Polar Bear diamond brand still on ice

by eyetee | November 26, 2013 5:06 pm

By Jacquie De Almeida

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It’s been nearly a year since Deepak International Ltd. (DIL) was awarded the licence of the Polar Bear diamond brand, but there is no sign of activity at the factories that would have been producing them.

The doors remain closed at 106 and 108 Archibald Street in Yellowknife, the Diamond Row facilities that were part of the agreement with the Government of the Northwest Territories (GNWT) to see the iconic Canadian diamond brand back in stores.

Despite that, company president and chief executive officer (CEO) Deepak Kumar tells Jewellery Business he remains confident about opening the factories.

“We are going to start soon,” he says in an e-mail. “[There is a] tremendous amount of paperwork and legal formalities that just got completed.”

Last January, the Ministry of Industry, Tourism and Investment (ITI) announced a deal that granted DIL exclusive use of the Polar Bear design trademark, as well as Approved NWT Diamond Manufacturer (ANDM) status. As an ANDM, DIL would be allowed to purchase a portion of the 10 per cent of rough diamonds produced by NWT producers, fully manufacture it locally, and market the stones as Government Certified Canadian Diamonds. One of the buildings previously housed Arslanian Cutting Works, which used to produce Polar Bear diamonds before the company operating it went into receivership in 2010.

Speaking with Jewellery Business at the Prospectors & Developers Association of Canada (PDAC) annual conference in Toronto earlier this year, Kumar said he would be opening the doors in May, with about 50 fully trained cutters manufacturing 15,000 carats per month. By the end of that month, however, he had revised the timeline, saying the factories would be up and running in late June. However, the anticipated opening date came and went.

Although there is no production at the factories, DIL donated a 1.11-carat Polar Bear diamond as the grand prize for Deh Cho Travel Connection’s Diamonds in the Rough Passport Contest, which the company also co-sponsored.

“The Polar Bear diamond is from our old collection, as it was certified in 2007/2008,” says Kumar. “DIL has been in the business of selling/distributing government-certified Canadian diamonds and Polar Bear diamonds since 2006. We have always been a great promoter of NWT tourism because the Northwest Territories has a lot to offer.”

Brian Desjardins, executive director of Northwest Territories Tourism, says Kumar attended a gala dinner in early November and drew the winner’s name.

“We’re very pleased on behalf of Deh Cho Travel Connection,” he adds.

The delays regarding the opening of the facilities have raised a few eyebrows in the Canadian diamond industry. Some estimate financing the venture to be about $50 million. Kumar previously dismissed those concerns in an e-mail to Jewellery Business in March, saying financing had to be in place before the deal was announced.

Evert Botha, chief operations officer (COO) of Embee Diamonds in Prince Albert, Sask., has been following the story closely. He says his own business is growing and he’s in need of experienced cutters and polishers to keep up with demand. Finding them has been easy; many former Arslanian cutters remain in Yellowknife. Convincing them to work for him in Prince Albert, however, has been difficult.

While three have accepted offers from Embee, three others have told Botha they are staying put, hoping DIL will come through with offers of employment of its own.

“For us, the single biggest frustration in recent months has been finding suitably qualified staff in the Northwest Territories who are prepared to move to Prince Albert,” he explains. “But they’ve all been offered exorbitant packages to cut and polish for a factory that is nonexistent.”

Botha says he and his father, master cutter, Mike Botha, had considered putting in a bid for the licence, but ultimately decided cutting in Yellowknife would not be economically viable for them.

For its part, the GNWT has had little to say about the delays in opening the two factories. However, the government did issue the following statement in mid-November to Jewellery Business:

“The Government of the Northwest Territories (GNWT) Department of Public Works and Services is managing the disposal of two surplus buildings at 106 and 108 Archibald Street in Yellowknife. The sale was publicly listed through Coldwell Banker. An offer to purchase for the appraised value has been received and the GNWT has been working with the purchaser toward finalizing the agreement to purchase and close the sale. Coldwell Banker is managing the sale of the properties on behalf of the GNWT and anticipates that it will be finalized in the near future. A Monitoring Agreement, along with Certification and Trademark Licensing Agreements, were signed with Deepak International Ltd., and Industry, Tourism and Investment last winter. We are pleased that DIL wants to establish a cutting and polishing presence in the NWT, and we look forward to working with them once they have settled any outstanding matters related to the sale. The GNWT will have no further comments on this matter until the sale is concluded.”

Source URL: https://www.jewellerybusiness.com/news/polar-bear-diamond-brand-still-on-ice/

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