Jewelers Findings and Materials and Lapidary Work

SIC 3915

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing unassembled jewelry parts and stock jewelers' materials, such as wire, tubing, and sheeting, and establishments of lapidaries. The lapidaries are primarily engaged in cutting, slabbing, tumbling, carving, engraving, polishing, or faceting stones from natural or manmade precious or semiprecious gem raw materials, either for sale or on a contract basis for the trade; in recutting, repolishing, and setting gem stones, or in drilling, cutting, or otherwise preparing jewels for instruments, dies, watches, chronometers, and other industrial uses. The industry includes the drilling, sawing, and peeling of real or cultured pearls. Establishments primarily engaged in manufacturing synthetic stones for gemstones and industrial uses are classified in SIC 3299: Nonmetallic Mineral Products, Not Elsewhere Classified, and those manufacturing artificial pearls are classified in SIC 3961: Costume Jewelry and Costume Novelties, Except Precious Metal.

The $1.3 billion jewelers' findings and materials and lapidary work manufacturing industry was made up of more than 200 establishments in 2008. The six main states producing jewelers' findings and lapidary work were Rhode Island, Massachusetts, New Jersey, California, New York, and Florida, which accounted for approximately 50 percent of total U.S. output.

The industry's revenue for 2010 was reported to be $1.2 billion, with an estimated gross profit of 25.93 percent. Imports accounted for $19.8 billion from 101 countries, and the industry exported $14.9 billion in merchandise to 115 countries, resulting in total domestic demand of $6.1 billion in 2010 for the industry. In 2010 the jewelers' findings and materials and lapidary work manufacturing industry's revenue was $1.2 billion, with an estimated 25.93 percent gross profit. That year, the industry imported $19.8 billion in goods, and exported $14.9 billion in goods.

The largest known diamond was the Cullinan, which was discovered in 1905. The Cullinan weighed 3,106 carats (about 1.4 pounds) before it was cut into 105 distinct gems totaling almost 1,100 carats. Other famous diamonds include the 530.2 carat Star of Africa (named for the Cullinan's place of discovery, the Premier Mine in Transvaal State in South Africa), which was given to King Edward VII of Great Britain and set in the Royal Scepter, one of the British Crown Jewels; the 240 carat Great Mogul diamond, which has vanished since its existence was originally reported in 1665; and the 106 carat Kohinoor diamond, which is also a part of the British Crown Jewels and may have been part of the Great Mogul. Other famous single diamonds are the Vargas diamond, which was found in Brazil in 1938 and the Jonker and Lesotho diamonds, also products of African mines.

Diamond cutting takes careful planning and entails a certain amount of risk. Shape and surface problems mean choosing between the largest cut diamond with flaws and a more perfectly finished diamond. For example, Marvin Samuels of Premier Gem Corp. of New York spent four years planning the cutting of what could have been the largest finished diamond in the world, topping the Cullinan. Samuels chose perfect cutting over size, finishing the cutting in early 1988 with a stone weighing 407.43 carats.

The fortunes of the jewelry industry are often tied to the general economy. For example, during a downturn in the late 1980s, one-carat diamonds that had once been valued at $60,000 sold for $12,000. Bankruptcies, closings, and reorganizations sent shock waves through the industry. Many unsecured manufacturers and suppliers in the findings and lapidary segment were toppled. That trend was exacerbated by a 10 percent federal luxury tax on jewelry over $10,000, although the tax affected only a small portion of the industry. The luxury tax was repealed in 1993.

The 1980s was a decade of international downsizing. In Antwerp, where diamonds accounted for 6 percent of Belgium's imports and exports, the number of diamond workers dropped from more than 19,000 in the 1970s to around 7,500 by 1986. Much of the polishing and grinding business traditionally commanded by Antwerp went to Bombay, India, shops, where costs were lower.

