Oct 10, 2018

ALROSA Launches Initiative to Improve Efficiencies

ALROSA yesterday announced that it has launched “a project designed to reduce the extraction-to-market time lag”. The Boston Consulting Group was engaged to advise on the project.

“As part of the initiative to boost operational efficiency and improve business processes, ALROSA intends to streamline the distribution of rough diamond flows among its business units,” the Company revealed.

The project will generate proposals on how to improve the distribution of rough diamond flows inside the Company. Pilot projects will run until the year-end to reduce the cycle time; and a dispatch control system has been rolled out in the sales unit.

“These measures will enable ALROSA, by as early as the end of 2018, to decrease its work-in-progress inventories by over US$ 100 m as compared to the beginning of 2018 and increase the value of ready-for-sale goods,” ALROSA said.

The Company stated that at the beginning of 2018, the value of work-in-process diamonds stood at approximately US$ 700 million. “Currently, it takes an average of three months to complete the pre-sale diamond processing cycle, which encompasses all the stages from diamond delivery from the processing plant to the preparation of diamond boxes and the customer offering,” ALROSA elaborated.

Yury Okoyomov, ALROSA's Deputy CEO commented: "We joined forces with our advisors to carefully study all the movements of diamonds within the Company and find an opportunity to reduce the required time and labour inputs. The successful completion of this project will help us remove a significant portion of marketable goods from inventories to freely sell them in 2019.”