Generation Start Up: Trigem wants Dubai to become a hub for diamond servicing
The emirate is a major trading centre for the precious gemstone, but Trigem is going a step beyond
Given its dealings with the most valuable gemstone in the world, Trigem’s headquarters is surprisingly humble – a few sparse rooms in a warehouse in Jumeirah Lakes Towers, home to the Dubai Multi Commodities Centre free zone.
Inside, it is a hive of focused activity, where a team of workers sit planning, grading, cutting and polishing an array of rough diamonds until they are ready to wear. The company does not trade diamonds, but will spruce them up for commercial retailers and jewellers to sell on, and repair and re-cut them for private individuals.
Dubai has this status as a rough diamond trading hub, but we want to change this so that diamonds are not just bought and sold here, but serviced as well, which will massively transform and grow the industry.
David Zabinsky, Trigem
“Over the years, Dubai has become a hub for rough diamonds trading – this is no surprise given its geographical place in the world,” chief executive David Zabinsky, tells The National. “Dubai is right between South America and Africa, where many of the world’s diamond mines are located, and India, where much of the world’s diamond processing and manufacturing takes place.”
Dubai is one of the world’s top three diamond hubs, along with the leader Antwerp and Botswana, and its diamond trading industry was valued at $26 billion in 2016, figures from the DMCC free zone authority show. The value of imported polished diamonds to the emirate stood at $6.7bn in 2017, while exports of the same totalled $4.8bn that year, according to Dubai Customs.
Yet, until recently, “there was nobody in Dubai providing an economical polishing and cutting service”, Mr Zabinsky says. Typically, diamond retailers will source rough diamonds for jewellery then send them to India for affordable cutting services or, for a higher price, to the US and Europe – mainly Antwerp, the diamond capital of the world, where 84 per cent of the world’s mined rough diamonds end up.
In 2017, diamond trading company Nemesis International launched the UAE’s first diamond polishing facility, called Almas Diamond Services. The factory focuses on high-value diamonds of as much as 10 carats or more. Trigem spotted a gap in the market to service the full spectrum of gemstones, including those of just one carat or less, as well as those worth substantially more money.
Mr Zabinsky, a former manager of investment development for the Americas at Ras Al Khaimah Economic Zone, teamed up with Trigem’s two other co-founders – chairman Alan Davies, who used to work for mining giant Rio Tinto, and executive director Cameron Parry, the founder and chief executive of London Stock Exchange AIM-listed gold company, Lionsgold.
The business was funded entirely by the three founders, including the purchase of machines for various stages of the diamond processing journey and the hire of a factory manager and seven other staff. Mr Zabinsky declines to reveal the initial investment amount.
Since launching in March, Trigem has processed 200 carats worth of diamonds. Its facility has the capacity to service 250 carats per month and it aims to double this by the end of 2019, the chief executive says.
When a client brings a rough diamond to Trigem’s workshop, it goes through several stages. First, it is "mapped" with a diamond planning machine and related imaging software, through which the potential of the stone is realised and decisions made as to how it should be cut, based on its dimensions and fault lines.
It is then cut into the desired shape using a laser sawing machine. Next, it is polished according to the cutting plan generated by the software, over and over again to get the desired result. Finally, the polished diamond undergoes a measurement and grading scan through computer software, to check every surface and detail is correct.
Trigem serves three categories of client. Traders in Dubai are its main customer base, including the big jewellery retailers as well as sole diamond traders registered in DMCC or the emirate’s other gemstone trading zone, the Gold and Diamond Park. Both free zones have strict regulations to govern the buying and selling of precious stones and ensure they have not been sourced from conflict zones.
The UAE became the first Arab nation to join the Kimberley Process in 2003, a multi-lateral global trade regime established to reduce the flow of "blood diamonds" - those stones mined in a war zone and sold to finance an insurgency or other armed conflict.
DMCC’s Dubai Diamond Exchange is the only trading platform in the Middle East to trade in diamond and coloured stones and it is affiliated with the World Federation of Diamond Bourses.
The second client group is private individuals, for whom Trigem can help source rough diamonds through mining contacts and polish them – although it cannot buy and sell them. It will also repair and re-cut polished diamonds for private clients if they have chipped or if the diamond is old and the customer wants a modern cut.
The third group – which is growing rapidly, according to Mr Zabinsky – are jeweller clients based overseas. Trigem has begun servicing, repairing and re-cutting diamonds sent from New York and hopes to start working for a Hong Kong-based client later this year, then Canada and elsewhere in the world over the medium term.
“Our key selling point is really this ‘East meets West’ location that Dubai is known for,” the chief executive says. “Our price-points are lower than in Europe or the US, but we offer a high-quality service and standards of provenance, transparency and discretion that international clients require.”
In India – the cheapest market for diamond processing – a single rough diamond can be cut and polished for as little as $60 to $70, compared to between $160 and $250 per stone in the US or Europe. Trigem’s services cost somewhere in the middle.
“Dubai has this status as a rough diamond trading hub, but we want to change this so that diamonds are not just bought and sold here, but serviced as well, which will massively transform and grow the industry,” Mr Zabinsky says.
He believes Dubai has other advantages. Its robust criminal laws and general high level of security mean “you don’t have to worry about being hijacked on the way to the airport”, while low customs duties for reparation and other diamond services compared to other parts of the world are an additional bonus.
Dubai’s diamond servicing industry may be nascent when compared to the mature trading industry, but Mr Zabinsky says this will change in future. Like other free zones, DMCC and the Gold and Diamond Park offer attractive incentives to jewellery and gemstone companies, which is bound to attract new entrants to the market.
Trigem is not worried about rising competition. It intends to continue providing customers with a high quality of service, good communication, potential links with mines using its founders’ contacts, and competitive pricing, Mr Zabinsky says.
From this year, the company aims to expand its services and reach and may even launch new verticals such as jewellery manufacturing and mine acquisition, as well as deepening its processing and polishing services. “We want to be able to offer a fully integrated service including all components of the diamond processing journey from ‘mine to mine’ [the customer’s piece],” he says.
There are no plans to seek outside funding in the immediate future. For now, the founders have enough funds to support the business, while also investing organically-generated revenue in the company’s current and future operations.
Updated: May 12, 2019 10:34 AM