40 . SPECIAL ISSUE 2016 . WISH WISH . SPECIAL ISSUE 2016 . 41

tiffany isn’t just about the jewellery any more – by owning upstream

operations for cutting and polishing its diamonds, the firm can ensure

not just their quality but their integrity.

sunshine stones

story Jeni Porter

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dolum ex eumquiae et quam latiume ndandio dia venihicatum re maximperupti se nis

voluptat moleseq uiament iandand estrum

42 . SPECIAL ISSUE 2016 . WISH

Eight years ago diamond-cutting experts at Tiffany & Co. set out to do the equivalent of Deep Blue versus Garry Kasparov. Instead of a contest between an IBM supercomputer and one of the greatest chess players of all time, Tiffany’s engineers were testing their highly developed computer models

against their best of the best: the Tiffany yellow diamond. They wanted to see whether by applying all their 21st-century knowhow they could improve upon the novel way Tiffany’s chief gemologist George Frederick Kunz cut the diamond in Paris in 1878.

In 2008 Marcel Struyfs, director of engineering for Tiffany’s Antwerp-based subsidiary Laurelton Diamonds, was leading a team simulating how to cut fancy yellow diamonds sourced from the now shuttered Ellendale Mine in Western Australia. His boss Andy Hart, Tiffany’s senior vice president of diamond and jewellery supply, wanted to develop the expertise to cut and polish the very rare diamonds in-house. “We tried all different kinds of things and then we said, what if we made a baby Tiffany diamond?” says Hart. “So we took the parameters and we put it in our software and we polished some.” Despite the computer firepower at their disposal they could not better what Kunz had done 130 years before. He’d spent a year assessing the 287.42-carat rough diamond before supervising its cutting into an unprecedented 82 facets instead of the usual 58 to maximise its brilliance.

“Even with all the technology we have we couldn’t improve on it – on that huge Tiffany diamond, one of the most famous diamonds in the world, that was polished by hand in the late 1800s with the tools and

because I’m a process person, but over time I did – you do fall in love with them.” Better than that, he believes because of Laurelton the quality of Tiffany’s diamonds has improved. It’s one of the “happy side effects” of a project that began as a way to ensure supply.

In the three blocks around Laurelton’s Antwerp headquarters more than $50 billion worth of diamonds are traded every year. Laurelton buys rough diamonds ranging from tiny fragments sold in packets of 50,000 called melee through to 20-30ct stones the size of pebbles. The melee gets split in two and given 57 facets in the factory in Vietnam, which handles two million of the 10 million tiny diamonds pieces Tiffany consumes a year. It can take a year to turn one of the big stones into a 10-15ct polished diamond destined for signature pieces like those unveiled in the prestigious annual Blue Book.

When he decided in the early 2000s to bypass the middlemen, buy the rough diamonds and do the cutting and polishing in-house, Hart encountered huge resistance in Antwerp, a city steeped in diamond trading traditions dating back 550 years. “In the beginning it was really difficult to persuade rough diamond people to sell diamonds to us,” says Hart. “The polishers were telling them, ‘don’t do that – it’s not going to be sustainable, they’re going to ruin the diamonds’.” Some suppliers suggested he find another job because he was going to cost Tiffany a fortune and “it’s not going to end well”.

Although securing supply was the driver, it quickly became clear that having control of the whole process from rough to jewellery meant Tiffany could ensure the integrity and quality of its diamonds. But this came with a responsibility not just to the workers in Antwerp – who sort, map, and laser-cut roughs to what’s called makeable sizes – but to everyone else down the line.

some suppliers suggested he find another job because he was going to cost tiffany

a fortune.

technology available at that time. How great is that? I was so excited, I was blown away by that story,” Hart says.

Hart is the sort of process guy that a company in the business of glamour usually keeps back of house. But his is a great story of persistence and curiosity combined with a corporate culture that backed breaking from the norms. From a long line of Pennsylvania steelworkers, Hart got his first job after university making pressure gauges. He worked in pharmaceuticals and textiles before joining Tiffany in 1999. “OK, this is another product for me, there are bath towels and there are diamonds,” the 48-year-old says cheerily of his initial attitude to the job.

