New York: According to a recent press release by Frost & Sullivan consultancy, there is positive consumer outlook for grown diamonds, but challenging supply side factors restrain their market potential.
Demand for colorless diamonds in value and volume terms is higher than any other color of diamond in the gems and jewellery industry. One of the key factors that prevented the adoption of grown diamonds in the gems and jewellery industry over the last two decades was the inability to grow colorless diamonds. With the recent technological advancements, this has changed dramatically, and colorless diamonds which are identical to mined diamonds, are being grown in many countries.
New analysis from Frost & Sullivan, The Diamond Growing Greenhouses, based on a survey covering six large diamond buying countries, indicates high propensity of consumers to purchase grown diamonds. However, there are several unrecognized supply side factors that will affect the growth of grown-diamonds as a category. Taking these demand and supply side factors into account, Frost & Sullivan’s latest research estimates the global sales revenue from grown polished diamonds by 2018.
Frost & Sullivan’s survey in six countries indicates that changes in consumer preferences tending towards environmentally and socially responsible products is a key driver for the acceptance of grown diamonds by consumers. Along with this, education will play an important role in making the customer understand the similarities between grown and mined diamonds, and the differences between grown diamonds and diamond look-alikes.
While industry participants are enthusiastic about the increasing consumer awareness, they are equally circumspect about restraints such as the slow increase in capacity in the diamond production facilities that have come up in Russia, China, Malaysia, Sydney, Australia, India, the USA and the Netherlands.
High operational cost is a key factor hampering the grown diamond industry. “We are all still in the infancy of grown diamond, that there are many, many ways we find every day to reduce costs. We must think like manufacturers and get out of the R&D environment”, said Mr. Michael McMahon, CEO of SCIO Diamond Technology Corporation, a leading grown-diamond producer.
Large capital required for raw material production and lack of knowledge in terms of equipment build, design, and application specific processes further affects production capacities. Mr. McMahon states that “technology is held close to the vest and it is not an easy science to apply. It takes years of development, then the ability for your technology to mass produce at the highest levels.”