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ALROSA Opens Eurasian Diamond Centre; Signs Agreement With KGK Diamonds For Facility

Sep 06, 2016

In a couple of linked developments, PJSC ALROSA announced the opening of the Eurasian Diamond Centre in Vladivostok on September 2nd. On the next day (September 3) it also announced the signing of an agreement with KGK Diamonds (I) Private Limited to develop cutting and polishing facilities in the Centre.

The Eurasian Diamond Centre (EDC) project, based near the Free Port of Vladivostok envisages the setting up of a cluster of diamond  companies which will conduct  export-import operations with Asia-Pacific countries – starting with  China, India, Japan, and South Korea.

The companies based in the EDC will include those engaged in diamond mining and sale; manufacturers of polished diamonds and jewellery; gemmological laboratories; banks; insurance companies; specialised carriers; customs brokers  and various state authorities like   customs   and state control experts.

“Creation of the cluster will be financed by investments from the companies seeking the placement of their manufacturing and service facilities on the territory of EDC,” ALROSA said.

“The project seems very promising, given the pace of development of Asia-Pacific countries and potential size of the market,” commented ALROSA President Andrey Zharkov. “Preferences and privileges granted on the territory of Vladivostok can potentially contribute to the development of production plants that use gem-quality and industrial-grade rough diamonds both for cutting and manufacture of import-substituting tools with natural rough diamonds”.

Hot on the heels of the announcement of the launch of the EDC, came the news that ALROSA had signed an agreement with KGK Diamonds (I) Private Limited. 

“Under this agreement, ALROSA will assist KGK in the creation of a diamond cutting company on the territory of the Diamond Centre in the Far East, and will supply rough diamonds to the company taking into account the existing long-term obligations to other buyers,” ALROSA said in its announcement.

KGK has been a buyer of ALROSA’s untreated natural rough diamonds since 2008. “Annual purchase of ALROSA’s natural rough diamonds by KGK Group for the manufacture of polished diamonds in Russia and abroad exceeds USD 200 million,” ALROSA said.

On its part, KGK is committed to creating a “legal entity”, and conducting cutting and polishing operations with all that it implies, and including training and hiring of staff.

“The creation of KGK’s new cutting and polishing facilities in Vladivostok is planned in July 2017,” ALROSA announced. “As it is planned, the new plant will reach its design capacity (cutting of not less than 15,000 carats of natural rough diamonds per year) within the period of 4 years from the start of operations. In the first year of operation, the headcount of the new company will be 150 employees, and it will go up to 500 in subsequent years.”

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