Vishal Mehta, who has been the CEO of IIa Technologies Pte Ltd (Singapore) since July 2009, drives the company’s global growth plans and strategic planning focused on innovation. He, along with his team, created a commercially viable approach of growing diamonds; and believes that all future innovations in the industry will be led by technology.
Vishal comes from a family with a history in the gems and jewellery business, going back to four generations. He began his career at the age of 18 as a diamond cutter in Mumbai, India.
Besides becoming a Gemologist from Gemological Institute of America (GIA), Vishal also holds a Master’s in Business Administration in International Management from Thunderbird, School of Global Management.
In this interview with Rough&Polished, Vishal Mehta speaks about his company, its products and related issues.
To begin with, how and when did the idea of going into manufacturing ‘lab-grown’ diamonds come about, given that you come from a family which has been in the natural diamond and jewellery business for four generations now?
IIa Technologies was set up in 2005, when Dr D S Misra (Ex IIT Bombay, India) and Mrs Sonia Mehta (an established Dubai-based Gems & Jewelry businesswoman) realized that the future of diamonds was in growing them – since the mines were a finite source with depleting supply. It was Mrs. Mehta’s vision for Grown Diamonds that made her invest in a state-of-the-art greenhouse for growing diamonds in Singapore, coupled with the fact that Dr Misra was one of the few names in the science world whose diamond-related research was incontrovertible. They both understood the need to develop a sustainable, commercially viable diamond-growing process to truly explore the supermaterial like qualities of diamond.
I joined IIa Technologies in 2009, when the company was still in research mode. In fact, it was not until 2013 that IIa launched its commercial operations – because it was critical to get the diamond growing process right before thinking of selling grown diamonds. The brand name “IIa” was chosen because Type IIa diamonds are the purest grade of diamonds and are extremely rare in nature (just 2% of all diamonds in the world are Type IIa grade).
Can you tell us more about lab-grown diamonds and explain the technology being used in your company?
The journey in the last decade for IIa Technologies has been full of challenges and positive surprises. It is a matter of immense pride to have created a proprietary diamond growing process that remains unparalleled. We can commit consistent supply of grown diamonds, for use in various industries.
The simplest way to explain Diamond Growth is to keep the concept of a typical greenhouse in mind. The diamond growing process begins with diamond seeds (which are also diamonds grown from carbon) being placed inside a growth chamber. In this growth chamber, which is also known as the Diamond Greenhouse, a carbon-rich diamond-growing environment is conditioned and maintained for about 12-14 weeks. At the end of this period, diamond seeds have undergone natural crystallization — just as they do below the earth without any human intervention, resulting in a rough Type IIa diamond (pronounced 2a, also the name of our company).
Having spent more than a decade in R&D has enabled IIa Technologies to grow diamonds of various quality grades for various applications.
Numerous terms like CZs, moissanites, natural diamonds and now ‘lab-grown’ diamonds… can you explain how these lab-grown stones differ from mined stones? Does IIa Tech’s ‘processed end product’ differ from the likes of other players in this genre?
A grown diamond is simply put a genuine diamond. There’s no similarity between Grown Diamonds and artificial diamonds or non-diamond simulants or CZs.
It is a recognized fact within the diamond industry that genuine diamonds are either grown inside earth or in diamond greenhouses above ground. Both are 100% carbon and have identical physical, chemical and optical properties. Both have the same hardness, specific gravity, refractive index and dispersion; are polished using the same equipment and techniques; and have the same brilliance, sparkle, fire and scintillation. We suggest you have a look at the recently launched IGDA website , which summarizes the grown and mined diamond properties in a technically accurate manner.
We welcome the launch of International Grown Diamond Association (IGDA) that will be central in presenting a collective, technically correct (based on scientific facts) and a global platform to the emerging grown diamond industry and players alike.
IIa Tech (2a Tech) is looked at as one of the largest lab-grown diamond manufacturer in the world. In terms of production, can we have an approximate annual production volume? What sizes of stones are produced today; and what is the biggest size that has been produced till date? Who do you cater to more, the industrial sector or the luxury jewellery sector? What would be the percentage in terms of volume in both these fields?
IIa Technologies grew around 350,000 carats of diamonds in 2015. The largest diamond that we have produced was a 3.04 carat diamond. Our target market is in the sweet spot of an average 1 carat based on what the market demands. The gems and jewellery industry is an important focus point and we believe that consistent and dependable supply will be the hallmark for the grown diamond industry.
