Indonesia Sourcing: Silver jewelry 2018

Indonesia Sourcing: Silver jewelry 2018 Sector highlights

Indonesia Sourcing: Silver jewelry 2018 Suppliers & products

Products

Below is a selection of products from our featured suppliers. Click on the images to find more products and supplier information.

For a complete listing of the featured suppliers, click here.

Bracelets

Earrings

Necklaces and pendants

Rings

Indonesia Sourcing: Silver jewelry 2018 Industry overview

Indonesia footwear exports	Competitive advantages	Challenges	Industry composition
Indonesia is one of the top 10 exporters of jewelry and parts containing precious metal. The country sent abroad nearly $4.1 billion worth of products, with silver designs accounting for less than 1 percent of the export value. From January to November 2017, exports of the products amounted to $59.6 million.	The country ranked as the 16th largest producer of silver in 2016, according to the World Silver Survey 2017 report. Silversmiths practice traditional techniques that produce unique designs. Government initiatives to support MSMEs also benefit the silver jewelry industry.	Competition in and out of the country is tight. Monthly minimum wages went up by about 8 percent starting January 2018. Many companies also struggle with having limited financial resources for marketing.	Indonesia is home to more than 30,000 jewelers. Small and midsize makers account for the majority of the silver jewelry industry. Bali and Java islands are among the key production hubs.

Competitive advantages

Having a domestic source of silver is one of the advantages of Indonesia’s silver jewelry industry, allowing makers to minimize sourcing expenses. The country is one of the major producers of silver, ranking 16th in 2016, according to the World Silver Survey 2017 report produced for The Silver Institute by the GFMS Team at Thomson Reuters.

Indonesia is also home to mines that produce gold, copper, tin, nickel and other minerals. Various gemstones, including diamond, citrine, opal, amethyst and jasper, are domestically available as well.

Being home to silversmiths who use techniques inherited from previous generations is another point in the local industry’s favor, as this enables the creation of designs that are unique to a locality. Javanese craftsmen are known for fine filigree work, while those in Bali are recognized for granulation.

Indonesia’s jewelry makers also benefit from government initiatives to encourage foreign investment and support small and midsize businesses. The Credit for Businesses (Kredit Usaha Rakyat) program, for instance, provides MSMEs and cooperatives access to credit, working capital and investment financing. In terms of marketing support, the Ministry of Trade helps promote Indonesia-made jewelry through trade missions and exhibitions.

Challenges

Competition in the domestic and international scene is tight, especially with online shops making it easier for buyers to compare products and prices. Silver jewelry suppliers not only compete with each other but also with producers of other types of jewelry.

Makers offering handcrafted designs also find themselves competing with suppliers of machine-produced items, which can be manufactured in bulk, released faster and priced lower. Producing 300 to 400 pieces using traditional techniques can take two to three weeks, and models with complex filigree work may take longer.

Amid the intense competition, increases in raw material and labor costs are major concerns. Rates for silver fluctuate depending on the world market. The upward trend in labor-related expenses continues, with monthly minimum wages across the country having gone up about 8 percent starting January 2018.

Small and midsize companies, which make up the majority of the industry, also face the challenge of having limited financial resources to invest in marketing or expansion.

Documentation required to produce and export silver is also a concern among suppliers. Suppliers of silver jewelry and other mining products need to obtain a document from the government allowing them to export such items. This can take time and adds to operating expenses.

Industry composition

Indonesia has more than 30,000 jewelry suppliers in 2015, Metro TV News reported in June 2016, citing the Ministry of Industry.

Makers operating on a small scale typically have fewer than 20 workers and their monthly output does not exceed 10,000 pieces. These companies usually generate less than $100,000 in annual sales.

Midsize makers can have staff of up to 100. They can produce more than 10,000 pieces per month and their yearly revenue can reach $800,000.

Suppliers with larger workforces and factories can typically roll out 30,000 or more pieces each month. The annual revenue of these companies usually exceeds $800,000.

Bali and Java, and the provinces of Jakarta, Yogyakarta, South Kalimantan, Western Nusa Tenggara, and North and South Sulawesi are the key production hubs for silver crafts.

Supplier location map

The highlighted areas on the map show the locations of the head offices and factories of the silver jewelry suppliers featured in this report.

Indonesia Sourcing: Silver jewelry 2018 Product features

Materials & designs	Manufacturing & QC	Pricing
Sterling silver or 925 silver is commonly used. For embellishments, many jewelry makers turn to colorful gemstones from Indonesia’s various islands. Designs range from simple pieces with few embellishments, to models with intricate filigree or engraved patterns	Most production steps are typically done in-house. Many steps are done using hand tools instead of by machines. The QC process usually includes checking that the inputs used and the final products comply with customer specifications.	Silver jewelry is typically priced based on types and amount of metal used, the latter of which is usually determined by weight. The complexity of the silver work and other design details push up quotes. High-end pieces use sterling silver and often feature more decorative elements and intricate details.

