Alrosa Sales To Indian Compa nies At $700 Mn
Russian rough diamond exports to India have grown leaps and bounds in the last four years. This symbiotic relationship between the world’s biggest diamond producer and manufacturer received a shot in the arm when the GJEPC and Alrosa recently signed an Mo
What are the main benefits of the MoU that was recently signed between the GJEPC and Alrosa?
Today, India is the largest diamond cutting and polishing centre in the world. Experts say that 14 out of every 15 polished diamonds for jewellery are cut in India, or about 60% of the global output in value terms. It is important for Alrosa to cooperate not only with its clients but also with the organisations taking efforts to develop the diamond market and strengthen ties between its members, and seek to improve its transparency. The memorandum signed with the GJEPC is a prime example of such cooperation. First of all, we will exchange information regarding diamond export and import, including statistical data, overview and forecast of development, and information on market research. Such information exchange will allow Alrosa and the GJEPC to gain a deeper and more detailed understanding of the situation in the diamond market. We will also cooperate in the sensitive area of synthetic diamonds, as their appearance on the market is a source of concern for some companies. The GJEPC is convinced that buyers must obtain all the information about the diamonds they purchase. Sale of synthetic diamonds without proper labelling confuses buyers and, in fact, adversely affects the reputation of the entire industry. The GJEPC advocates separate sales of natural and synthetic diamonds and believes it is inadmissible to mix them within the same parcels. Alrosa supports such an approach, and we will exchange information in this field as well.
How much of Alrosa’s annual production (in value/volume terms) is directly exported from Russia to India at present?
India is Alrosa’s long-standing trade partner. Rough diamond sales to Indian companies have been growing steadily for the last several years. In 2010, diamond supplies to Indian companies amounted to some $300 million, while in 2013 they came up to some $700 million. We are successful in both spot transactions and longterm agreements, and today there are nine Indian companies among Alrosa’s long-term clients.
What are the main obstacles to increasing direct rough supplies to India?
Alrosa does not intend to stop rough diamond supplies to India. As I have already mentioned, we are successfully working with local companies through various auction forms. Moreover, we have noted that some Indian companies prefer to be registered in Belgium or Dubai and buy rough diamonds at these sites. Talking about a potential increase, Alrosa’s sales policy is transparent and complies with the requirements of the Russian anti-monopoly laws, ensuring that clients have equal access to goods, and that uniform procedures of sorting, forming of boxes, and bidding are applied. Alrosa is ready to cooperate with partners who meet the requirements and criteria for potential clients.
What are Alrosa’s long-term plans for India? Will the company open an office in India to facilitate rough tenders/sales in the country?
Alrosa has no plans to open an office in India right now as we operate in Moscow, Antwerp, Dubai, Hong Kong, and New York. But the diamond industry is transforming dramatically and I’m sure that the agreement we signed with the GJEPC will help us to adapt to such changes and be efficient in business.
Alrosa was at one point at the helm of the generic diamond marketing initiative. Is there any progress on that front?
Today, jewellery companies and retailers promote polished diamonds and diamond jewellery. They are close to customers and understand all current trends in demand. You can see the examples of this work every day as jewellery in various price categories is now advertised almost in every magazine. If we talk about a possibility of joint initiatives by mining companies and industry organisations, I think generic marketing in particular markets could be viable. The key markets for diamonds — the US, Europe, Japan — are well known and are already saturated. At the same time, there are a number of new markets besides India and China with significant growth potential. Latin America and Russia have a tradition of jewellery and gemstone consumption, while diamond consumption is not so widespread.
Rough diamonds at the Diamond Sorting Center