Element Six
November 05, 08
By Chaim Even-Zohar
In July 2008, Element Six announced that Cyrus Jilla, managing partner of the London office of global business consultant Bain & company, had been appointed the new CEO, effective October 1. The former CEO, Christian Hultner, remained on the board as a non-executive director.
Chaim Even-Zohar opined that the move was proof of de beers' soon entry into the synthetic gem-quality diamond industry: “the DTC Sightholders," he wrote, know Jilla mostly from his crucial role in designing the supplier of choice (soc) strategies, the distribution policies of the DTC, and he was deeply involved in the various soc modifications.
Insiders in London speculate that this is a further sign of progress in the entry process of de beers into the synthetic gem diamond field – a move that seems is now being expedited.
The [former] CEO Hultner is known for his business acumen and he brought unprecedented growth to the de beers industrials (as element six was called previously). He successfully brought element six into the US. as a trading entity. Actually, the only area where Hultner lacks is strategic gem market thinking. He is also not familiar with the diamond promotion and marketing strategies of the DTC Sightholders.
It seems that the one thing that Jilla brings to element six beyond what the company has already is gem marketing and distribution strategies. This writer has maintained for the past decade that de beers will definitely enter into the gem quality synthetic business – it is just a matter of “when.” De Beers possesses the best synthetic know-how and technologies, it produces the best gem-quality product, and it would be sheer folly for it to allow the inevitable gem synthetics market to go to others. Why give up a market share in an area where one enjoys a competitive advantage?
The Jilla appointment probably means that the countdown has commenced – and that the time table has moved forward. It would be my guess that we are now talking about three to five years at most. De beers will gradually have to refine an entry strategy. My feeling is that it will position its entry as the “savior of the natural market” by setting prices and controlling strategy, they might increase the entry costs of competitors and position synthetics as a “replacement” only for the cheaper diamonds. The diamond market is much better off having de beers become the dominant gem synthetics supplier rather than any other party. This is, of course, my conjecture and expectation.
This is not what Jonathan Oppenheimer is saying publicly. He issued a statement noting that, “we are truly delighted that Cyrus has accepted the role as ceo of element six. With his service as a non-executive director, Cyrus already has an in-depth knowledge of the business. Cyrus brings extensive strategic and leadership capability that will be invaluable to element six in meeting the challenges of the future.”
Element six has evolved into an enormous company. With a turnover of more than $500 million and almost 4,000 employees, element six has established diamond synthetics production and processing plants in China, Germany, Ireland, Sweden, South Africa, Ukraine and the UK supported by a global distribution network.
It is the world’s leading supplier of high quality super-materials used throughout the manufacturing industry for a wide range of applications. It is the frontrunner in the development of synthetic diamond and novel engineering materials that are being used in industrial applications that span for example optical, mechanical, thermal, electronic, automotive, telecommunications and medical industries. It is already a supplier of synthetics to the watch industry. The move to jewelry seems as logical as it is likely. The Cyrus Jilla appointment is undoubtedly a brilliant move by the young Oppenheimer.”