July 1998

Gemstones & Pearls:News

Market forces can dramatically alter the supply of any jewelry store product. Here's what tossed Kashan Created Rubies from the synthetic market

Because of their similarities to natural rubies, Kashan rubies were considered the "Rolls Royce" of ruby synthetics in the late 1970s and early '80s. But the company fell into a downward spiral and went out of business by the mid-'80s. Over the past three years, new owner Steve Ruyle tried to revive the business, but now he's ceasing production of the flux-grown Kashan rubies.

Kashan Created Ruby, Ruyle's Dallas-based company, is the victim of what many would consider an unlikely predator – its natural ruby counterpart – the very gem it once sought to duplicate.

A swing by manufacturers toward cheaper flame-fusion synthetics and the market's preference for uniform colors and calibrated sizes dealt further blows. Kashan's untimely death exemplifies how the fluctuations of supply and demand can turn the gemstone scene on its head.

Natural Ruby Overwhelms Market
The supply side of the story begins in the early 1990s when Myanmar (formerly Burma) announced the discovery of a new corundum deposit in the Mong Hsu area. The material seemed odd for corundum – it had a bluish core and wasn't even considered ruby at first. But then it was discovered that heat treatment turned the material into a rich, if cloudy, saturated red reminiscent of the finest Burmese rubies. Unlike those fine rubies, Mong Hsu's heat-treated stones remain plentiful and caused steep price declines. Now commercial qualities of heat-treated 4mm stones from Mong Hsu wholesale as low as $45 per carat.

Kashan couldn't compete, especially in smaller sizes. Ruyle says that while Kashan produced 44,528 carats of cut rubies in its 30-year history, Mong Hsu churns out 45,000 carats daily – along with production from the more than 40 mines elsewhere. Ruyle says he could still compete with prices for larger-than-1-ct. natural rubies, but then Kashan's fortunes took another unexpected twist.

At the same time natural rubies became more plentiful, demand for calibrated stones in uniform colors grew. That struck at the heart of Kashan rubies' main selling point: that the flux-grown method Kashan used yielded an interesting variety of colors. Some Kashan rubies are orangy-red, resembling Thai or East African rubies, for example. Others are pinkish-red, similar to Burma's best.

If the supply of natural rubies dwindles or if demand for one-of-a-kind synthetics returns, Kashan's destiny could change. But for now, Ruyle is out of the Kashan business.

– by Robert Weldon, G.G.

A Kashan-created ruby collection shows a diversity of color.

Gems courtesy of Kashan Created Ruby, Dallas, TX.

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