UPDATE: Metech enters JV deal with X Diamond Capital to manufacture lab-grown diamonds

Retail jewelery shop in Singapore’s Little India neighborhood; taken October 2018.Retail jewelery shop in Singapore’s Little India neighborhood; taken October 2018.

This article was originally published on Saturday, 25 September 2021 at 13:11 SGT; it has since been updated to include additional comments from the company. 

Metech International’s wholly owned subsidiary Asian Green Tech has entered a deal with X Diamond Capital to set up a joint venture, called Asian Eco Technology, in Singapore to manufacture and distribute lab-grown diamonds, the company said in a filing to SGX Friday.

Asian Green Tech will hold 51 percent of the joint venture, which it will manage, while X Diamond Capital will hold the remainder and will provide technical support, the filing said.

“The group’s entry into the joint venture is in line with the group’s strategy to expand into the environmental and sustainability business. As lab-grown diamonds are created without the need for mining, they are a more sustainable production of diamonds and aligned with the group’s environmental and sustainability business model,” Metech International said in the statement.

Asian Green Tech will fund its portion of the initial paid-up capital of S$500,000 via internal resources, bank borrowings and/or equity fundraising, the filing said.

In a separate press release filed to SGX Sunday, Metech cited data from Statista showing the market size of lab-grown diamonds is expected to grow to around US$29.2 billion by 2025 and increase to nearly 19.2 million carats by 2030.

That compared with around 6 million to 7 million carats produced in 2020, although still dwarfed by diamond mining which hit a peak of 152 million carats in 2017, the statement said. Demand for lab-grown diamonds has also been rising, with the world’s largest jewellery retailer Pandora saying it will switch to exclusively selling lab-grown diamonds, Metech noted.

Samantha Hua , deputy CEO and executive director of Metech, said lab-grown diamonds provide a sustainable solution to the declining supply of mined diamonds.

“In addition, the millennial generation are also more conscious about the environmental, sustainability and ethical impact of mined diamonds. With our joint venture, we have the capabilities to create our own quality diamonds in Singapore and establish new channels to make it accessible to a wider consumer base,” she said in the statement Sunday. “I believe that we are in the early stages of this emerging consumer trend and we are excited about the opportunities ahead.”

The joint venture is not expected to have a material impact on Metech’s earnings per share for the fiscal year ending 30 June 2022, the filing said.

Metech International engages in a recycling business, including consulting and management services, as well as supply-chain management in renewable, clean energy technologies and related industries.

Singapore-based X Diamond Capital, incorporated in 2019, has wholesale of jewellery made from precious metals and stones and manufacture of piezo-electric devices as its main businesses. Deng Yiming holds 40 percent of the company, Xu Kang holds 35 percent and Yang Hanyu has the remainder.