Firm Shows Its Mettle in Jewelry Market : Japan: Kuwayama Corp. factory in Uozu village is No. 1 producer of platinum and No. 2 of gold finery.

Nestled in a small fishing village along the Japan Sea coast is a jewelry factory with enough dazzle to rock precious metal markets from Zurich to New York.

Mention Kuwayama Corp. to a couple shopping for an engagement ring and you are likely to get a blank stare.

But the Kuwayama factory, surrounded by snow-covered mountains and paddy fields in tiny Uozu village in central Japan, is a household name in the precious metal industry.

“The merit of having a factory in Uozu is that the workers are diligent and honest,” Yukihiro Kuwayama, company president and a native of the village, said in an interview.

“Hardly any money is spent on security,” he added.

Considering that Kuwayama’s factory is the world’s largest jewelry maker in platinum and the second-largest in gold, security around the factory is surprisingly relaxed.

A lone, elderly guard stands at the factory gates and inside, light wooden doors are placed where heavy locked steel doors would normally be.

None of the 300 employees needs to go through metal detectors when he or she enters or leave the factory, something that is a matter of course in jewelry factories in the West.

“Those small-town ways of checking up on neighbors and quickly spreading local gossip turned out to be just the right thing for a jewelry factory,” Kuwayama said.

“We have not once had to use a metal detector on a factory worker,” he said.

Platinum consumption at the Toyama prefecture factory was 3.7 metric tons in fiscal 1994-95, up from 3.4 tons the previous year, making it the world’s top platinum jewelry maker.

It used 12.6 tons of gold in fiscal 1994-95 against 13.6 tons a year ago, making it the world’s second-largest gold jewelry maker.

Japan is the world’s biggest consumer of platinum, accounting for roughly half the global demand for the metal.

Total Japanese demand in calendar 1994 was estimated at 64.4 tons, and of that, jewelry production accounted for 45 tons, up from 42 tons in 1993.

Kuwayama sees platinum jewelry demand continuing to grow this year, rising by about three tons from 1994 levels.

“The subdued glow of platinum matches the Japanese aesthetic values of reserve,” he said.

Kuwayama started his jewelry company in 1964, making gold chains at a time when gold was still a government-controlled commodity and supplies were sparsely rationed.

“Rations went to jewelry unions, so many unions were created just for the sake of gathering gold,” Kuwayama said.

Jewelry-making was still considered an art of craftsmanship in those days, and labor costs made items expensive and out of the reach of ordinary people.

Anticipating the liberalization of Japan’s gold trade, Kuwayama sought methods to automate and mass produce quality chains to transform a luxury into an affordable accessory.

In 1973, Kuwayama’s business got its first big boost when the gold trade was liberalized and sales of his chains soared.

He has not looked back since.

The factory has fully embraced automation, with machines imported from Italy churning out endless glittering chains of platinum and gold. Offshore factories have been set up in the United States and China.

In March, the big factory in a small town will become the first of its kind to be listed over the counter.

“The company has grown and developed much faster than I had ever imagined 30 years back,” Kuwayama said.