Merger With a Mission

Sarine Technologies Ltd, released a statement in May confirming its acquisition of GCAL (Gem Certification & Assurance), creating a new collaboration between the Israel-based advanced diamond technologies systems and the US-based certification laboratory, now referred to as GCAL USA LLC.

This gives Sarine 70% ownership of GCAL USA LLC, through a transaction price of $5.65M. Drawn from 2022 results, the merger is projected to increase the group’s profitability by some 7% while creating substantial cost savings.

Merger Details

While the newly merged company will become part of the Sarine group, GCAL will continue to operate seamlessly, being managed by GCAL’s New York-based team. Customers can expect the same high standards of grading and certification services to continue without interruption.

GCAL founders Don and Pamela Palmieri established the business in 2001 as a family run operation. Today, their son Angelo Palmieri serves as president and chief operations officer.

Sarine’s CEO David Block remarked, “We have found a partner that shares our values of quality, consistency, reliability, transparency and customer centricity.”

Artificial Intel Benefits Diamond Grading

The merger’s mission is to provide North America and other markets with some critical solutions, the most pressing concerns are rapid, accurate, efficient, and consistent grading. Solutions also include provenance data, which are key issues in this era of geopolitical uncertainty.

GCAL’s Angelo Palmieri addresses the critical aspect of diamond traceability solutions by providing verifiable tracking of diamond origin, its journey, and transformation from rough to polished state. “This can now be added to any GCAL Certificate of natural diamonds,” he points out. “We think that is a huge benefit, since 100 million rough diamonds pass through Sarine’s system annually. Most major manufacturers have the equipment and capabilities to put even more stones through this solution.” With Sarine’s technology, Palmieri adds, “including hardware, software, and processes, we now have the ability to ensure suppliers are not delivering Russian origin goods to them if they want that data.”

New Global Reach

Capitalizing on Sarine’s sophisticated AI grading technology, the newly merged company is poised to extend its grading services worldwide.

AI grading technology is an ever learning capability, says Sarine’s Block. In the same way that a professional with decades of experience can deliver better results, he explains, the same goes for AI – only better. “The more data you provide the machine learning algorithms, the better the algorithm becomes. Therefore there is a continuous process of gathering data to see how we can further improve the grading process,” he confirms. AI has advantages over human graders where the only way they can improve is for each person to keep gaining experience over a long period of time in a step by step process, Block notes.

Palmieri expands on that concept. “We have the AI systems in our lab, and have already begun incorporating them into our process,” he confirms. “This means that GCAL certificates have the benefit of the ultimate in gemological expertise via GCAL’s graders, plus the ultimate in technology (AI Grading systems trained through machine learning algorithms). To be clear, not every diamond can be put through the systems today, but eventually every GCAL Certified diamond will incorporate AI Grading.”

Specifying Standards

“Many retailers have QC criteria beyond the 4Cs. Items like color tints, fluorescence colors, black inclusions, inclusion locations, opens, and so on,” Palmieri reveals. “We enforce these manually in the lab for our customers. But replicating that times 1,000 via human graders is very difficult. However, the machines are taking hundreds to thousands of images per diamond.

“So, in the very near future, not only will we be able to grade anywhere in the world to the proper standards, but retailers will be able to curate their own standards.” GCAL customers are ecstatic about this possibility, he reports, because it allows retailers to curate their own special standards that set them apart from their competition.

Block describes how AI technology protects against human error in the grading process for a superior outcome. With humans performing this task, grading is based on how the color or clarity is perceived by the grader. A very wide range of factors can influence the outcome, Block reveals. Grading conducted by a human might be impacted by fatigue, even mood he points out. “AI technology-based grading is not influenced in any way and is therefore highly consistent,” Block states. “Each time a diamond is graded regardless of on which system, location, time, or other factors, it will produce a consistent result. In order for a manufacturer to supply a consistent product to retailers and the retailer to provide a consistent quality product to the consumer, it is crucial to have consistent grading.”

Consistency Guaranteed

In addition to human behavioral inequities that could negatively impact a report’s outcome, Palmieri adds that machines can’t take bribes nor are they subject to coercion. “GCAL currently has one location in the US, and we use blind, consensus grading. We can tightly control all these issues. But as we have seen when our competitors have expanded overseas, much of this control is lost, sometimes intentional, and sometimes not.” He has witnessed the fallout resulting from poorly graded goods in foreign labs.

“AI (trained correctly) solves this,” according to Palmieri. These concerns, he explains, are the sole reason GCAL hadn’t previously expanded overseas. “And through technology, we now have that ability. Customers will not have to worry about which GCAL it will be graded in…  Technology (Sarine) + Expertise (GCAL) will provide for the ultimate combination in delivering scalable grading services, without compromising the standards.”