14 Aug 2020
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Make Hay While the “Diamond” Shines
Can lab-grown diamonds help the industry?
By: Diamond World News Service
Jan 9 2020 12:40PM
Reference: 24685  

Ankit Mehta, H.Dipak
Ankit Mehta, H.Dipak
While the tug-of-war between natural and lab-grown diamond industries is ongoing, the fact that there is a definitive market for the latter is undisputable. The growing number of natural diamond players wanting a taste of the lab-grown diamond business is evidence enough. Instead of looking at lab-grown diamonds as a threat, if the industry can view it as a just-anothervariant that can be sold to a different target audience, may be this industry could strike gold, says Vijetha Rangabashyam

The diamond industry is witnessing a pattern. While De Beers is cutting its diamond output and major suppliers are reducing the supply and lowering prices, what with all the uncertainty in India and China and a weak demand from the U.S., it is apparent that the industry is looking at an alternative option to make profits. Over the last two years, we’ve been surprised by moves taken by some of the biggest entities in the natural diamond industry. The giveaway though was when De Beers decided to launch Lightbox Jewelry – you had to know that this was just the beginning. Lightbox which was only sold online and at occasional pop-ups is now available at Bloomingdale’s department stores and Reeds Jewelers on a trial basis to understand the market and whether or not there is demand for lab-grown diamonds from the consumers. People who have been peeved and worried about the rising popularity of lab grown diamonds are themselves seeing a huge market potential in this product. The pattern of looking at “grown” diamonds, as most players in this space like to call it, not as a disruptor but a variant that has a promising future cannot be ignored. Just this month, diamond tycoon Dilip Mehta from emeritus of Rosy Blue Alliance, an Indian Belgian company, announced his family’s foray into the labgrown business. While a handful of them have “come out” so to speak about their lab-grown entities, a lot of them are staying under the radar for fear of getting an unsavoury reputation.

In October, at Bharat Diamond Week, Anoop Mehta, President of Bharat Diamond Bourse (BDB), suggested that the bourse might allow lab grown diamonds in the premises, considering the steep increase in demand and enquiries from the members of the bourse. A Natural Diamond Monitoring Committee has been formed to frame a few guidelines, which will take 2-3 months to be enforced. In April this year, Guangzhou Diamond Exchange signed a strategic agreement with the major lab-grown diamond players in China to market lab-grown diamonds in light of China’s volatile market and to make the supply of lab-grown diamonds more consistent. Right around the same time, GIA upgraded its lab-grown diamonds report to suit the guidelines laid out by the FTC regarding the nomenclature and terminology of labgrown diamond. The authorities of the natural diamond industry embracing reality and becoming more inclusive are not something we can ignore.

Retailers in the U.S., one of the biggest consumers of lab-grown diamonds today, are product as consumers are lab-grown diamonds. J.C. Penny, Macy’s and more recently Signet are now selling lab-grown diamonds at their stores – Signet has been selling lab-grown diamonds as bridal and fashion jewellery at Kay, Zales and James Allen. Signet owned e-tailer James Allen introduced labgrown diamond jewellery as part of its inventory to test waters – stakeholders in the diamond industry wanting a piece of both the markets has been fairly evident.

Virtual Diamond Boutique (VDB), the sourcing and trading app for the jewellery industry included lab-grown products category on its platform this year. “This may be viewed as a controversial move by some in the jewellery industry. But we didn’t do it to be controversial. We made the decision to offer lab-grown because so many retailers are offering this product category to an increasingly interested consumer. And we want to help our customer base make thoughtful, informed decisions about the products they offer. That’s what the VDB platform does best – it informs and facilitates a higher quality sourcing process,” said Tanya Nisguretsky, President of VDB at the time of the announcement.

Surat, Not Just a Diamond Hub

Almost 72 per cent of the world’s share of lab grown diamonds is manufactured in Surat, between 2014 and 2016 alone, 50 companies in Surat set up labs and began their trial sessions. Today, exports of lab-grown diamonds have grown by 100 per cent to Rs 1400 Cr (Fig: GJEPC April-September 2019). There are around 150 units producing labgrown diamonds in pockets of Surat like Mahidhapura, Katagram and Varachha. The question then arises, who these players are? The fact that diamantaires in Surat already have the wherewithal to produce lab-grown diamonds is obvious – the accessibility of the seed to manufacture lab-grown diamonds is easy and data published in a report by the Government of Gujarat reveals that Rs 338 million was spent on import of CVD reactors by Indian manufacturers between April to November 2015. The parent company of Surat based Unique Lab Grown Diamond was vested in real estate and diamond machinery. “Real estate took a big hit after demonitisation and we soon saw a good opportunity in lab-grown diamonds,” says Manish Patel, Director, Unique Lab Grown Diamond. Last year, the company submitted an intense pinkishorange 5.01 ct lab grown diamond to GIA’s New York facility for testing. In its report GIA said this kind of intense pink-orange colour is hard to come by even in natural diamonds, particularly in large sizes. Unique exports lab grown SURAT diamonds from 0.3 ct up to 5 ct to U.S., South East Asia, Australia, Canada, Dubai and many other countries.

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