Benny Landa is one of those entrepreneurs with their eyes fixed on the horizon. Throughout his busy and varied career he had always managed to plan many steps ahead. When he faced problems, he treated them not as failures but as inevitable bumps in the road. Now, aged 73, he has set his sights on a whole new venture, and it is sparklier than ever. In his central Israel lab, Landa is making diamonds.
More than a quarter of a century has passed since Landa founded his printing business Indigo, which he sold to HP in 2001 for $830 million, but Landa is not one to rest on his laurels. Immediately following the sale he founded Landa Labs, a venture that combines nanotechnology research labs with a startup incubator, which gave rise to a number of successful companies.
According to Benny Landa, Lusix’s biggest hurdle is not technological but rather operational. Industrial manufacturing of lab diamonds caught on only recently, in 2016, creating immediate chaos in the traditional diamond industry, which is one of the strongest and most well-connected industries globally. The industry launched a prompt counter attack, starting a media campaign that highlighted the differences between “real diamonds” and “artificial” or even “fake” diamonds, as they were derogatorily called. The Israeli diamond exchange—the largest diamond exchange in the world—launched its own campaign under the slogan “I love natural diamonds,” which was quickly adopted by other traditional players in the world.
Lab diamond manufacturers, in their fight for public favor, highlighted their lessened environmental impact, and the fact that the creation of their diamonds, unlike traditional mining processes, did not involve human rights abuses or fund totalitarian regimes and violent guerrilla groups. The breakthrough came when “Blood Diamond” star Leonardo DiCaprio invested in U.S.-based lab diamond company Diamond Foundry. Last year, manufacturers won a major battle when the U.S. Chamber of Commerce decreed that lab diamonds cannot be called synthetic or fake.
“A diamond is a diamond, whether it is created below or above ground,” Landa said. “They are trying to say we are fake, like a fake Rolex manufactured in China. But in those cases, the materials and the final product are low quality. Here the result is identical.”
The traditional industry will lose the battle in the end, Landa said, as no traditional industry has ever managed to halt technological development. The old mines are closing, and no new mines are being opened. Lab diamonds will become more and more popular, especially among millennials, who are much more conscientious of environmental and social injustices, he said.
Some traditional players have already come to that realization, like the De Beers corporation, which got its start in colonial Africa in 1888 with founder Cecile Rhodes. The group launched a symbolic jewelry operation with lab diamonds in 2018, deliberately branding them as something lesser. But it was a crack in the façade of the diamond mining industry. They thought they could use lab diamonds to boost their mined diamond business, but the result was the opposite, as the rest of the world now wanted in and the price of lab diamonds jumped, Landa said.
While Lusix is still small, less than 100 people, Landa wants to create a new Israeli industrial branch. He has invested a few tens of millions of dollars in the company so far, but in the future he expects external investors to invest a few hundred million. Lusix’s uniqueness is that it is one of the only companies in the business capable of creating completely clear diamonds, he said, and the fact that all its technology and manufacturing are developed and created in-house makes it more efficient and cost-effective. The fact that they are capable of creating a pyramid-shape diamond is also more efficient, as it means they can use 70% of the raw material instead of 30% like other manufacturers, he said. His target audience is commercial—the young couples buying engagement rings, not multi-millionaires.
Currently, despite their somewhat “lesser” status, lab diamonds only cost 30% lest than their natural counterparts. This is because they make only a very small part of the market, and prices will not change until they are at least 10%, Landa said. As diamonds are priced according to the Rapaport price chart, no single player can change their price. “Maybe in 20 years lab diamonds will break the market,” Landa said, but people will have to wait at least 15 years for “low-cost” lab diamonds. Companies are also far from optimizing the technology energy-wise, Landa said.
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