RAPAPORT... Very often with different types of problems, we find the same solution. I call it free fair markets. It’s really the American way. It’s likeeconomic democratization. Essentially that’s the force that we’re going to be dealing with today,” explained Martin Rapaport, chairman of the Rapaport Group. Approximately 400 diamond dealers, retailers, jewelry manufacturers and trade association representatives were gathered before him in the grand ballroom of the Waldorf-Astoria hotel in New York City for the annual Rapaport International Diamond Conference on September 8.
Rapaport went on to say that a main reason for the conference was to gain an understanding of the global economy and how it will impact the industry. A big part of that involved delving into the idea that the industry is changing fundamentally and for the long term.
“It’s really serious stuff. Some people think ‘Everything’s okay. Don’t worry. It’s just going to pass over and it’s going to be alright.’ I think one of the messages of this conference is that’s not the case. There is a major sea change in everything that’s going on in the world,” stated Rapaport.
Rapaport made a point of recognizing all aspects of the diamond industry.
“There are artisanal diggers who are literally on the verge of starvation and they’re also part of our industry. They’re not in the Waldorf-Astoria ballroom today, but they are as much a part of the industry as I am and you are.”
In keeping with that spirit, the conference raised money for the Fair Trade Diamond and Jewelry Association and Jewelers for Children (JFC). A portion of the event’s proceeds went to the charities, along with $8,000 donated by Olympic Diamond, the official luncheon sponsor, which was given directly to the Fair Trade Diamond and Jewelry Association to help foster fair trade practices in Sierra Leone.
Martin Rapaport, Rapaport GroupFuture of the Diamond IndustryYou can’t just keep doing business the same way. If you get nothing else from me, get that. You have to manage your change through strategic development. Your future exists between your ears. It’s not in your showcase,” declared Martin Rapaport, chairman of the Rapaport Group.
Rapaport went on to explain that the diamond industry does not control demand or prices. “The day we get to control the dollar, interest rates and inflation is the day we can control the diamond market and diamond prices.”
Seeing wild price swings ahead, Rapaport pointed out that “The 5-carat D flawless at this point in time is actually outperforming oil. That’s scary. Everything corrects. Could we handle a correction? They complained when I went up 20 percent. What happens when I go down 20 percent? It will happen. If things go up, they come down.”
Right now, the economy is being kept alive with low interest rates, according to Rapaport. But the life support can’t go on indefinitely. “If we get long, sustained, negative interest rates, you will see diamond prices go to hundreds of thousands of dollars per carat,” he predicted.
The only thing worse, Rapaport said, would be if the Federal Reserve raised the rates in response to inflation. At double-digit interest rates, banks “will own your inventory in months, if not weeks,” he warned. Rapaport remembers the 1970s all too well, when similar economic conditions were in play.
But Rapaport sees this uncertainty as an opportunity, because small businesses hold the advantage in unsteady times. “As long as everything is nice and normal, the profits go to the big companies. But when things get screwy and messy, then flexibility starts to become important,” he observed.
Rapaport then shared an analysis of global wealth from the Merrill Lynch World Wealth Report 2008.
• 10.1 million millionaires worldwide, up 6 percent — in India, up 22.7 percent.
• Their total worth = $40.7 trillion.
• They will spend 2 percent of their net worth on luxury = $850 billion
• They will spend 14 percent of this total luxury allocation on jewelry = $120 billion
“That luxury sector is there and it is going to be something that’s very powerful. It’s going to make people want to be part of that world,” Rapaport forecasted. He identified the key submarkets where growth is picking up, referring to demographics that show which countries are set for an explosion in diamond consumers.
Country Percent of Population under 25 in 2007
U.S. 35 percent
India 54 percent
China 39 percent
Japan 21 percent
Europe 29 percent
UAE 42 percent
Ultimately, Rapaport believes that the solution to skyrocketing demand and rapid price movements is market transparency. He concluded that the diamond markets of the future will regain historic ground as they integrate luxury and investment demand into products that provide social prestige and financial security.
“They’re getting a luxury product that’s not like a Mercedes-Benz that goes down in value every year, but has a real store in value potential in a screwed-up world. We’ll hit a home run. And I think that’s going to happen. Because, with the way things are going, people are going to want these things.”
Rajiv Mehta,Dimexon International Holding, Eurostar DiamondsThe Cutting Edge: Diamonds in a New Global Economy
Ladies and gentlemen, the world is changing. If we continue to live in history, we will be condemned to be part of history,” Rajiv Mehta, the chief executive officer (CEO) of Dimexon International Holding and the executive director of Eurostar Diamonds, declared. He opened the morning session by comparing 2007 to 2008, illustrating the recent dramatic changes in the world economy.
