Alrosa Wants to Sell Internationally On Its Own
October 25, 04
Alrosa, the Russian diamond monopoly, said today that it wants to move forward with plans to market its rough diamonds to the global market on its own, but still hopes the EU will approve its deal with De Beers.
Valery Novikov, Head of Alrosa’s Public Relations and Advertising Department, told the Russian news agency Prime-Tass the plans are in accordance with the company’s new sales program approved by its board last Friday.
If the company does indeed move forward with the plan, it will require that it have independence in making distribution, marketing and advertising decisions, but more importantly sales decisions. Current laws are limiting Alrosa’s independence in making such decisions.
It will probably be a while before new laws are passed, so it comes as no surprise that in the mean time Novikov is expressing hopes that the European Union will approve its current five year, $4 billion deal with De Beers signed in December 2001.
”We hope that this agreement will be eventually approved,” he told the news agency, adding that Alrosa plans to renew the agreement in 2006.
And that is probably the key point. If the EU does not approve the deal Alrosa will probably move forward with these plans at a quicker pace. If however the agreement is approved, they will be delayed if not set aside altogether.
It should be noted that while negotiating with De Beers on the agreement in 2001, Alrosa said on a number of occasions, perhaps as a negotiation tactic, that it is planning to open offices in the key global diamond centers and start marketing its rough diamonds on its own.
In any case, some of the plans are already in place, for example, the company holds periodic auctions of goods bigger then 10.8 carats. These auctions are open to invitees only, and a big number of them are non-Russian.