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

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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

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