2007 2008
• Euphoria • Trepidation
• Robust economic growth • Economic slowdown
• Booming markets • Busted market valuations
• Low single-digit inflation • More than half the world is experiencing
double digit inflation
• Focused on growth path • Need to redefine our path
“Going forward, the consolidation of the diamond supply chain is inevitable and it is the diamond processing segment that will feel the maximum impact,” Mehta predicted. He sees a future where processors race to add value without compromising quality. But he was quick to add that mining and retail will feel the pinch, as well.“The reality is that costs are set to rise,” Mehta conceded.
With rough supply expected to remain flat through 2016 while demand soars, “The increase in rough prices is likely to continue irrespective of whether existing players in the industry can absorb it or not,” Mehta warned. Mehta believes that changes in the mining industry will be driven by conditions on the macro level, beyond any individual mining company’s control. He pointed to new technology as a “key investment” that will help offset cost increases. He contrasted mining with processing, jewelry manufacturing and retail, where he thinks individual companies will have more freedom to determine their success or failure through their own initiatives in the years ahead.
Citing a 2006 report by KPMG, Mehta stated that close to 10 percent of the world’s rough diamonds by value will be polished in Africa by 2015 due to beneficiation. Companies that make plans to support local beneficiation could be well positioned to profit from this shift.
Mehta noted few barriers for new diamond-processing firms. “To ensure sustainable growth, every company in the sector will need to take a long, hard look at its operations and come up with strategies that capitalize on their
current strengths,” he instructed.
As India, China and the Middle East gear up to capture one-third of global consumption, understanding a diverse consumer base has become critical, Mehta stressed. Retail in India and China will grow as the countries develop and the sector will need to become more sophisticated. Mehta recommended more intensive jewelry promotion and a stronger emphasis on branding as first steps.
The right growth strategy for the future in many ways depends on the size of the company, Mehta said. Large-scale firms should buckle down on compliance, quality and efficiency to cut costs. Niche players should focus on their unique vision and competitive advantages while fostering innovation. “While this may sound simple, it isn’t,” he recognized.
Mehta advised everyone to prepare for a rainy day. “Current trends indicate that planning with a slowdown or a recession in mind will serve businesses well since it will help them deal more effectively with the highly competitive market, where rising costs exist along with slowing demand.”
In closing, Mehta challenged his audience. “It is a well-known fact that a diamond is forever. Can we find ways to ensure that our businesses are built that way, too?”
Rahul Kadakia, Christie’s America
What’s Behind the Big Stone Boom?Rahul Kadakia, head of jewelry, Christie’s Americas, began his presentation with a little auction history. “Not so long ago,” he said, “in 1998 in May, we sold a circular D flawless diamond of 12.99 carats for $705,000. At $54,000 per carat, it was a big deal back then. We would have done a separate press release. Martin would have done a special shot in RDR. We were all so excited and thought it was the most beautiful time in the diamond market. Then in May of this year, a 12.15-carat D flawless sold for $198,000 per carat. And it was just another stone in the sale.”
Some more examples of soaring big-stone prices at Christie’s:
• A 21.21-carat DIF sold for $44,000 per carat in
October 2001.The same stone sold for $88,000 per
carat in December 2006.
• A 60-carat D flawless pear sold for $67,000 per carat
in November 2000. A 53-carat D flawless pear sold
for $107,000 per carat in December 2007.
“People ask me ‘What do you think about diamonds? Are they a good investment?’ And I think I really don’t know the answer when I see all that is going on here. The only thing I tell them is it’s a great investment if you receive them for free,” Kadakia quipped.
According to Kadakia, consumers’ increasing knowledge of diamonds is part of the equation. Members of the trade always understood the rarity of diamonds and the work that goes into manufacturing a jewel. “There has not always been the same appreciation on the consumer side, which is what changed the prices for us,” Kadakia reported.
Another factor is the movement of wealth from the U.S. and Europe to places like India, China, Russia and the Middle East. “Purchasing diamonds, gemstones and jewelry is in the cultural fabric of these countries,” Kadakia observed.
Auction house clientele are now buying jewelry and gemstones as art, which raises their value as well, Kadakia pointed out. “Yes, it is a commodity in terms of money and we talk about it as an investment. But at the end of the day, there is so much more romance and so much more history associated with a gemstone that one cannot have with oil or metal. This is what people
forgot for a while,” he contended.
