BANGKOK and LAMPHUN, Thailand — With a new factory and innovation lab in Bangkok, along with its year-old crafting facility in the north of the country, Danish jewelry giant Pandora is working to ensure that its longstanding manufacturing base in Thailand will fulfill its ambitious goals for 2022.
Earlier this year, the company’s chief creative officer Stephen Fairchild revealed that Pandora — well-known for its buildable charm bracelets — will move into establishing itself as a full-service jewelry brand. Seventy-five percent of its revenues are generated by sales of charms; by 2022, Pandora aims for that split to be 50-50 between charms and other jewelry, like necklaces, earrings and rings.
To reach this goal, Pandora last year detailed an investment of nine billion baht, or $283.6 million at current exchange, over a five-year period to expand its production capacity in Thailand, which is where the majority of its jewelry is made. Pandora has been manufacturing its pieces in Thailand since 1989.
Last year, the company’s Bangkok facilities crafted 117 million pieces, said Nils Helander, Pandora’s senior vice president of manufacturing and managing director, adding that a combined total of 2.6 billion gemstones were hand-set by their craftsmen and women last year.
“Last year we grew by 15 percent. We are aiming to grow year-on-year by 7 to 10 percent [for the next five years],” Helander said. “That will soon bring us up to producing 200 million pieces.”
In northern Thailand, located in an industrial estate amidst the lush rice fields of Lamphun province, the company launched a crafting facility in March 2017 after years of planning. Just 45 minutes away is Chiang Mai, Thailand’s second-largest city, boasting good infrastructure and an international airport.
Lars Nielsen, vice president and general manager of Lamphun’s Pandora facility who previously worked for Danish luxury jewelry brand Georg Jensen, said management was seeking to “spread the risk,” and also looked at Turkey, Russia, and even the U.S. before choosing Lamphun as the second manufacturing destination.
“Flooding is a big risk in central Thailand and it is almost nonexistent up here,” Nielsen said. “The political situation in Thailand was another issue, where we had two big groups. The yellow shirts and the red shirts — the yellow shirts are around Bangkok and the reds are up north, so we believed if there would be some problems at one point in time, it wouldn’t necessarily be in both places.”
The Lamphun facility — which has been accredited with the Gold certification in LEED, or Leadership in Energy and Environmental Design, widely used as a green building rating system around the world — is surrounded by green space and features a large pond in its center. Equipped with 91,500 square feet of solar panels, Pandora is able to generate 18 percent of its own electricity. Its green water features and recycling processes within the production line also mean that they have reduced water consumption by 45 percent, compared to an average factory.
Designed to mimic its best-selling item, the facility’s defining landmark is the pond, which acts as a bracelet, while the surrounding buildings — cafeteria, administration building, production facilities, etc. — mimic the charms. The overall sense one gets when visiting during lunchtime is its resemblance to a college, instead of a high-capacity factory that employs more than 3,300 people and produces up to 650,000 pieces a week.
Nielsen said the goal is to reduce lead times from eight weeks to four weeks, despite the fact that consumer demands may change according to fashion and jewelry trends. Unlike its Bangkok counterpart, where the majority of its production is in charms, much of Lamphun’s production is focused on rings and earrings.
Pandora’s Bangkok facilities are working on reducing lead times as well, as the brand has decided that instead of introducing seven jewelry collections this year, they will aim to produce 10 new lines using innovative jewelry-making techniques, said Patrick Bennett, vice president of technical development, research and innovation.
To do this, Pandora has an innovation center next to its new Triple A factory, which was launched in December. At the innovation center, Bennett said he and his team of craftsmen, metallurgists and engineers work to discover new technology and materials for Pandora, calling the center and its testing lab “the sandpit for being creative.”
“It’s not only innovating by bringing in different colors, but by innovating in different ways to give the consumer that different feeling and experience. The only way we can do it is by bringing new capabilities, new materials, new colors, new trends,” said Bennett, who has previously worked at a U.S.-based private jewelry manufacturer that produces for Harry Winston and Tiffany’s.
“Every single piece has been handcrafted and touched by an artisan, so it’s important to have the capacity balance between the level of skill, the tools, machine and equipment,” he said. “It’s a real balancing act. It’s a fine line between handcraftsmanship and the new technology.
Much of his work means that he is also thinking of ways to reduce and recycle waste throughout the production line.
“It is completely interlinked — to not just be great at omnichannel and be great at product, but it is also interlinked with sustainability and being lean and green,” Bennett explained, adding that this emphasis is something that has grown more important in the jewelry world in recent years. “Especially with Millennials, it’s something that has become very important. And I think as you look across different brands, it’s become very important, as the world is a changing place, and we have a responsibility.”
Human Rights Watch recently published a report in February, titled “The Hidden Cost of Jewelry,” where the New York-based rights organization examined the steps taken by 13 jewelry companies to ensure that their supply chains do not consist of abuses. Pandora — alongside Bulgari, Cartier and Signet — has been identified as “moderate” for having taken important steps toward responsible sourcing. (Out of the 13 companies that HRW reached out to, only Tiffany & Co. received a “strong” rating for taking significant steps. No company got an “excellent” rating.)
According to the report, all of Pandora’s diamonds were recycled from discontinued jewelry between 2012 to 2016, while 91 percent of its purchased gold in 2016 was recycled materials. New diamonds are also required to be compliant with the Kimberley Process and the World Diamond Council System of Warranties.
Its moderate rating is due to the fact that the company declined to reveal its suppliers and to what HRW claimed is an over-reliance on certifications from the Responsible Jewelry Council to identify abuses within the supply chain. (Researchers from HRW contend that an RJC certification does not guarantee responsible sourcing, citing previous instances of abuses in diamond and gold mines that supply to RJC members.)
In response to the HRW criticism, Mads Twomey-Madsen, Pandora’s director of communications, said the RJC’s chain-of-custody standards were recently revised this year under the chairmanship of Pandora. “The updated standard was launched early 2018 with new due-diligence requirements and substantial new sections — thereby aligning the standard with the OECD Due Diligence Guidance for respecting human rights,” Twomey-Madsen said.
Helander said the company’s evolution toward growth goes hand in hand with Pandora’s commitment to Thailand.
“The culture, the tradition for handicrafts, the pride of Thailand — those are things we want customers to think of when it says ‘Made in Thailand.’ It is also ethically made,” Helander said. “With Pandora, our customers can feel very safe that it was made with full respect and that everything was done right.”