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Eurasian Diamond Center should bring profit and open new prospects and opportunities for all its players

25 december 2017

alexey_ivanov_xx.jpgThe ALROSA affiliate in Vladivostok established in 2016 was headed by Alexey Ivanov about half a year ago. He was charged with the responsibility for developing business on the company's Far Eastern platform and attracting new customers to the Eurasian Diamond Center (EDC).

Alexey Ivanov, who has many years of experience in the diamond field under his belt, has a legal education and headed ALROSA's representative office in Israel and that of Arcos Diamonds Israel, Ltd. in different years, previously holding the position of an assistant to the president of ALROSA. In recent years, he headed the Secretariat of the Deputy Chairman of the Russian Federation Council and was an assistant to Vyacheslav Shtyrov, Member of the Federation Council at the Federal Assembly of the Russian Federation.

Alexey Ivanov answered the questions from Rough & Polished regarding ALROSA's activities on its Far Eastern platform.

ALROSA opened its affiliate in Vladivostok in the fall of 2016. What are the results achieved by it in 2017? What are the major projects and activities you would like to highlight?

The company’s affiliate in Vladivostok is the "youngest" subdivision of ALROSA, as we started our operations there just over a year ago. Since the start of 2017, we organized and held there three international auctions for the sale of diamonds of special sizes (more than 10.8 carats), three tenders for a regular assortment of gem-quality diamonds (less than 10.8 carats), as well as tenders for polished and industrial goods. The Vladivostok-based affiliate sold more than $ 70 million worth of rough and polished diamonds over the period of one year.

It is a good result for a just recently established trading platform. The auctions and tenders in Vladivostok are attended by customers from all over the world, including such major diamond industry centers like India, China, the USA, Israel and Belgium.

We continue to work to expand cooperation with customers from the Asia-Pacific countries, primarily from China. In addition, we are looking to such promising diamond industry markets as Japan, Singapore, Brunei, Republic of Korea, Malaysia and others.

Currently, we are working on expanding our sales of polished goods belonging to “fast-moving grades” of up to 1 carat on the affiliate’s trading platform. We can see interest in this type of goods both from our regular buyers of rough and from companies operating in the mainland part of the People's Republic of China.

You also took part in the Eastern Economic Forum, EEF-2017. How does this help you to develop the operations of your affiliate?

The forum fully met our expectations. We successfully conducted international auctions for the sale of rough and polished diamonds of special sizes +10.8 carats: the company sold all 45 auctioned rough diamonds and 33 of 36 polished diamonds. The famous Dynasty diamond collection was displayed during the forum at the ALROSA stand in the Far Eastern Federal University, and at the same time there was organized a trading session to sell certified diamonds there, accompanied by one more diamond trading session on another floor in Vladivostok for private banking customers of one of the largest Russian banks. ALROSA's stand was visited by members of the Russian Federation Government, the delegation from the Kingdom of Thailand and many other forum participants. We employed the main advantage of such events - the opportunity to establish new business contacts and find areas of common interest with potential partners. We will certainly develop these contacts.

On the eve of the forum, there was another significant event – the Indian KGK company opened a diamond-cutting factory in Vladivostok. Do other diamond manufacturers show interest towards the Eurasian Diamond Center?

The opening of the KGK factory really became a landmark event. It is no coincidence that the Russian President personally gave the start to the work of the enterprise. It is clear that without the participation of ALROSA, the implementation of this project would be impossible. All the goods processed by the factory were mined in Yakutia. The launch of the KGK factory shortly after the establishment of the ALROSA affiliate in Vladivostok creates the necessary synergy to attract the attention of industry stakeholders to Vladivostok as a new focal point of industry growth. KGK is currently taking part in a project aimed at training personnel for the diamond industry on the basis of one of the educational institutions in Vladivostok. This is an important step towards creating conditions for developing the diamond industry in Primorye. Attracted by the idea of ​​creating a diamond cluster in Vladivostok, several world-class diamond manufacturing companies have already visited the city. Some of them have preliminary projects for the creation of diamond processing operations in the city. While all these projects are at an early stage of discussion, the interest displayed appears to be revealing.

What other steps does ALROSA take to turn Vladivostok into one of the world's diamond centers?

