Sarine Technologies, through its application of patented solutions (proprietary mechanics, electronics, optics and lasers) and sophisticated software utilising artificial intelligence (AI), big data, cloud computing and GPU (aka “Nvidia”) methodologies, is a global leader in the development of technologies used throughout the entire diamond value chain, from mine to retail, from rough diamonds evaluation, planning and polishing to polished diamonds grading, certification and trade.
The diamond industry today comprises two distinct categories of stones – natural mined diamonds and man-made manufactured stones, often referred to as Lab Grown Diamonds (LGD). Data show that some 120 million carats of natural diamonds are mined annually, of which roughly half are gem quality, with widely varying sizes and qualities. Over 950 million stones are polished annually from these mined rough diamonds, of which less than 2 million are a carat or larger. The price of a natural diamond is highly dependent on its rarity and quality, as defined by its Carat weight, Clarity, Color and Cut. The wholesale price of a one carat polished natural diamond ranges from US$ 1,000 to 10,000. Accurate data for LGD production are less readily available. We estimate that the annual production of rough LGD, which is experiencing rapid growth, is nearing 20 million carats. Constantly evolving and tightly controlled production processes at continuously decreasing costs result in larger, higher quality LGDs, with less variance in their qualities. Manufacturers mostly aim for stones a carat and above. The wholesale price range of a one carat LGD is US$ 300-400.
Sarine develops, manufactures, markets and sells precision technology products for the assessing, polishing, grading and the wholesale and retail trade of diamonds, utilised throughout the diamond industry. Our technologies and services are mostly applicable to natural diamonds and LGD alike, with the appropriate adaptations. Prior to 2023 our revenues from the LGD segment of the industry were negligible. In 2023 we designated the LGD segment as a strategic market for expansion and growth, and some 8% of our revenues for the year were derived from it. We expect further expansion into this rapidly expanding industry segment in 2024 and beyond.
Following is a brief profile of our offerings. For a comprehensive description of our products and services, please refer to the Business Review section of this Annual Report.
We assist rough diamond mining and trading companies, typically referred to as the "upstream", to document, evaluate and market their inventory of rough stones. Our DiaExpert® accurately models the external surface and 3D geometry of a rough diamond. The Galaxy® provides comprehensive mapping of a rough stone's internal imperfections. Together these two systems and the Advisor® software discern the optimal polished diamonds derivable from the rough stone, and, in accordance with current price lists, generate the rough stone's intrinsic value in actual dollar terms. This information enables the implementation of digital tenders, allowing prospective buyers to bid on the rough stones with comprehensive understanding of their characteristics. This enables bidders to more correctly select the goods on which they wish to bid and directly increases the profitability of both the sellers and the buyers. The provision of such data in a digital format expands the tender's reach to a broader scope of potential buyers. In addition, financial entities can utilise this information to more accurately provide collateral-backed financing to the buyers.
In 2023 we introduced the Sarine AutoScan™ Plus, a cutting-edge system that revolutionises the rough diamond source registration process, scanning rough diamonds at exceptional speeds up to 1000 stones an hour. The rough stone's source registration, coupled with subsequent scans and documentation throughout the diamond's polishing process, establishes a robust, data-driven and scalable solution for diamond traceability. The demand for diamond traceability is growing, driven by both retail brands aiming to ensure and demonstrate the sustainability of their processes and the G7 group of nations (the U.S., Canada, the E. U. and Japan), which recently announced broader sanctions on Russian diamonds. Miners, tender houses, wholesale sorters and manufacturers may also implement the AutoScan™ Plus for internal inventory control purposes. Registering the rough diamonds at source, rather than at the producer's central sorting facility days later, following multiple handling and shipping stations, may significantly reduce inventory loss. The system's low cost, minimal footprint and high speed, enable its utilisation virtually anywhere, including customs gateways and government offices.
Our products and services provide industry-leading automated solutions for every stage of the rough diamond polishing process, applicable to natural stones as well as LGD.
Our DiaExpert® and Galaxy® families of platforms and the Advisor® software are the de-facto worldwide standard for planning the optimal utilisation of rough diamonds, so as to realise the highest possible valued polished gems based on optimisation of the four Cs (Carat, Clarity, Color and Cut) and light performance parameters. Our justreleased (January 2024) Most Valuable Plan (MVP™) software takes the optimisation of small rough diamonds (currently under 40 points to be expanded later in 2024 to larger sizes) to a whole new level of sophistication and automation.
Our third-generation Quazer® 3 green-laser system, integrated with our planning systems by way of the Strategist® setup station, is a high-end solution for the laser cutting and shaping of rough stones, as well as for the dicing of CVD-type LGD. The Quazer® 3’s main advantage is its ability to execute multi-staged processing, like pie-cut sawing, with one setup, saving significant time.
The Instructor® software supports the inline quality control of the actual diamond faceting process. It can also provide remedial polishing steps, when deviations from the optimal polishing are discerned, including application of unique asymmetrical solutions.
The combination of these technologies has transformed the art of diamond polishing into a science. It has raised the optimally achievable yield of the polished stones' combined weights from historically around 37.5% of the rough stone’s weight to over 50%, a benefit nearing 33%. It also allows the manufacturer the flexibility of planning options which best suit actual demand in specific markets, e.g., trading off between Carat weight, key in US markets, and Clarity, more important in Asia Pacific (APAC) markets. It also facilitates prioritising orders for diamonds for specific lines of jewellery, so called "programmes".
