As Alrosa’s country head, JIM VIMADALAL has played a key role in building bridges and strengthening ties between the mining company and Indian diamantaires. He discusses at length the long-term outlook for India.
Tell us about the Alrosa Representative Office’s journey in India so far.
Alrosa had opened its Representative Office in India in early 2018. The office does not conduct any trading activity and remains concentrated on strengthening Alrosa ties with Indian market. As the Director, I work on promoting Alrosa’s brand on the local market and helping existing clients. The office is responsible for interaction with India’s diamond industry organisations in various directions, such as opportunities for business development and studying consumer demand trends, as India not just plays a huge role in the global polishing business, but is also a promising diamond jewellery consumer market.
Since the opening of the representative office, Alrosa’s share of direct sales to India has grown by 1/3. Today each of the Indian origin customers whether from India, Antwerp, Dubai, etc. has developed a deeper and closer understanding with Alrosa. Continuous communication with each of our customers and regular interaction has strengthened the bonds of our partnership. As the global cutting and polishing centre, India processes more than 90% of all diamonds in the world, including Alrosa and we are constantly increasing our direct cooperation with all our Indian partners and also with GJEPC.
Alrosa’s new long-term Indian client list appears shorter than before. Does that affect Alrosa’s plans for growth in the country?
One of Alrosa’s main long-standing partners is India’s cutting and polishing industry. Many customers of the Alrosa Alliance community are companies based or founded in India.
We retain our commitment to developing our cooperation further. The year 2021 was difficult in terms of the supply. We believe that next year we will be able to make more offers to spot market clients, including those from India. Finally, we should stress that the current list of long-term clients is not a ‘closed club’ and there is plenty of opportunity for new clients to be added.
How did the Indian industry react to the flexibility in rough buying obligations by Alrosa throughout the pandemic?
Today, flexibility means efficiency. It is true for all parts of the global diamond value chain. I am delighted to say that most of Alrosa clients from India went through the difficulties together with the company and successfully switched to a more flexible model while being able to adjust to the changing environment. We are sad to Rough diamonds being prepped for the polishing process.
note that in 2020 we had to terminate several longterm contracts with companies that did not meet their obligations.
I should stress that Alrosa highly values all its clients and we shall continue working together at spot and competitive sales.
Can we get an update on GJEPC’s request to supply rough diamonds directly to the Indian MSME sector?
Alrosa trades natural diamonds under the set of regulations, approved at the corporate and state level, adhering to an equal approach to all counterparties. Under these rules, the company must meet a number of criteria to become a client, therefore Alrosa is not able to work directly with small-sized enterprises. However, we are always open for new opportunities. We are in a constant dialogue with our Indian partners. After this request from GJEPC we shall look for solutions that would be beneficial for the entire diamond value chain.
What is Alrosa’s long-term outlook for India?
Currently, we note that the Indian midstream sector is at an optimal level, as rough diamond consumption and polished output have managed to recover and even exceed 2017-2018 levels in just over a year. A number of factors have created a solid basis for the consistent and continued success of the diamond sector’s development in the coming year. We appreciate that one of these factors is, that our partners have completely adjusted to working in the difficult pandemic environment, still fulfilling all their obligations. Moreover, polished inventories have declined to optimal levels, and the industry has also started to rely more on its own revenue rather than bank loans. We believe that the strong demand for diamond jewellery alongside a limited rough diamond supply will help increase the price of polished diamonds further.