But, much to his surprise, that has changed. Hart has spent the past 14 years building Laurelton from nothing into the source of 80-85 per cent of Tiffany’s finished diamonds, with operations in Belgium, Botswana, Mauritius, Vietnam and Cambodia. Along the way the nerdy supply chain guy has developed a deep emotional attachment to the stones. “I never thought I would,

tiffany subsidiary laurelton owns a plant on mauritius where yellow diamonds are polished.

44 . SPECIAL ISSUE 2016 . WISH

In 2004 Hart visited a factory in Vietnam polishing diamonds on contract. The working conditions were so poor he went back to New York and told his bosses it was unacceptable to have them making Tiffany diamonds. “When you decide you want traceability, you open the curtain and you see what’s there. You can’t un-see it.” If they had told him to turn a blind eye, “then I would have had to look for another job, probably – you have to draw the line somewhere.” But the management team led by CEO Michael Kowalski (who became non-executive chairman last year) signed off on Hart’s bold solution: to buy the operation he didn’t like, build a new factory, and negotiate a living wage for its skilled workforce to ensure they were treated properly. “The 280 women who worked there had amazing skills and now I think it’s one of best factories in the world,” says Hart.

The sourcing of rough diamonds is also part of his mandate. Tiffany has direct relationships with many mines supplying diamonds and precious metals and knows where its other suppliers source their stones. “It’s not really possible for us to own mines, so we need to find ways to influence and drive change with them,” he says. Hart works closely with Tiffany’s chief sustainability officer Anisa Kamadoli Costa, who is working to develop standards for responsible large-scale mining.

Hart never dreamed Tiffany would get to the point where it had 2500 employees producing all but one-fifth of its stones in-house, but he’s not ready to stop pushing. He’s focused on improvements that are so incremental they’re measured in the thickness of a human hair.

“Mark says we live in a 10-micron world,” says Hart, referring to Mark Hanna, a physicist and former De Beers executive who is Laurelton’s vice-president of technology and R&D. “We need to have all our

brilliants, princess cuts and yellows. Operations manager Selven Rungasamy, a process guy like Hart, came from the fishing industry. “The aim is the same: to get the biggest yield,” says Rungasamy, the most senior Mauritian on staff. He has papered the walls of the boardroom with a 3m-long flowchart for a workflow with a more exacting production process aimed at making more profitable diamonds.

Tiffany’s yellow diamond collection owes its existence to Hart’s determination and this plant, even though the original source of the diamonds has been exhausted. Previously diamond-cutters would do their utmost to make the biggest yellows because they are so rare. “You would get all different kinds of shapes and sizes – things that Mark was calling potatoes,” says Hart. “We couldn’t buy them as polished diamonds because they couldn’t hang together in a jewellery line.” He secured a direct line to Ellendale’s yellows and between Struyfs’s team and jewellery designers in New York, developed shapes that made the most of yellow diamonds’ sublime qualities but also worked well in earrings, pendants and rings. Other players thought Tiffany was crazy for not maximising each diamond, but he knew they were more valuable as the cornerstone of a jewellery collection. “The diamond is important – it has to be great – but it all has to tie together,” Hart says.

When he couldn’t get polishers to follow Antwerp’s instructions, he bought the Mauritius plant and Laurelton started polishing their own yellow diamonds. “I think they are really pretty, and they are beautiful and rare, and they’re just a complete miracle of nature,” Hart gushes – those buttery, sunlight-coloured yellows have truly captured the process guy’s heart. W

tolerances within 10 microns [0.01mm] in order to create a great Tiffany diamond,” Hart says, explaining that it’s a way to emphasis the “accuracy and the fastidiousness” that should be applied to every step.

The technology used in Antwerp to map and plan diamonds is so advanced, they use lasers to cut preliminary shapes instead of grinding off the edges, saving useable chips. During a discussion in Mauritius about how to handle a rough diamond that will be close to 1ct once polished, it’s pointed out there’s as much as a 30 per cent difference in value between a 0.99ct diamond and 1ct one.

Laurelton bought the Mauritius operation in 2008 when Hart was playing around with yellow diamonds. Its employees, some of whom have 30-plus years’ experience, were highly skilled but the factory was sub-standard. Laurelton negotiated better employment agreements, including target-based incentive schemes, opening a new plant in 2012 from where they polish more than 50,000 stones averaging 0.5ct into round

“When you decide you want traceability, you open the curtain and you see what’s there. You can’t un-see it.”

the tiffany yellow diamond set in a jean schlumberger ribbon rosette necklace