Alrosa Braces for Large Sales Decline

In an interview to the Financial Times, the Russian state-owned diamond mining company, Alrosa, acknowledged that sales are estimated to fall short by approximately 30 percent this year. According to Alrosa, the drop is linked to the global economic crisis.

The company's Vice President Sergei Oulin was quoted as saying, "This is a very difficult time for us, but we will try our hardest to meet our targets." Oulin was interviewed in Yakutsk, the capital of the Yakutia region in Siberia where nearly all of Alrosa’s diamond production is handled.

In the first half of 2009, Alrosa sold rough diamonds totaling just $351 million, a huge difference compared to the 2008 figures, which totaled $2.9 billion. However, the company is planning to increase its sales figures substantially in the second half of the year, with increased sales and the help of the Russian state treasury—by selling to it as well. In all the company expects revenues to add up to $2.1 billion for the year.

Oulin went on to say that prices for rough had been cut by approximately 15 percent. The remainder of the sales declines is attributed to lower sales figures.

Oulin's comments were echoed by the new president of Alrosa who reiterated the company's stance that it will not flood the market with excess stock of rough diamonds or offer deep discounts as part of its marketing.