The objective of the Common Facility Training and Manufacturing Center is to provide common training and manufacturing facilities for each of the three primary activities within the industry: mining, gems processing and jewelry manufacturing.

(i) Mining:

With its abundant resources in precious and semi-precious gemstones, Pakistan can have a significant competitive advantage in the gem and jewelry market. However, mining technology and processes are rudimentary and unscientific resulting in significant wastage at the extraction stage. Indiscriminate blasting damages the gemstone crystals and mineral specimen thus drastically reducing their value. In majority of the mines basic machinery and equipment like compressors and drill sets are not available. A large number of mines are currently inactive due to lack of equipment. The SWOG has highlighted a need for establishing Common Training and Facility Centers to upgrade mining practices in Pakistan. The CFTMC will perform two major functions:

The overall objective of the CFTMC is to modernize mining practices, reduce wastage, improve the quality of extracted gems, and thereby increasing the income of miners. Training will improve the skills of those already in the mining industry and train new entrants, leading to an increase in the overall productivity of workers and hence better quality output. Provision of machines will have an immediate impact in terms of rehabilitation of inactive mines and improved production of ones already functioning. The SWOG has highlighted the need for mining CFTMCs in Balochistan, NWFP, Northern Areas and Tribal Areas.

(ii) Gem Processing

Due to lack of adequate processing infrastructure and skills, approximately 75 percent of Pakistan's exports are in unworked stones, representing a significant loss in value added (total value of exports in 2003 was USD 3.7 million). Gems cutting and processing in Pakistan suffers from obsolete technology, limited skills, and lack of precision.

Presently, there are more than 30,000 people involved with the industry and there are around 500 units involved in cutting and polishing of gemstones. Most of the gemstone processors are clustered in Karachi and Peshawar (Namak Mandi), with smaller clusters in Lahore, Quetta and Islamabad. Little value is gained by processing stones as cutting exists on a very limited scale in small one to three person workshops. The prevailing technique is cutting for yield to maximize weight, not value. The industry lacks expertise in precision and calibrated cutting and is not up to date with the latest treatments. The skill level of the craftsmen engaged in gems processing depends entirely on their experience and on what they have learned from their families, mainly migrants from Jaipur, India. These local craftsmen are unaware of latest technologies and international quality standards. Most of the stones are recut, once they reach international markets. While the value addition which can be accrued through processing of these stones (cutting and polishing) starts from 10 times and goes up to as high as 100 times. This reduces the potential price a dealer is willing to pay to the Pakistani seller. Lapidary training is being offered at the Gems and Gemological Institute of Pakistan at Peshawar. Experienced dealers have voiced concerns over the institute's limited resources and training capacity.

The objective of the Gemstones CFTMC is to provide state of the art training in cutting, polishing and treating gemstones as well as common processing facilities in order to enhance the value of gemstones sold into the local and international markets. The CFTMC will train a new generation of lapidarists in the latest processes thereby upgrading their skills and earning potential. Training of cutters will be focused on international standards of calibration and new enhancement techniques. The CFTMC will also provide a common processing facility that can be used by gemstone dealers and exporters. The SWOG has highlighted the need for lapidary training and common processing facilities in Quetta, Karachi, Peshawar, Northern Areas and Tribal Areas.

The CFTMC would offer long-term training and short-term certificate courses. Long-term courses would be for people who want to learn in-depth the different sort of cuts, faceting and polishing. Short-term courses would be for experienced artisans to learn the latest techniques of cutting and polishing. The CFTMC would also offer tailored courses and workshops in response to specific industry, firm or group demand.

As a result of better processing facilities and skills, buyers will be able to place larger orders as calibrated stones are preferred internationally. A common model lapidary facility will encourage the emergence of other private modern workshops leading to an overall up-gradation in the quality of stones and consequently have a direct impact on Pakistan's export earnings. Significant value addition can be accrued by precision cutting and good polishing, which can be captured by gems exporters rather than foreign buyers. By enhancing the income levels of those directly involved in mining and trading, it will have spin-off effects for the entire region.