By 1999 manufacturers were anticipating the beginning of the twenty-first century as the time when baby boomers would reach their mature years and spend more of their discretionary income on jewelry and gemstones. Jewelry retailing in the United States grew 6 to 7 percent annually in the late 1990s. Industry shipments increased from $737 million in 1998 to $817 million in 2000. However, employment during this period declined from 5,503 to 5,251. As of 2007, 3,380 people were employed in this industry, earning nearly $124 million in wages.

The interest in the possible healing and life-enhancing effects of various semi-precious stones and crystals stimulated growth in sales of gemstone bracelets, pins, and pendants, and increased many hobbyists' interest in lapidary work. Shows sponsored by the Lapidary Dealers' Association and the American Gem Trade Association experienced record attendance as hobbyists and small dealers sought new enhancements, treatments, and findings as well as unique gems, synthetic or otherwise. Light-colored gemstones like tanzanite increased in popularity. Ancient Roman glass became a popular "gem" because of its brilliant colors. Other popular trends in gemstones included spessartite gems, which are bright yellow to orange garnets from Namibia; vivid green stones of chrome diopside from Siberia and demantoid from Russia and Mexico; rhodolites mined in Tanzania that range in color from browns to reds and purples; and Oregon sunstone, in which carving enhances the luster of the metallic red stones. Synthetic rubies, sapphires, citrines, ametrines, amethysts, and chemical synthetics like cubic zirconia were popular among individual buyers but caused alarm among wholesalers because large-scale substitutions were discovered among some wholesale lots.

Eighty percent of the world's diamonds were produced in Botswana, Russia, South Africa, Angola, Namibia, Australia, and Zaire, in descending order, but Canada was poised to become a world leader. Diamond mining in Canada emerged during the 1980s, with findings in the Northwest Territories and British Columbia. The discovery sparked a staking rush covering some 50 million acres. In 2005 Botswana led in terms of value of diamonds mined, followed by Russia and South Africa, while Canada had climbed to fourth. In 2006 Canada surpassed South Africa to become the third-largest diamond producer in dollar value. Two more mines in the Northwest Territories and Nunavut began production in 2007, putting Canada in a position to challenge Russia as the number-two diamond producer.

The Central Selling Organization (CSO) of De Beers Consolidated Mines, Ltd., marketed the vast majority of the rough-cut diamonds in the world. In the middle of the first decade of the 2000s, De Beers was producing about 13 million carats annually. The CSO shipped rough-cut diamonds to diamond-cutting centers in New York, Antwerp, Tel Aviv, and Bombay. Bombay remained the cutting capital of the world because of low labor costs. De Beers considered adding minute identification numbers on its gemstones by laser drilling, in order to boost consumer confidence in real diamonds over cubic zirconium or moissanite substitutes.

In 2011 the United States imported $1.54 billion worth of polished diamonds, up 6 percent over 2010. In December 2011, the volume of imports totaled 846,866 carats with the average price of the polished stones climbing 13 percent to $1,813.01 per carat. Rough-cut imports to the United States declined 17 percent to $52 million, while rough-cut exports fell 28 percent to $39 million.

De Beers, which produces roughly 40 percent of the world's rough diamonds increased the price 29 percent in 2011. De Beers reported a 5.15 percent decrease in production totaling 31.3 million carats, compared to 33 million carats in 2010. As demand slowed, De Beers cut rough production during the second quarter of 2011 to carry out maintenance at its mines. De Beers suggested production would remain flat in 2012 at an estimated 31 million carats.

With no new mines coming online and the active ones aging, observers were unable to predict whether or not the diamond supply would be able to keep up with demand by the early 2020s, especially as China and India have been strong market drivers.

New York-based Lazare Kaplan International led the lapidary industry in the United States in the middle of the first decade of the 2000s, buying most of its diamonds from De Beers before cutting and polishing them for jewelers and wholesalers. The company reported sales of $374 million in 2008 and sales totaling $17.1 million in 2010 with 148 employees. In 2010 Maurice Tempelsman, owner of Lazare Kaplan announced he was opening offices in Israel where he planned to import large quantities of rough diamonds, as well as transfer a large section of its polished diamond business.

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