We understand that in addition to having an appropriate infrastructure, which is necessary for diamond trading, Vladivostok should also become a platform where stakeholders of the global diamond industry will meet regularly. At the end of the Eastern Economic Forum, negotiations were held with the representatives of one of the leading industry organizations, the World Federation of Diamond Bourses (WFDB), to hold a presidential summit of Asia-Pacific diamond bourses in Vladivostok in 2018. This decision has been made, and we will help in organizing this event.

Before heading ALROSA's affiliate in Vladivostok, you have been in charge of the company's sales office in Israel for more than 10 years. In your opinion, what is the specificity of the Vladivostok trading platform? How is it different from others?

The affiliate in Vladivostok is in many ways a unique division of ALROSA.

First, it is focused on customers from the Asia-Pacific countries. There are 58 such countries in the area, although, of course, not all of them have diamond-processing or jewelry industries. We will develop relations not only with India and China, but further on with other countries of the Asia-Pacific region.

Secondly, the establishment of ALROSA's affiliate in Vladivostok and redirection of part of the rough diamond flow to this new trading platform became a real response to the call of the country's leadership for the development of Russia’s Far East, therefore the work of the affiliate is under close attention of the state. It was with the aim of expanding the demand for goods produced by ALROSA that the Eurasian Diamond Center was established in the City of Artem. In the vicinity of the trading premises of the ALROSA affiliate, the EDC platform was used to host the State Control Group of Gokhran, the Far Eastern Specialized Customs Port and the office of Almazergienbank, which offers exclusive financial products for our customers. It is clear that, just like in the case of the KGK factory, the creation and subsequent operation of these entities would be meaningless without servicing the flow of rough diamonds. So, ALROSA is today the locomotive of industry activity not only in the Republic of Sakha, in the Arkhangelsk region, Smolensk, Barnaul, Moscow, but also in Primorye.

If we compare the working conditions of ALROSA's office in Israel with the conditions in which the ALROSA trading platform is operating in Vladivostok, then, of course, each has its own specificity. In Israel, we worked and lived in a tight environment of diamantaires - Israeli, Indian, Belgian. Our office on the 20th floor of the Maccabi building - one of the buildings of the Israel Diamond Exchange - resembles one of the bee cells in a large hive. The exchange is a huge complex where all the organizational and economic troubles lie on the shoulders of the exchange administration, while we and our customers have a possibility to do our diamond business and everything connected with it without any hindrance, maintaining negotiations, organizing tenders and auctions, sending and receiving goods, dealing with banks, accountants and auditors, with the Diamond Controller, with the Diamond Exchange administration and with the management of the Diamond Manufacturers Association.

The infrastructural platform in Vladivostok - the Eurasian Diamond Center - is quite young, and it still has to prove its economic viability. This project should bring profit and open new prospects and opportunities for all its players, including ALROSA. This can only be achieved through laborious and professional work, focusing on what brings tangible results today or tomorrow, not in a year or ten years. The main problem so far is that Primorye lacks those rich traditions and broad infrastructure that exist, for example, in Israel. Therefore, together with our partners, we will strive to create a community of people in Primorye, who will be engaged the diamond business professionally. The basic prerequisites for this have already been established. There is a trading platform and the first diamond manufacturing factory has been opened in the area, we started to train personnel for the diamond industry, the visa issuance procedure has been seriously simplified, tax privileges and preferences have been introduced for the stakeholders of the Freeport of Vladivostok.

In your opinion, what are the main principles of diamond business?

Diamond business is based on unconditional trust and decency. Diamantaires do not like airy promises, arrogance and showing-off. Honesty and mutual respect are valued here as high as the diamonds themselves. Perhaps, this is because most of the Indian and Israeli businessmen are deeply religious people. Another important point, in my opinion, is the sincere need to realize yourself as a part of the worldwide industry "family." It disciplines diamantaires and helps to avoid mistakes. In practice, this is manifested in the observance of the business traditions fixed in the regulations of diamond bourses in all the leading world diamond centers. After all, all this "cements" the industry and increases its resilience to crises.

What is the credo you follow in your work?

Always be honest with yourself and others and act according to truth.

Galina Semyonova for Rough&Polished