Better technology and processes throughout the value chain can increase the price of stones by ten times, and in some cases even more. The following projection demonstrates the potential of the gemstone sector if this value addition is captured:

(iii) Jewelry Manufacturing:

Jewelry manufacturing in Pakistan is done on 21kt and 22 kt gold, predominantly with traditional tools and techniques. Although Pakistan's craftsmen are considerably skilled in 22kt manufacturing of stone studded gold jewelry, they lack access to modern technology and techniques. In absence of proper training facilities, the age old ustaad-shagird (master-apprentice) method of teaching is most popular. A few leading shops have their own little training workshops where they teach students, who are later employed by the same shop owners, but these training sessions are more on job training rather than formal teaching. In such workshops, development is constrained due to lack of resources that a private owner can spend to update himself and his workers on latest trends and techniques. The current working conditions do not conform to international safety standards. There is lack of adequate mechanism for exhaust of toxic vapors produced by the chemicals used in manufacturing. The industry uses cadmium based solder which has been proven to be harmful to health.

The industry's current manufacturing capabilities cannot cater to the technology-driven 14 to 18kt market in the US and Europe or other contemporary design oriented markets. Hence, Pakistan's current export potential is limited by its inability to produce high technology jewelry at scale. Few exporters producing chain and bangles in large quantities invest in modern production techniques and provide competitive pricing and good quality finishing. Even domestically, the jewelry market is increasingly being driven by the latest international fashion trends and new market segments. This requires the industry to upgrade its manufacturing capacity in line with international demand as well as changing domestic preferecences.17

The SWOG has highlighted the need for setting up CFTMCs for jewelry in the major hubs 18of jewelry manufacturing19. The CFTMCs will provide manufacturing training as well as a common manufacturing facility equipped with modern technology. Training will be provided in the latest techniques and processes. It will be focused on upgrading the skills for traditional jewelry manufacturing, 22kt contemporary jewelry and high-technology 14 and 18 kt jewelry. The common manufacturing facility is meant for the use of the industry, including current manufacturers who want to move into high-technology manufacturing as well as potential entrants into the industry.

A common training and manufacturing center will equip the industry with the latest techniques and processes. It will provide artisans with the skills needed to upgrade current manufacturing processes as well as train them to use modern technology for production of 14 and 18kt jewelry. The CFTMC will train workers to use alternatives to cadmium based solders as well as how to incorporate safety and health measures in their work practices. The common manufacturing facility will provide an opportunity for existing manufacturers to diversify their product offerings. It will also provide incubation support for new entrepreneurs, who would not have the capital to invest in manufacturing infrastructure, thereby encouraging SME growth and employment generation. It is expected that training in the latest production techniques will allow manufacturers to become internationally competitive and eventually lead to an increase in exports. The overall impact would be to upgrade the industry's skill level and facilitate its transition into high technology production. The CFTMC will also serve as a catalyst to encourage private businesses to invest in modern manufacturing facilities.

Note: Jewelry CFTMC and Gems CFTMC may be combined under the same facility with focus on one or the other depending on need of the region. For example, the CFTMC in Lahore will focus on jewelry training and manufacturing, whereas those in Quetta, Peshawar and Northern Areas will focus on lapidary training and manufacturing. Karachi, being a major hub for jewelry manufacturing as well as gems trading will have a complete CFTMC for both jewelry and gems. The SWOG plans to work towards ensuring establishment of five CFTMCs over a five year period. These will be in Karachi, Lahore, Quetta, Peshawar and Northern Areas. It is estimated that approximately 800 people will be trained in the CFTMC in Karachi, 600 in Lahore, 400 in Peshawar, 200 in Quetta and 20 in FATA each year. The CFTMCs would offer short-term courses for existing experienced craftsman, training courses for new entrants and customized training to individual firms.