RATNAPURA, Aug 25: Sri Lankan gem traders see riches, which formerly went to Thailand, flowing to them by transforming humble stones known as "geuda" into glittering sapphires.

For years Sri Lanka has exported huge quantities of rough geuda stones to Thailand, where they are heat-treated, cut and polished and sold as sapphires around the world.

The transformation into sapphires, which otherwise takes years, can be quickened by heat treatment.

But a lack of technology, research and a market-oriented programme to add value to the stone had forced the Sri Lankan traders to export to Thailand.Gone are the days when geuda was thrown away as waste since nobody knew what to do with it.

Today, more and more Sri Lankan gems traders are treating raw stones locally with help from the National Gem and Jewellery Authority (NGJA), which is providing cheap technology and a centralised marketing arm to help sell the stones.

Traders are also making more money than they ever did.

"Fifteen years ago nobody was willing to attempt geuda treatment in Sri Lanka, but now nearly twenty percent of dealers are taking on this task themselves," said Ari Dissanayake, a gems dealer in Ratnapura, called "Gem City".

"They are earning over 2,000 rupees a carat as opposed to some 50 rupees for the rough quality. We earlier used to feel that this (rough form of export) was the simplest way to sell our produce to the Thai dealers," he said.

"The bulk of Sri Lanka's current 463 million rupee ($7.9million) geuda exports are of the rough form to Thai dealers, who thereafter heat-treat, cut and polish the gems to make profits," Tom Ellawela, chairman of NGJA, told Reuters.

"We can earn a further one billion rupees ($17 million) annually if we take on these tasks ourselves. We can absorb the near 100 per cent added value to Sri Lanka's foreign exchange earnings and create jobs in gem cutting, polishing and jewellery design and manufacturing industries," he added.

Ellawela said the NGJA's plans to introduce heat treatment facilities at Ratnapura would generally help the local economy as incomes would rise and new jobs would be created.

He said the NGJA wanted local dealers to heat treat the geudas themselves to add colour and enhance the quality and value of the gem. The authority has been conducting workshops on heat treatment technology to increase dealer awareness of its potential benefits to the industry.

The organisation has also funded intensive research on geuda heat treatment that has led to the manufacture of a local brand of treating machine, which is now being increasingly used by the industry.

"We are now aware of the enormous price differential afforded to the Thai dealer by handing over value generating tasks to them and are now very keen to take them on ourselves," Karunapala Walpitagama, another gem dealer, said.He said if Sri Lanka adopted a business-like approach to the industry, it would create many jobs.

"Thailand currently has around 800,000 cutters but 25 per cent of their gems come from Sri Lanka. We currently have only around 15,000 cutters which just shows the room for expansion."

The NGJA has opened a new Gem Centre in Ratnapura, 80 km (50 miles) southeast of the capital Colombo, where it has also launched gem cutting, polishing and jewellery design classes.

The centre also provides heat treatment services to dealers of the area and houses research laboratories for verifying and grading gems.

A new museum of gems displays the products of Ratnapura traders.

"We want this centre to be the focal point of our drive to make Ratnapura the gem development centre of the area. No longer will dealers have to congregate at the town clock tower. The foreign trader can come and view the products at our museum and make his choice," Ellawela said.

"The centre will steer a technology drive which will see us in control of the industry within the next four years," Ellawela added.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.