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17 february 2020

gleb_sverdlov_xx.pngGleb Sverdlov, CEO of Diamex Lab told Rough & Polished in his interview below about the development of IT technologies for the market of rough and polished diamonds and jewelry.

Please, tell us about your company.

Diamex Lab was set up a few years ago. The company is part of a group of companies and relies on its infrastructure. The reason for company establishment was a new interpretation of the technology for growing and improving of laboratory and natural tIIa diamonds for jewelry and industrial application. This technology was suggested by a team of scientists who work on carbon issues for oil and gas purposes. Difficulties in purchase of natural raw materials and conflict of laboratory and natural diamonds have reduced the attractiveness of the idea for the jewelry market. And exclusive industrial potential removed the project from the Diamex Lab's sphere of interest.

The next stage in company’s life began with the work of mathematicians and programmers. In the process of solving the fundamental problem of protein simulation a mathematical method for dimensional object simulation was invented. This method became the basis for the development of jewelry design tool.

Today Diamex Lab is an innovative company working in the development of IT technologies for rough and polished diamonds’ and jewelry markets.

Tell us about the “July” project.

The project “July” was created as a testing ground. At first glance it seems that julyjewel.ru design tool represents just a beautiful picture with new consumer experience, but it is not only that. The design tool is just a front part of the concept which is capable of transforming and improving the market.

Today it takes 7 steps for a diamond to get from the earth’s depth to the consumer. Each step includes duplicated costs such as taxes, marketing expenditures, rent, wages, borrowed funds. The more steps, the more problems with the range, illiquid assets, receivables, storage, seasonality. Costs divert money from the market, and problems make the business less sustainable. The portion of the abovementioned may be up to 35% of the retail value of the product.

Vertical integration of our concept will allow us to optimize duplicated costs, get rid of these problems and reduce the number of steps. The number of such steps can be reduced to two for large mining companies and diamond manufacturers. Having saved the funds, the market will gain new capacity, and a consolidated marketing budget will allow to resist external competitors and instill jewelry consumption values, rather than carry out small feuds.

While solving the problems of the industry, we do not forget about the consumer. The design tool reflects consumer insights of new generations. Personalization of the offer, granting the key role in the whole process to the client, unlimited choices, purchase on any budget - these are just a part of the requests taken into account.

The project “July” has not yet become an independent brand, but it is striving for this. Now we are more focused on the development of new technologies and solutions that can complement what has already been created.

Among them:

• Interpretation of the results of rough and polished diamonds’ scanning in order to demonstrate to the consumer a real stone with real inclusions in the design tool. We believe that this tool will make it possible for the end consumer to buy jewelry with a future stone at the raw material stage and will expand the market for our equipment manufacturing colleagues.

• A mathematical simulation of light for realistic transmission of stone’s play of color and light on screen of a computer, tablet or smartphone. It will give a new, extremely valuable consumer experience.

• Dynamic fitting in augmented reality. A number of companies is already working in this direction, and they have achieved some success. We hope that we will be able to say something new in this sphere.

• Determining the size of a person’s body using smartphone tools. This task can be referred to the fundamental ones.

Who is your supplier of gems and diamonds?

We have tested our product three times. Once in artificial conditions and twice in real market conditions. All the three were successful. We were not involved in scaling and sales were relatively small. For this reason, we took advantage of the current market offer, without giving preference to any manufacturer. Now we are interested in the markets of ten countries. We are actively looking for partners on these territories. In four of those countries, we have made some progress.

It’s not the first year that Diamex Lab has been a client of AK Alrosa (PJSC), that’s why we consider its divisions - Alrosa Diamonds and Smolensky Crystal, which has recently joined the company, - as priority partners for the project “July” in Russia. Perhaps our cooperation with Alrosa will not be limited only to the supply of stones, we will also be glad to see the Russian company among our first licensees.

Who are your customers, what are their preferences?

If you are talking about the project “July”, then first of all our clients are people who are in love, who are in a relationship and have successful families. We have our own 4 “C”, it’s a pity not all of them actually start with an “E”: Engagement, wedding, birth, anniversary. These are the four Events in which the “July” brand is always happy to participate. Secondly, we are thinking about the prospects of expanding the range and reasons for communication. When the brand gains recognition and deserves the trust of its customers, we will be happy to offer a range of jewelry for such occasions as: first-tooth, graduation, important and memorable moments of our customers, their relatives and friends.

If we talk about the B2B segment, we offer the acquisition of country licenses to major market players with the subsequent integration of our solution into the structure of the company. In small markets or those where the search for a licensee is delayed, we are ready to start independently or on the basis of existing industries.

How do you control the ethical origin of the stones you use?

Thanks for the important and correct question. We support the need to control the ethical origin of diamonds. One of the important criteria for choosing a licensee is precisely its commitment to the Kimberley Process and complete transparency in this matter.

While placing high demands on others, we do not make allowances for ourselves. The architecture of our solutions contains the ability to trace the history of each stone’s origin. A good example and guideline for creating such solutions for us is Alrosa Diamonds, which provides their clients with complete information about the history of the stone. The choice of regional suppliers in those countries where “July” brand plans to develop independently also takes this criterion into account.

What do you think about diamonds grown under laboratory conditions? Do you use laboratory diamonds?

The appearance of laboratory diamonds on the market was inevitable. All precious and semiprecious stones have already been "ill" with this. And only diamonds remained unconquered, being attacked by imitations such as of moissanites and phianites. It is good that in sufficient scale this happened now, and not in the 90s, when this technology appeared in Russia. The current situation does not please me as a market participant, but I am philosophical about it. History tells us that the current state of affairs is temporary. Life will put everything in its place and natural diamonds will once again take their deserved legal position.

As part of the “July” brand, we do not use laboratory diamonds.

Do you think laboratory and natural diamond sectors are able to coexist without any collisions?

I think yes, they are. And this will happen not at the discretion of the jewelry market participants. The history of our company is a good example. We observe a range of breakthroughs made by our colleagues in the search for solutions for the industrial use of laboratory diamonds. Today, medical instruments, optics, electronics and photonics, and other areas create significantly greater value of laboratory diamonds than jewelry application. We are all well aware of examples where industrial consumption easily changes the cost of materials and, as a result, the picture of the jewelry market. Laboratory diamonds are no exception.

At the same time, I think that, no one should be afraid of losing the value of their natural stones, since they contain something that not a single laboratory-created diamond has - its natural uniqueness.

Alex Shishlo, Editor in Chief of the European Bureau, Rough & Polished