Kadakia stated that large diamonds have been undervalued for a long time and now they’ve finally settled at their true price levels. He believes that speculation is more difficult in the larger diamond market because so many mitigating factors — such as cut, color and history — strongly influence individual purchase decisions.
When Kadakia received a request for a 50-carat diamond in the year 2000, he would have five to six stones for his client to choose from within a week. Today, he said, he has been getting “very, very steady, consistent calls” and it takes a week to ten days to find one or two diamonds “because the stones are either busy, or they’re sold or they’re not available at a price that makes sense, because this is where the market is.”
Kadakia offered one final testimonial regarding the demand he’s been seeing. “I may not be able to sell a 50-carat D flawless for $220,000 per carat, but for $185,000 per carat, I have five customers all day long,” he declared.
Victor Van der Kwast, ABN AMRO BankBanking and Finance: With all Moving Parts,
Where is the Money?
If you are not thinking about it before you enter into a scenario, it is too late. You are reacting and you are going to suffer,” counseled Victor van der Kwast, the chief executive officer (CEO) of the International Diamond and Jewelry Group at ABN AMRO. The head of one of the largest diamond banks in the world,
van der Kwast wants everyone in the diamond industry to understand basic financial market dynamics.
He stressed that recent diamond price increases have a cause some may not fully comprehend. “It’s not only inflation, it’s not only uncertainty, it’s also because the dollar went down,” he contended. There is a correlation between currencies and commodity prices, says van der Kwast.
When the euro rises and the U.S. dollar drops:
• Liquidity and stock prices fall,
• Commodity prices rise,
• Oil prices rise and
• Diamond prices rise.
Conversely, when the U.S. dollar rises above the euro:
• Liquidity and stock prices rise,
• Commodity prices fall,
• Oil prices fall and
• Diamond prices fall.
Van der Kwast observed that today’s market is moving faster than ever. “In my career in banking, I’ve been a trader, I’ve been an asset manager, I’ve been a currency trader and I can tell you that I’ve seen a lot of market movements. It’s quite different now. It really has an impact on everyone across the industry. If you look at stock prices, they’re dropping by 30 to 70 percent. If you look at real estate, we used to think the sky was the limit.” In an especially prescient comment, he remarked, “If you look at bank debt, you see Lehman Brothers under attack, you see Bear Sterns under attack, you see a company like Fortis in deep trouble. All these things are happening in just a couple of months. In the past, it would take years.”
Pointing out that capital is very scarce, van der Kwast acknowledged “the credit crunch has come.” With bank insolvencies and write-offs rising at “staggering” rates, he warned that banks will be extremely cautious in their lending.
Van der Kwast hopes these harsh realities will spur the industry to be proactive. He urged stakeholders to evaluate their business plans “because I see that people are
producing just for the sake of producing, keeping the factory going or selling to a market that just isn’t there any more. Then you get into a situation where you get shorter and shorter on the balance sheet.”
Although van der Kwast stated that America’s stake in worldwide diamond jewelry will shrink, from his point of view, there is still plenty of value in the marketplace. He believes players should concentrate on the following.
• Southern Africa, United Arab Emirates (UAE), China
and Russia are developing fast. “They are a force to be
reckoned with,” van der Kwast said.
• Access to rough supply is increasingly important. “You
should think about strategic partnerships.”
• Companies need to manage their own stocks to avoid
trouble. “Just sitting on it and rolling it over is costly.”
• Develop distinct brand positioning and specific
distribution approaches.
• Size and market share will be important for some, but
profitability is more important.
• There will be opportunities for growth through
acquisition and consolidation.
Van der Kwast recommended investing in branded jewelry — both brick-and-mortar stores and online — and luxury segments aimed at women, younger audiences and other cultures. “Every disaster is an opportunity as long as you prepare,” he proclaimed.
Gerald Celente, Trends Research Institute
Future of the World EconomyWe’re forecasting a U.S. depression and a depression and recession of varying degrees around the world,” was the startling prognosis from Gerald
Celente, the founder and director of the Trends Research Institute. Celente pointed out that he’s been right before. In winter 2004, his company’s The Trends Journal forecasted that the real estate market would “lose sizzle” and the publication saw the dot-com bust brewing as early as October 1999.
Celente stressed an unbiased approach. “We study major social, economic and political events going on around the world each day and assess them. We just give a diagnosis. I’m a political atheist.” Speaking before the major U.S. market meltdown, he provided a roster of grim economic news
headlines to support his prediction.
