Idar-Oberstein Aims to Stay a Cut Above

“The knowledge of gemstones and their behavior is an essential key to the future of Idar-Oberstein.” It’s a deceptively simple statement by master cutter Gerhard Becker, whose family business, Friedrich A. Becker, has cut gemstones in the region since the 1500s. It also underscores the German philosophy of steinkenner, or “gem-knower,” that has kept Idar-Oberstein strong for centuries in spite of growing competition abroad.

But is Becker pondering the future as though it might be in question? Few people would have questioned the future of Idar-Oberstein’s centuries-old gem cutting industry some 20 years ago. Now, however, serious questions about the industry’s vitality are being asked by many gem-cutting families and government officials. The self-analysis has been brewing for the past decade, particularly as Idar-Oberstein’s almost monopolistic hold on the secrets of fine gemstone cutting has given way to rising competition in the Far East, Israel and the United States.

This is not to say that Idar-Oberstein as a gem center is finished — far from it. The picturesque adjoining cities remain a mecca for gemstone buyers. Out-of-towners from around the world often congregate in nervous, huddled groups in front of Idar’s Merian Hotel, furtively stealing glances at one or the other’s gem parcels or making serious telephone calls to their respective homelands and bosses, transmitting market prices, offering bids and payment schedules. They are here for one purpose only, and that is to sell.

Natural pull: Many of the same out-of-towners also have been selling their rough in other cutting centers that compete with Idar-Oberstein, particularly in the Far East and, to some degree, Israel. When the migration started a dozen years ago, it was not a problem. In those days, the Far East’s cutting technology left something to be desired. Idar-Oberstein could maintain a competitive edge with quality cuts and proper weight retention.

What a difference a decade makes. “We now have plenty of competitors, and they have been getting better and better!” says Hans Dieter Haag, who owns one of Idar-Oberstein’s important cutting factories. “Bangkok has been upgrading to compete with us, while lower grades of material follow the cheaper labor and end up in India, China, Sri Lanka and other places.”

Though Idar and Oberstein strive to stay ahead, the fact remains that a lot has been lost. Fifteen years ago, Idar-Oberstein was a center for mass-produced fine gems. Since then, however, many German cutters have developed affiliations with Thai cutters. And some cutters in Idar-Oberstein feel these affiliations have hurt more than helped.

The federal government of Germany has taken notice of Idar-Oberstein’s changing fortunes. During 1996, it sponsored a program called “ZIRP,” an acronym for what in German translates as “future initiatives for the area of Rheinland Pfalz,” where the towns of Idar and Oberstein are located. The conference, in which more than 200 companies participated, focused on how the cutting industry could be helped. As part of the effort, the government created a multimillion-dollar fund aimed at promoting the cutting products of Idar-Oberstein. The industry also is devising a variety of marketing strategies.

“Our strength is our base: traditional cuts and perfection,” says Hans Dieter Haag. “We have a lead on that and the point is to make the public aware.” While the program is too new to measure results, many cutters are encouraged by its creation and its focus on regaining lost ground. “Mass producers think the secret is in selling cheaper,” says Eckehard Petsch of the cutting firm of Julius Petsch Jr. “What we charge for is value. We deliver, on time, stones you can repeatedly set, all at fixed prices through the year. We can even cut small stones — up to one-tenth of a millimeter — and we encourage designers to try our new cuts. Good cutting is our business philosophy.”

East vs. West: Bangkok is just one destination for the kind of gemstone rough that used to go exclusively to Idar-Oberstein. Much like a mountain stream that finds the most expeditious path around obstacles, so too does gemstone rough.

The force that dictates this path is mostly commercial, says cutter Michael Gray of Graystone Enterprises in Missoula, Mont. “Expensive rough and big stones still go to Germany, but they are also going to cutters in the United States and elsewhere where high yield and attention to beauty are crucial.” Gem rough at the other end of the spectrum goes to the Far East. The reason? Economics, mostly. Because high labor costs represent only a fraction of the total cost of a high-quality gem rough, dealers can well afford to ensure a good cut by going to a U.S. or German cutter. Even a high cutting cost of $100 on an expensive piece of rough (say a $2,000 piece) represents only a minor portion of the total cost (5% in this example). But a lower quality gem rough costing $5 will probably end up in China, where it is cut for $1 (still 16% of the gem’s total cost). If the same stone were cut in Germany, the cutting would far exceed the value of the rough!

Recovery is another factor that determines where gemstone rough is cut, and here is where Idar-Oberstein faces tougher and tougher competition. Sometimes more of the stone must be sacrificed in search of fine cut than in search of high weight. The German cutters know that well-cut stones combined with a high percentage of recovery is an optimal choice — and they’re masters at achieving it most of the time. But Far Eastern cutters are giving them a run for their money. “Yields of 5%-8% used to be standard in the Far East, but now yields of 25%-30% and more are not unusual,” says Mike Gray.

Creativity may be the answer: Idar-Oberstein’s future may well lie in the creativity of its cutters and their relentless search for details that distinguish.

Hans Dieter Haag points to an extra row of facets that his company places next to a gem’s crown. ‘We do it on all of our finer stones, and though we sacrifice a little weight, we gain in beauty.”

