Interview with Lusix President Benny Landa – JCK

One of Israel’s richest men, Benny Landa (pictured) has been named globes‘”entrepreneur of the decade” in 2016. After making a name for himself in digital printing, he founded and financed several companies, including Lusix, which produces synthetic diamonds.

Here Landa speaks with JCK why he got into lab-grown diamonds, where he thinks prices and business are going, and what his business brings to the market that is different.

Tell me how you got to the lab.

First of all, you need to know the Landa group. In 1941, my parents fled Poland for Russia. After the war, I spent the first two years of my life in a refugee camp in Germany. My parents had hoped to move to Israel, but at the time immigration was illegal, so they ended up going to Canada, where I grew up. Then I moved to Israel because I am a Zionist, a Jewish patriot.

I started a company in Israel called Indigo, which developed the world’s first digital printing press. And after 25 years, I sold it to Hewlett-Packard. It was 20 years ago. Today, Indigo is not only the largest digital press maker in the world, but it also accounts for half of 1% of Israel’s GDP, which I’m very happy with.

I created the Landa Group, and the Landa Group’s goal is to add another 1.5% to Israel’s GDP, so that in my lifetime we will reach 2% of the country’s GDP. We develop industries in order to influence the economy and contribute to society. I know that sounds very selfless and, of course, it’s also a business, but there’s a higher purpose in this business, and it’s not just about being successful and making money.

When we created the Landa Group, we started with Landa Labs, which is our research and innovation center. We have 150 researchers in Landa Labs. They only do R&D. They develop a technology, and the business model is very simple: when that technology is proven to be disruptive to a large market, we turn it into a separate business. We have established seven companies so far.

We are a materials science company, so all we do is develop processes based on materials science. The head of our energy project came to me and said, “I think we have the capacity to grow high-quality diamonds. And he showed me what he was thinking and why he thought we could do it.

And how is Lusix different?

What continues to characterize Lusix is ​​that it is very science-oriented. The entire Landa Group is focused on advanced technologies. Deep technology takes a long time to develop. At Indigo, it took us 16 years to launch our first product. At Lusix, it has now been 10 years since we started developing the technology.

CVD [chemical vapor deposition] diamond growth itself is not unique. There are many companies that know how to grow diamonds. But I dare say, you can count on one hand those who are really advanced. And even among those who are really advanced, I think we have unique abilities.

What are some of these?

We believe we are the only diamond company in the industry that knows how to grow rough diamonds into controlled shapes. For example, we grow diamonds in the shape of a pyramid.

This means that they are much closer to the final shape of the polished stone than conventional lab-grown diamonds or most natural diamonds. And therefore, there is a higher return for each carat of rough. Since we control the shape, we can get closer to the end product desired by end customers.

Another example is that we are able to grow very high quality color in an “as grown” material. It is not necessary to do HPHT [high-pressure, high temperature] treatment afterwards. This means that our diamonds have, for example, no grain. Most growers find it difficult to grow large stones in one step. The larger the stone, the more difficult it is to maintain color, clarity and to have high quality diamonds. So they grow them in multiple steps, and those multiple steps cause granulation. And more [lab-grown] diamonds have a degree of haze or cloudiness [that] harms their shine.

We are also able to produce substantial volumes with very consistent properties. When a customer buys a package from us, not only do all the stones in that package have a narrow distribution of color and quality, but from package to package we have extremely strict control. We produce very consistent products across the board.

We are also very ESG [environmental, social, and corporate governance] concentrated. were [certified sustainability rated] by SCS Global Systems. We are not the only company certified by SCS, but having all these capabilities as well makes us unique.

What quality are you able to cultivate?

Our main focus is driven by what customers want. Our main focus is F–G color. We can produce D and E colors, but our main focus is F and G, in terms of color and clarity, VS.

How do you see competition from low-cost diamond producers like China and India?

If it were a labor-intensive product, we would be concerned, because Israel is not a cheap country in terms of labor.

If you visit our factory, you’ll see rows of reactors, and you won’t see anyone. We believe we have the most advanced CVD diamond production facility available. We ask people to replace the lot and remove the finished diamonds and replace them with new seeds. But other than that, the factory is fully automated and operates 24/7. [without people].

It is this technological base that we believe will allow us to remain competitive, even with the cheapest producers in China or India. I don’t dismiss them; we have great respect for these producers, but we do not believe that they will be able to undermine our position in the market.

We do not focus on low end small stones or lower quality or commodity markets. We focus on high-end markets, where quality and consistency are paramount and where ESG concerns are paramount.

How many carats do you produce?

Well, we don’t disclose that.

But you do not consider yourself among the greatest producers.

No. We produce from our first plant and our first plant. We are in the process of commissioning our second factory, which will be operational in the second half of this year, and it will increase our production by a factor of approximately four.

Do you expect to be among the leading gemstone producers in the future?

Yes.

Some lab producers have launched brands. Are you planning that?

We want to start by becoming a household name in the industry through the entire pipeline. But you have to walk before you can run. First, we want to establish our name as a premium producer of rough, especially for premium brands.

How do you view lab-grown prices?

We have seen prices go down. We believe it is plateauing or even recovering somewhat. We do not see this as a problem for Lusix, as we believe that we will be able to produce our goods at costs that will allow us to be competitive. With automation and high science, we believe we can produce quite economically and competitively.

Many lab-grown diamond companies are turning to technology applications. Do you see yourself doing this?

Currently we focus entirely on gem quality stones. But the ability to develop technology based on theoretical models, the ability to have extremely consistent production, and the ability to produce very pure diamond are fundamental prerequisites for getting into some of the most advanced technology applications, such as semiconductors. Gem-quality diamonds are orders of magnitude less pure than what is needed to turn diamond into reliable semiconductors.

We are developing a platform on which we can then base our more sophisticated non-gem applications. Everything we develop, we have technology capabilities in mind.

So you’re strictly into gems for now?

[We’re] a gem for now, largely because of the huge amount of research needed to be able to produce diamond-based semiconductors or quantum computing or all these other wonderful and fabulous future applications . We will have a huge opportunity there, but I am a firm believer in concentration. We need to focus on our main goal, and our main goal is to increase production to meet the huge demand we face and cement our reputation in the market.

Any other thoughts?

Everyone talks about the competition between lab-grown diamonds and mined diamonds. I don’t see it that way. If what’s really important to consumers is that the stone on their finger was created millions of years ago underground, we’ll never be able to compete with that emotional aspect.

But for some, this is not an important factor. What is a more important factor is quality, value. For the same price you can get a [bigger] diamond. There has been a huge demand for this better value proposition.

Mined and lab-grown diamonds, like most other industries, will continue to co-exist, such as electric cars and internal combustion engines, mechanical printing and digital printing. We are leading a revolution in digital printing, but mechanical printing will continue for many years. Each technology has its sweet spot.

I’m not a fan of this contest [between natural and lab-grown]. The real competition is for customers’ wallets.

(Photo courtesy of Lusix)

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