Materials & designs

Silver jewelry articles from Indonesia include earrings, necklaces, pendants, bracelets, rings and brooches. Makers typically use sterling silver, or 925 silver, which is an alloy that is 92.5 percent silver mixed with copper or another metal for strength. Silver-plated designs are usually made of copper and alloys.

A number of suppliers also offer models in German silver or nickel silver, which is a combination of copper, nickel and zinc.

Manufacturers procure raw silver or sterling silver from ANTAM, a state-invested metals and mining company, or via other vendors. Copper is typically sourced from the province of Papua and the island of Sulawesi, while alloys are often from Java and Sulawesi.

Gold, which is used as an accent is some pieces, is sourced from the islands of Java, Sumatra and Kalimantan.

For embellishments, many jewelry makers turn to colorful gemstones such as turquoise, opal, jade and agate, which are typically procured from Kalimantan, Java, Sumatra and Bali.

Suppliers are also adopting ornaments made of environment-friendly materials such as bamboo, recycled wood and coconut shells, which are also available domestically.

Filigree and solid silver options are offered. Filigree designs make use of silver wire and beads to form different designs, while solid silver craft are made from metal bars.

Designs range from simple pieces with few embellishments, to antique- or vintage-inspired designs with intricate filigree or engraved patterns, and stone accents.

Traditional handcrafted pieces usually highlight Balinese, Javanese and other ethnic motifs. Batik patterns such as kawung and parang, for instance, are adopted across the various product categories.

Nature-inspired designs such as those depicting animals and flowers are also common. Releases from featured suppliers include those with silver work in the shape of leaves, flowers and snakes. Religious themes are adopted as well.

Modern designs, meanwhile, typically feature geometric forms.

Manufacturing & QC

Most production steps are typically done in-house, unless orders exceed capacity.

Raw material preparation, which involves producing wires or sheets from silver bars, and casting are the stages that typically require the use of machines. For other processes, hand tools such as tweezers, hammers and files are typically used.

Intricate parts of silver jewelry are assembled using tweezers, while patterns are outlined and formed using a hammer. Details such as concentric circles of thin silver wire and raised silver balls are carefully assembled using tweezers, while surface patterns are outlined with a pencil and formed using a hammer and a nail.

Locks, hooks and clasps are soldered onto the products. The edges are smoothened with a filing tool or placed in a machine with abrasive powder and polished manually with a buff.

The QC process usually includes checking that the inputs used and the final products comply with customer specifications. Most companies have up to five inspectors.

Production lead time is typically four weeks from order confirmation.

Pricing

Silver jewelry is typically priced based on types and amount of metal used, the latter of which is usually determined by weight. The complexity of the silver work and other design details push up quotes.

Models at the low end of the price range include silver-plated pieces or designs with only a minimal amount of sterling silver. Beads and other decorative elements are often made of seashells or resin.

Designs at the midrange are made of sterling silver. Models can be fitted with pearls, crystals or semiprecious stones., or feature engraved patterns.

High-end pieces use sterling silver and often feature more decorative elements and intricate details. Precious and semiprecious stones such as onyx and amethyst are common decorative elements.

Price guide

Indonesia Sourcing: Silver jewelry 2018 Supplier survey

Export markets & sales

Most makers have a positive outlook on 2018 sales, expecting their increased online presence through B2B sites, online shops and social media to generate additional orders. Of the surveyed suppliers, 38 percent are optimistic that overseas sales will increase 11 to 20 percent, while 29 percent see growth of up to 10 percent.

A number of suppliers will be adopting geometric forms in their pieces for a modern look. Some companies anticipate simple styles will remain popular.

Environment-friendly materials such as bamboo, recycled wood and coconut shells are also expected to be seen in silver jewelry.

Makers also continue to face challenges related to design piracy and obtaining documents necessary for production and exports.

Design piracy has long been considered a problem, but not something that suppliers believe they can control. For buyer-specified designs, makers sign an agreement not to publish images of the products to avoid this issue.

Jewelry suppliers typically purchase silver through ANTAM to ensure that they are using materials from a verified source. Exporters are required to obtain a license and an export approval letter from the Ministry of Trade through the Directorate of Export Industry and Mining Product, and this process can be time-consuming and costly.

Indonesia Sourcing: Silver jewelry 2018 PDF download

Indonesia Sourcing: Silver jewelry 2018 Supplier list