• “Asia Stocks Fall for Fifth Day on Growth Concerns”
• “Borrowing Weakens Europe’s Hot Companies as Recession Looms”
• “Payrolls in U.S. Fall More than Forecast”
• “U.S. Mortgage Foreclosures Reach Record High”
• “Construction Spending Took a Bigger-Than-Expected Tumble in July”
Dubbing the nation’s subprime problem “the cracks at the bottom of the foundation,” Celente rang the alarm bells for an impending commercial lending crisis. Recent bankruptcies at Linens-N-Things, The Sharper Image, Steve & Barry’s, and Bennigan’s are just the beginning, he claimed. Macy’s, Starbucks and Home Depot recently announced they would shut down some underperforming locations. “Start looking for ghost malls,” he remarked.
A commercial meltdown will bring down leveraged buyout giants like the Carlyle Group and the Blackstone Group, contended Celente. “They paid billions based upon expected growth. Who’s going to bail out these too-big-to-fail guys?” Celente asked.
Warning of “an economic 9/11,” Celente listed five reasons why this new U.S. depression will be worse than the Great Depression of the 1930s.
In that depression:
• There was no such thing as a home equity loan.
• There was no such thing as credit cards, so consumers
weren’t carrying $2.6 trillion in debt.
• The U.S. didn’t have a trade imbalance.
• The U.S. wasn’t fighting two costly wars.
• The U.S. had a manufacturing base.
Celente urged the diamond industry to ready itself. “Are you prepared for the worst? Do you have strategies in place? What will you do if they call a bank holiday?” But there was advice on how to weather the storm, as well. Diamonds can be considered a safe haven in times of economic turmoil and now is the time to position diamonds as a wise gift, Celente instructed. He categorized it as “an investment that shows not only did you care about the person, but you made a smart decision. You didn’t buy something that’s going to be worthless. Regardless of where the prices go on the short term, it’s going to have value.”
Displaying photos from Hollywood’s Golden Age, Celente contrasted them to the pop stars of today, calling for a return to glamour. “Sell style and grace to the modern men and women from China, Russia, India, the Arab countries and other growing nations that are moving toward the middle class.”
Celente proclaimed his faith in the people of the diamond industry. “You have the skills, the know-how and the intelligence to turn it around. You create the future. The future doesn’t happen in a vacuum. Of all people, I know you have the intellectual power and the marketing means to chart the course and to change the course.”
Ralph Destino, GIA
Branding: The Art of Value CreationWe were as focused on the building and polishing of the brands as we were on the sales and profitability of our division,” stated Ralph Destino, a 32-year veteran of Cartier and the current chairman of the Gemological Institute of America (GIA). He was recalling management’s business strategy at Cartier and the Richemont Group.
“While we recognized that a hot new product might well contribute to some good-looking sales numbers… it was brand enhancement that made long-term leadership and preeminence.”
Destino defines a brand as “a promise to a consumer at
the retail level.” While De Beers has successfully branded
not only the value of diamonds but also their emotional
components, Destino remarked that this does little to help any individual entity in the trade to brand its own products.
Destino went on to state his general rule that branding is not meaningful at the level of loose stones. He recognized that Hearts on Fire did a great job on branding their stones, but Destino believes that company is the rare exception that proves the rule. “I can’t say this strongly enough. If you’re not prepared to invest heavily for a very long time, don’t go down that path. You’re going to spend a lot of money along that road for very little yield at the end.”
Developing a new cut and giving it a name is fine, but Destino contends this has little or nothing to do with branding. “Let me say it flat out. I wouldn’t spend a dime trying to brand a loose stone. But I sure would spend plenty to brand a company and its finished products. Corporate branding — now that makes sense.”
“Branding is not simply about becoming famous,” Destino clarified. “It’s about becoming famous for something.” He singled out Stuller as an example of a firm that has marketed wisely, pledging to address its customers’ needs and exceeding its customers’ expectations. Destino then told his audience about two companies, both in the widget business. They offered essentially the same widget.
Company B• Sold the product for 10 percent less.
Company AIf that were the end of the story, company B would dominate the market. However, Company A’s president wrote a book on widgets and its executives lectured on widgets at all the widget conferences and conventions.
Company A also:
• Collected antique widgets and loaned them for
exhibition.
• Published a newsletter about widgets in six languages.
• Focused advertising on the virtues of widgets, with the
company name barely visible at the bottom of the ad.
• Trained its customers in the best way to use widgets.
• Assembled a customer service team that was friendly
and attentive, always ready to help.