Grading
Sarine pioneered technology-derived automated grading of a polished diamond in 1992 with the introduction of the DiaMension® system for the grading of its Cut grade. The current generation DiaMension® HD (High Definition) and the DiaMension® Axiom 3, based on micron level accuracy (which actually exceeds Tiffany & Company’s ["Tiffany"] specifications for extra-fine diamond quality assessment including Symmetry grading) are today's state-of-the-art Cut grading standards.
We introduced the most accurate system for scientifically measuring a polished diamond's actual light dispersion ("light performance") in 2013 – the Sarine Light™. It has today become the most widely used system for light performance analysis and grading in the Asia Pacific (APAC) market – in Japan it has all but become the fifth “C”.
In 2017 we announced the world's yet-unmatched first automated method to derive a polished diamond's Clarity grade, as well as a system for automatically discerning its Color grade, based on two additional cutting-edge systems, the Sarine Clarity™ and the Sarine Color™, powered by artificial intelligence (“AI”) based algorithms. Clarity grading is a very complex multi-dimensional classification, dictated by the number of inclusions in the stone, their sizes, types and locations, along with other parameters. Color grading is also challenging to perform consistently, due to the subtle hue differences between the various grades. Both manual Clarity and Color grading entail subjective labour-intensive processes, with two, sometimes three, graders involved for each process. The utilisation of technology enables more objective and consistent grading, which, as the AIbased algorithms are self-learning, continuously improves over time.
In 2020 we announced the next revolution of polished diamond grading – e-Grading™. e-Grading™ allows for on-site grading, negating the need to send stones offsite to gemmological laboratories. This provides a midstream polisher a number of key benefits:
e-Grading™ will also facilitate in 2024 the significant expansion of GCAL, our New York based gemmological laboratory. By integrating Sarine's AI-based e-Grading™ with GCAL's standards we have already expanded into India and intend to further expand to manufacturers' sites later in the year. In the future, expansion to Botswana, Dubai and other key geographies is planned. e-Grading™ is especially suitable to LGD grading, as its lower cost structure allows the commercially viable grading of lower-valued LGD.
Beyond the 4Cs grading, we are also working to implement the automated on-site sorting of polished diamonds in accordance with industry-accepted commercial criteria e.g., “eye-clean”, “no black inclusions”, “no inclusions under the table”, "no milkiness", issues of tinge, etc. This will facilitate more accurate matching of the goods offered to the retail customer to their nuanced needs, reducing rejects and bolstering profitability.
Retail Trade
We provide technologically advanced solutions for key aspects of the polished diamond retail trade, whether natural stones or LGD. In today's evolving retail environment, channel and product branding and differentiation, as well as creating a captivating online digital experience, are key to a retailer's success.
Our pioneering Sarine Profile™ addresses the retailers' needs for a compelling digital presence, by providing a suite of tools for the presentation of engaging imagery and video information pertaining to the diamond's beauty and quality. The Sarine Profile™ is distinctive in that it caters to the new generation of buyers' engrossment with their mobile devices and their passion for social media. The Sarine Profile™ allows the retailer to display its inventory according to its specific branding goals, as best suited to the merchandise being sold and the market in which it is sold. Each retailer, online or brick and mortar by nature, can create its unique branding message and buying experience by utilising our various tools to provide:
In today's world where ESG (environment, social and governance) concerns garnish ever-increasing attention, responsible and sustainable sourcing and manufacturing are also key to a brand's success. The Sarine Diamond Journey™ addresses this need by uniquely providing concrete verifiable documentation of the rough diamond's provenance and its audited journey from rough stone to polished jewel. Critically, it is the only traceability solution in the industry based on factual (and not declaratory) data, enabled by Sarine's uniquely extensive presence in the diamond industry's midstream. In 2023 over 35.5 million rough diamonds were scanned using our Galaxy® systems and over 70 million were planned using our online Advisor® cloud-based software (including our older nononline versions of the Advisor® software we estimate some 100 million stones in total were planned on our systems in 2023). The online software can record the stone's actual polishing phases for the Sarine Diamond Journey™, thus generating a comprehensive factual testimonial. Integrated with the AutoScan™ Plus source registration, this service provides a unique record of the stone from mine to retail, which serves as a tribute to the retailer's commitment to ESG principles, as well as being the most robust scalable solution to meeting new G7-mandated sanctions, should they stipulate verifiable technology-based sourcing documentation requirements. The Sarine Diamond Journey™ was adopted in 2022 by leading brands – the Maison Boucheron house and the Aura blockchain consortium, a notfor-profit organisation aimed at enhancing transparency and trust in the luxury industry, comprising of LVMH, Cartier, Prada and OTB.
Upon the polishing process's completion, proprietary technology for “fingerprinting” the polished stone, TruMatch™, can also be engraved on the stone without denigrating from its beauty or value. TruMatch™ can subsequently be used to singularly verify the identity of the polished stone in the retail outlet, whether loose or mounted in a setting, and link it to its Sarine Diamond Journey™ record. This so-called digital twin can be utilised by retailers offering extended warranties, providing cleaning and repair services or proposing "buyup" exchanges, as well as by financial institutions or insurers in need of reliable unequivocal identification of the item.
Finally, an additional technology we offer for the retail environment is the 3D-Origin™. It is a true-to-form 3D-printed model of the rough diamond, from which the specific polished diamond was fashioned. Typically, it is offered to the consumer boxed together with his/her polished gem, creating a unique fascinating conversation piece.