Adds Eckehard Petsch, “One could say the fifth ‘C’ [of colored gemstones] stands for creativity.” He points to a new line of faceted colored gemstones known as “Spirit Sun” and “Context Cut.” Both cuts were designed by Dr. Ulrich Freiesleben with Bernd Munsteiner for a maximum return of brilliance and color, and both come in uniform sizes and outlines that are ideal for larger production. They are targeted at designers and goldsmiths who are eager to employ new ideas and are intended to help Idar cutters regain some ground they lost to competitors in recent years.

In fact, creative cutters have been scarcely affected by Idar-Oberstein’s woes. Their stock has risen, especially artists who have something truly unique, difficult or impossible to copy. Unique carvings or one-of-a-kind specialty cuts have continued to enjoy growth. “Gemstone design has great possibilities; but not everything should be left to jewelry designers,” says master cutter/carver Erwin Pauly. “Our clientele who buy well-cut stones also buy well-designed jewelry. It is important to us that our stones show a maximum of beauty and life.”

Bernd Munsteiner, whose fancy cuts revolutionized the gemstone cutting industry in the 1980s and 1990s, is one example of an artist who creatively finds new ways to express himself on a continual basis. Munsteiner sculpts, paints and also cuts and carves gemstone and ornamental materials, sometimes combining these modes of expression.

Munsteiner and Pauly’s mastery of gemstone cutting has changed the way gems are used and appreciated. And both men have passed their cutting philosophies to a new generation. In each case, the fathers have encouraged their children to seek new methods of expression in gem carving. And their offspring have shown themselves equal to the task. Tom Munsteiner was exhorted by his father to develop fresh new ideas. Hans Ulrich Pauly, one of several brothers to enter the carving business, has become as recognized as his father. In this respect, the German tradition of passing on the secrets to a new generation has changed a little bit.

Rigorous training: The Germans proudly attribute their strength in this field to the country’s complex six-year cutting apprenticeship and practical program (which includes cutting, gemology, technical drawing, design aspects and bookkeeping). Only upon completion of this grueling program are cutters awarded a Meisterbrief or certificate.

Though the strict educational tradition is fine, there is still a strong feeling among many of Idar-Oberstein’s gem dealers that their community needs to better use its abilities and react quickly to change. “When Bangkok learned how to do calibration, we had to do something else,” says Rolf Goerlitz, a gem cutter and dealer at Idar-Oberstein’s bourse. “So we concentrated on optical features. That is one example of our change in strategy. It is important that we do not go back to our roots, however. We must always develop forward from our roots.”

A TALE OF TWO CITIES

Looking down on the towns of Idar and Oberstein from the top of the Merian Hotel, the entire Idar valley unfolds before you (this is the tallest building in Idar; it also houses the Diamant und Edelstein Bö#-10#rse, the region’s bourse). From this perspective, you would never think these twin towns could be host to a constantly changing international audience. But behind the traditional facade of frothing beer and sausages, of steaming red cabbage, schmalz and spiesbraten, the towns of Idar and Oberstein form a internationally famous gemstone community that has nonetheless had its share of ups and downs.

Cut-throat competition may be Idar-Oberstein’s current problem and perhaps one of the most serious it has ever faced. But the cities are no strangers to challenging dilemmas. At the beginning of the 19th century, Idar-Oberstein’s agate supplies, its local pride and joy, were all but finished. (Agate is a cryptocrystalline quartz that was mined along the Nahe River and gave rise to the tradition of cutting and polishing in this Western region of Germany.)

With agate supplies petering out, those with an adventurous spirit left. One, an accordionist, traveled to Brazil and played for anyone who would listen. One day, he visited a farm in Rio Grande do Sul and was stunned to see an entire cottage made of banded agate and amethyst geodes. As author Peter Bancroft relates in his book Gem & Crystal Treasures, “He contacted relatives in Idar, raised sufficient funds, bought the walls and replaced them with new wooden fences. The farmer was pleased and the musician made a fortune. More Germans came to Rio Grande do Sul, found other deposits of agate, established a new mining industry and revitalized Idar-Oberstein.”

Others left Idar-Oberstein to travel to Africa and Asia, securing more agate deposits and venturing into other materials such as beryl, chrysoberyl, garnet, topaz, tanzanite, tsavorite and kunzite. Wherever they went, they formed joint ventures or mining proprietorships, with most of the rough material ending up on Idar-Oberstein’s cutting wheels. Some families specialized in Asian or African gems, others in Brazilian. And in time, gem rough purveyors came to regard the Germans as their best buyers.

At his office in Idar’s gem bourse, cutter Rolf Goerlitz points out that maintaining that edge will be one of Idar-Oberstein’s greatest challenges in the future. “We have to have our ears and eyes around the world attuned to new deposits, finds and contacts. Our advantage is in being able to buy better than anyone else.”

Observers say Idar and Oberstein families historically have undertaken a systematic and strategic stockpiling of rough gem materials, and that to this day there are huge secret reserves of various gem species and qualities of rough. It is rumored that many of Idar’s families have stockpiles of rough that could last for several more generations. Now that’s history.