• Was never out of stock on widgets.
• Shipped every widget within 24 hours.
Company A successfully branded itself as the world leader in the widget business. The company improved its margins, earned customer loyalty and left company B so far behind as to be a very distant second. Destino quoted Jeff Bezos, the chief executive officer (CEO) of Amazon.com, who once said that his company is not in the book business, but in the customer service business. Destino asked the room, “Ladies and gentlemen, in many ways, aren’t we all in that same business?”
Neal Goldberg, Zale Corporation
Relevant Retailing: Transcending ProductI don’t care what part of the supply chain you are in, you’ve got to know your customer. You can go to a lot of conferences, you can read a lot, but if you don’t know your customer, I don’t see how you can be successful,” opened Neal Goldberg, the chief executive officer (CEO) of Zale Corporation. Goldberg came to Zale in December 2007 with a retail background spanning time at Macy’s, Gap and Victoria’s Secret, but no prior jewelry experience.
When Goldberg was approached to come to Zale, he said, “I walked malls and stores throughout the country as I was thinking about whether I wanted to take this opportunity.” Goldberg reported his initial observations about jewelry stores in the “value sector.”
• Industry competed on price. “I saw a sea of sameness,”he remarked.
• Shopping experience was confusing. “What I saw was30 percent off plus 50 percent off if you buy it on Tuesday and if it includes these brands and if you jump up and down on one leg.”
• Poor quality. “To me, that’s the death spiral. The product was not that important. It was about price.”
• Inefficient organizational structure. “We were structured where the merchants were supposed to be expert at every part of the business. We’ve now divided out the organization into sourcing and merchants.”
• Not valuing the field organization. “Instead of me telling them what to do, I’d much rather have them tell me what to do. We’re their service. Certainly for the last 20 or 30 years, the corporation did not respect thefield organization.”
• Marketing didn’t cut through. “I saw pages and pages of Journey. I didn’t feel any emotion in that. I didn’t feel any relevance. I certainly didn’t feel any love.”
Then Goldberg turned to the future. He laid out what he sees as areas for the Zale Corporation and the jewelry industry as a whole to improve going forward.
• Understanding your core customer. “Put the customer on a pedestal and listen,” Goldberg advised.
• New and distinctive product. “Someone once told me that if the product is right, everything else matters. If the product is wrong, nothing else matters.” Goldberg estimated that about 10 percent of Zale’s inventory will now be relevant fashion items.
• Branding. “Simplify and elevate the emotion in marketing,” he stressed.
• People. “Successful brands have associates and customers as advocates of the brand,” he contended.
Goldberg closed by playing a video about the Richards Group’s development of Zales’ new“Love Rocks” campaign, which kicked off during Mother’s Day 2008 with the “Mom Rocks” commercial. True to Zales’ goal to “elevate the emotion,” the advertisement depicted a variety of touching scenes with people saying the word “mom.” A brief product shot at the end was accompanied by the words “Mom Rocks.” Chris Smith, creative director of the Richards Group, stated that the campaign will broaden, with more commercials over the holidays in print, radio and broadcast. Goldberg summed it up when he said, “It’s not just about price and it’s not just about the product. It’s the whole experience.”
Mark Moeller, American Gem Society, R.F. Moeller
Are Bread-and-Butter Diamonds Toast?From the independent jeweler’s point of view, our business is spectacular,” announced Mark Moeller, the president of the American Gem Society (AGS) and chief executive officer (CEO) of R.F. Moeller in Minnesota. “Are diamonds finished?
Yes, if you think diamonds are a commodity and you compete only on price,” he said. In a recent Google search, Moeller found that the phrase “loose diamonds” got him 4,470,000 results. The phrase “low-priced diamonds” called up 4,240,000 web pages. His tongue-in-cheek conclusion was that “94.8 percent of the diamonds online are cheap.”
Moeller says diamonds are toast if you:
• Don’t have a unique selling proposition.
• Sell a brand that has no brand promise.
• Don’t differentiate yourself from the competition.
Moeller says diamonds are not toast if you:
• Educate your clients to understand value. “You have to educate them on what the best is,” Moeller clarified.
• Are more expensive than your competitor. “It has to be unique. Raise your hand in this room if you don’t want to buy the best,” he challenged.
• Provide service that your clients find extraordinary. “My salespeople must sell themselves and the store before they show any product.”
• Offer a unique selling proposition that connects with your client.
• Sell diamonds with a story.