Can you give us an idea of how big the global lab-grown diamond manufacturing industry is at present? How many and where in the world are these players established? Collectively, of the total global market for diamonds, what percentage are lab-grown diamonds at present? And how do you see the future panning out for this product?
A 2014 Frost & Sullivan analysis claims that global Grown Diamond production reached approximately 360,000 carats in 2014 and in next 3 years, it’s estimated to touch around 2 million carats. Grown Diamonds are an emerging industry, and there are quite a few companies which have been researching and growing diamonds for years now. As you can see on IGDA’s website, we are spread from the US to South East Asia to Russia and grown diamond companies around the world are well equipped to start pushing supply to industry. The future is that grown diamonds will be able to supply consistent and growing rough diamonds to an industry whose key raw material, mined rough, is expected to start shrinking in supply.
The general perception in the natural diamond industry globally is that the lab-grown diamonds should be categorized to differentiate from mined natural diamonds; some may even see lab-grown diamonds as a threat as well. What’s your take on this?
We don’t see grown diamonds as a threat to mined diamonds. Grown diamonds present the diamond trade with an opportunity to extend their business to new customers, offer new diamonds to old customers and widen the choice in diamonds. This, we think, will create a bigger & healthier diamond market.
The only distinction between a mined diamond and a grown diamond is that a grown diamond comes from above the earth, whereas mined diamond comes from below the earth. We support the need to differentiate – which is important to us as a leading grown diamond player – and we thus, support third party independent diamond certification. Certification also gives our retail customers means to know their diamonds’ origin and be assured that they are ‘conflict-free’ and have distinct ‘eco advantages.’
More than this category of diamonds eating into the natural diamond business based on price etc., the feeling of ‘threat’ seems legitimate due to instances of mixing of these stones with natural diamonds thus creating instability in the industry, especially in customer confidence being shattered. Your thoughts?
We believe in consumer education and disclosure through branding and as long as this is done, consumers have a choice. In today’s information-rich environment consumers build confidence through their own research and we believe that informing them openly gives them the ability and the tools to choose what’s right for them. Part of this education and disclosure is ‘Certification’ by recognized labs which further ensures consumers know exactly what they are buying.
The natural diamond industry, while claiming that while it is not against lab-grown or synthetics per se, sees a ‘differently categorized with disclosure made mandatory’ a workable solution. Do you, as manufacture, share the onus on this ‘disclosure’ aspect or leave it to the downstream jewellery manufacturers and Wholesalers/retailers etc.? What is your opinion? And, how do you operate?
The diamond industry cannot be grouped or generalized together, there are quite a few that do not subscribe to this sentiment and try to put down lab-grown diamonds by calling it synthetic or worse. This strategy is to mislead consumers confuses them through bans on trading, lack of correct terminology and fear creation.
We, as a producer, are aware of our obligation to disclose that we are selling unique, beautiful and rare lab-grown diamonds. Just like in the larger diamond industry, obligation of disclosure passes from seller to buyer and just like in the mined diamond part of the industry, people take this obligation and their reputation very seriously.
In terms of demand for lab-grown stones, how positive is the response in terms of consumer acceptance globally? Can you give us a picture of the demand pattern country-wise? It’s reported that the millennials are more pro lab-grown diamonds than the older generation of buyers. Any leads on this?
Grown Diamonds offer consumers a fantastic value. Along with being conflict free, origin guaranteed and all the eco-advantages, grown diamonds retail at about 30% lower than mined diamonds. This lets retailers draw in a whole new consumer group that might have never considered buying a diamond. The value also allows them to upsize their diamond, so if their spending limit stopped them shy of the size they wanted, they can get to the size and maybe even one with better purity. For now, the biggest market for grown diamonds is the US.
Grown Diamonds have shown to have a true emotional connect with today’s customers, whatever the demographic. Today, diamonds are a symbol of love, and across the world the love for our environment, our world and everyone that lives in it is a big part of the buying decisions.
Is the lab-grown diamond sector putting in efforts to educate the public about this emerging product? What kind of promoting initiatives are being undertaken, if any?
Well, before this there has never been a diamond that hasn’t been mined. Grown Diamonds are very new for the customers and thus education is going to be the key factor to make them aware about the unique benefits of these diamonds. This is why the grown diamond industry needed a global but collective platform like the IGDA to educate all about grown diamonds and their virtues based on technical facts.