Branded merchandise is R.F. Moeller’s sustenance, making up 82 percent of the store’s sales and generating 42.7 percent of the selling price as profit. In contrast, generic sales are only 18 percent of total sales and profits represent only 27.4 percent of the selling price.
Moeller spelled out a survival strategy for the independent jeweler, noting that “it takes years to create that interest and you can’t lose sight of that.”
• Build strong strategic alliances. “It has to be win-win. We cut our vendor list from over 100 to about 26 because I want to be more important to fewer people,” Moeller reported.
• Own your inventory. “You have a whole different perspective on what happens. My inventory is going to increase in value. In terms of the bread-and-butter stuff, you need to own it,” he declared.
• Differentiate. “You need to differentiate what you are selling from the competition in such a powerful way that buying from anyone else would strike your prospect as dumb.”
During the discussion period following his presentation, Moeller was asked by a member of the audience how he maintains his margins while offering his money-back guarantee. Moeller replied, “The number of diamonds that I get back for trade in, trade up, whatever it might be, are miniscule. The margin isn’t a problem. It isn’t like there’s such a thing as a used diamond…. I’m willing to stand behind my product forever. I will give the money back on a short-term basis. Usually we say 30 days, but pretty much we’re liberal and will go up to six months. Beyond that, it’s store credit up against anything else in the store. The fact is, the goodwill I instill and the way it differentiates us from the competition makes it worthwhile. My competitors are scared to death of my guarantee, so they don’t offer it. When I tell the client, ‘Try to get that guarantee from my competitor. He’s going to sell it $500 cheaper,’ the client always chooses me. The cheaper price means nothing.”
Dr. James E. Shigley, GIA
Diamond as Gemstone: Current Evolutions and Future RevolutionsYou should realize that there are evolutions and revolutions going on right now in many areas,” declared James Shigley, PhD, distinguished research fellow of the Gemological Institute of America (GIA). He asserted that diamond research and identification face many challenges.
It takes approximately one week to grow a 1- to 2-carat synthetic diamond crystal using High Pressure-High Temperature (HPHT) techniques, commented Shigley. “Most of what we see are, in fact, yellow colors,” he said, but treatment processes can produce a range of colors. As cut stones, these synthetics are typically ½ to 1½ carats. Appearance under magnification, UV fluorescence reactions, chemical analysis and spectroscopy techniques provide “very clear identification,” according to Shigley. Shigley illustrated how he estimates current HPHT synthetic diamond production.
If there are 100 HPHT presses in the world:• It takes about one week to grow a 1- to 2-carat crystal.
• Optimistically, you have 50 growth runs per year.
• That creates about 5,000 crystals or
• Approximately 10,000 to 15,000 carats per year.
However, if there are 500 presses in the world:• That creates about 25,000 crystals or
• Approximately 50,000 to 75,000 carats per year.
“I happen to think that 500 presses is probably a little more accurate today,” Shigley contended. He stressed that this level of production is still very small compared to the annual production of natural gem diamonds.Shigley pointed out that treating natural diamonds takes about ten minutes. He called natural diamonds treated with HPHT techniques “a serious challenge,” because this may be more attractive to press owners than the more labor- and cost-intensive process of synthetic diamond creation.
In the past few years, chemical vapor deposition (CVD) gemstones have entered the market. Growth takes longer, a period of several weeks, but because it uses high temperature with low pressure, it is much less expensive. “They are trying to achieve a tenfold improvement in the growth rate,” Shigley observed.“You need to forget everything about identification” when it comes to CVD, Shigley cautioned. He named the Apollo company in Boston as the only manufacturer he knows that sells CVD material.
“CVD diamonds can be identified in the laboratory setting, but I believe that these are going to be difficult to identify for people in the jewelry trade. However, they are type IIa diamonds and there are instruments out there for recognizing type IIa diamonds,” Shigley noted. The vast majority of natural diamonds are type Ia.
Shigley closed with his forecast for the future of diamonds. In the coming years, he believes we will see:
• The use of diamonds in many other industries.
• Improvements in the quality and size of synthetic diamonds.
• The possibility of synthetic growth under more natural conditions.
• New synthesis methods, possibly with a decrease in cost and an increase in volume.
• Diamond coatings on diamonds to change their color.
• Improved identifications and markings.
• Cubic zirconias with colorless diamond coatings.
• Expanded use of multiple color treatments.
• Possibly healing cleavages or pinpoints by some new method.
• Possibly removing nitrogen from a diamond to make it less yellow.
• New treatments.
Article from the Rapaport Magazine - October 2008. To subscribe click here.