When it comes to India, do you think a separate HS Code, for export and import, should be allotted by the government for lab gown and synthetic diamonds so as to clearly differentiate them from the natural diamonds?
Grown and mined are both diamonds from different origins. We agree on the need to differentiate between grown and mined diamonds but not by placing genuine diamonds grown in greenhouses in a synthetic category alongside non-diamond simulants. That would be discrimination and misrepresentation.
A recent PHDCCI report on the Grown Diamond industry correctly summarizes the situation. The report noted, “The current HS code (7104) that covers grown diamonds creates a wrong image as ‘Synthetic’ in the minds of stakeholders. The study suggests that grown diamonds are to be covered through the same HS code that categorizes Diamonds i.e. HS code 7102 but under a unique sub-category at the 6th and 8th digit level.” The report also underlines that because of the ‘inappropriate grown diamond classification,’ government is not able to derive various benefits of upcoming grown diamonds industry effectively in terms of generating distinct pool of employment, enhancing exports and propelling overall economy’s growth.
Many believe that lab-grown manufacturers are banking on the reports that mined diamonds will soon be out of supply. Is this just shooting in the dark because new mines are being discovered often as well? Your comments please…
There hasn’t been any new major diamond mine discovered in the last one decade. The Frost & Sullivan report estimates that the global mined diamond supply will drop to 13 million carats in 2050 from the projected 133 million carats in 2014. The report also notes that by 2022, mined diamond industry will see rough diamond demand clocking at 178 million carats (annually) while supply side would fall short by 41 million carats.
These forecasts are, however, just the background in which this industry has started. I would however, hesitate to say that it is a pre-requisite. Grown Diamonds offer consumer a new source guaranteed, conflict free, ecologically responsible diamond choice. These, I would say, are our USPs.
Do you think the lab-grown diamonds have made a mark already? Say another 10 years down the line, where do you see the lab gown diamond sector? Affluent, tech-savvy and socially conscious millennials are said to now prefer Lab-grown diamonds over mined diamonds. But are they a bankable section as clientele, given that millennials tastes change fast and they are quickly attracted to umpteen number of newer products and services that are made available to them?
Grown Diamonds is an emerging industry and we are one of the many diamond growers out there. While we cannot speak for the industry but Frost & Sullivan estimates that production capacity for grown diamonds (including gem and non-gem application) will rise exponentially in the next 10-15 years to touch 20 million carats by 2026.
Millennials are one of the various groups of customers that we appeal to. The fact that we offer a diamond that will last forever and is, for the first time in history, source guaranteed, conflict-free and an ecologically responsible choice – makes an important difference to consumers. These attributes have become underlying needs for many products for today’s consumers, including diamonds.
Does IIa Tech manufacture coloured diamonds as well? Can you give more details regarding colours, size, etc.? Is sufficient demand generated for these coloured diamonds as against its manufacturing cost? From which country is the highest demand and in what sizes?
Yes, we grow colored – yellow and pinks. But just like in nature, colored diamonds are rare. We have had success in growing yellow diamonds upwards of .25 carats and up to 4 carats while we grow pink diamonds in sizes between .25-1 carat.
As President of IGDA, what will be the primary issue that you will be addressing to start with? What is IGDA’s agenda for the next few years? Do you see a scenario in the near future, when IGDA and ‘natural diamond associations’ engage themselves to work out parameters for smooth running of both the industries?
IGDA is a global platform for the grown diamond industry to collectively represent & promote grown diamonds as well educate all about grown diamonds. As mined diamond supply declines, Grown Diamonds will supplement the supply fall and can help sustain employment across diamond trade while ensuring consumers continue to have access to diamonds. Extensive research carried out by Frost & Sullivan and several other industry analysts like Bain, have been projecting a gradual supply shortfall for mined diamonds as against a growing demand for diamonds. Grown Diamonds allow diamond trade to widen their business horizon, even when mined supply declines, while ensuring that their consumer still gets a ‘real’ diamond for a reasonable price.
These are too many things to do at once but we will start and focus on education and dispersion of right information about grown diamonds.
Finally, are Gemesis based in Singapore and the company with the same name in USA your Group companies? Can you clear the air over the brouhaha over ‘Winsome Diamonds’ financial involvement in these companies?
IIa Technologies in Singapore is an independent company, not related to or involved with any of the companies that you have mentioned.
Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough&Polished