Rough&Polished: APL Diamond is the largest and oldest manufacturer of Yakutia diamonds rated as the third exporting company in Russia (after Kristall of Smolensk and Ruiz Diamonds). This year only, the company opened nine jewelry boutiques under the title “Diamond House” selling Yakutia diamonds in Moscow, Yakutsk, Mirny, Ulan-Ude and Novosibirsk, as well as the first Russian Boutique in Shanghai (China) and it plans to open 80 corporate jewelry boutiques in the nearest five years all over the world.In the world market, the diamonds made by APL Diamond are certified by the GIA as “Triple Excellent”, “Double Excellent” and “Very Good-Very Good”. Starting from the last year, APL is developing several jewelry lines: “classic” (with large-size gems), “glamour” (fashionable design), “ethno” (Yakut ethnic themes) and “luxury” (with unique diamonds up to 6 carats).
The last exclusive collection of diamonds made by APL Diamond and named “Blazing Ice” (Tatyana Navka, an Olympic Champion and a star of the “Ice Age” TV Show has been chosen to be its face) is distinguished for its cutting, which produces maximum light reflection - “The Heart and the Arrow” effect (if you view it through the lens from the top, you will clearly see 8 arrows; and if you view it from the bottom, you will see 8 hearts). The diamonds were given a high mark at the Moscow Exhibition of the Russian Guild of Jewellers at the Manege; they are advertised by the “Cosmo”, "ELLE" and “Officiel” magazines.
Pyotr Fyodorov, APL Diamond CEO, has been at the helm of this company from the date of its incorporation. He is also a Member of the Israel Diamond Exchange from 1997, a Member of the Shanghai Diamond Exchange from 2005 and a Member of the Diamond Council under the President of the Republic of Sakha (Yakutia).
- APL Diamond is considered the most successful cutting company in Yakutia. What were the reasons, that it was you, who managed to withstand rather difficult competition?
- We are one of the oldest Yakut cutting factories and we are working in this market for more than 15 years. The Yakut cutting started on a patriotic wave, but to survive it was essential to understand the importance of real professionalism in due time. I am a physician by my basic education, but I have profoundly and thoroughly studied diamond sorting, diamond production and evaluation techniques, as well as regional and international marketing. It is impossible to become an expert in our business in the course of two or three months, you have to spend some years. Learning should be permanent and you should always feel the pulse of the market and know how to predict its trends. I made myself, my employees do it, and this was how we achieved our success.
- One of the major reasons behind the success of your cutting business is your access to high-quality rough diamonds. What kind of rough sources are available to APL Diamond and can these sources be a competitive edge to your company?
- We are a permanent client of ALROSA, we are its oldest and, as I believe, the most reliable client in the territory of this Republic. We maintain working, business relations. They are based on respect. However, we have no preferences as compared with other ALROSA clients. Rough diamonds supply is indeed the most important matter for the fate of a cutting factory. We can understand those people, who are critical of ALROSA because it introduced an 18% VAT for diamonds sold in the domestic market. At the same time, we can understand the position taken by this company, which every year lost a lot of money due to this “preference”. From our point of view, this conflict may be successfully solved by introducing a “zero” VAT rate for domestically sold rough diamonds.
- You have spent three years in Israel. Which is the most attractive feature of the Israeli diamond business in your opinion?
- Tradition and family business. It our business it is very important to pass your experience in the course of several generations. The example of Israel teaches us to cherish your own roots. When I went into diamond business, I was able to appreciate it in a worthy way that my great-grandfather and my grandfather had been jewellers – goldsmiths. My grandfather was killed during the war and this line was broken. However, my elder brother is already engaged in diamond business. My younger brothers have made a ring with a tiny diamond for our mother. They are trying to make their first steps on this road. This is a normal way to develop diamond business – it should be family business.
- Recently, you returned from China. What are your impressions about the promising Chinese market?
- The Chinese market is rather complicated. It is a large-volume market and undoubtedly, it will continue to grow, although it is already noted for quite tough competition. Within the medium and small product ranges there is a fierce fight going on between the local companies and the companies, which came from Hong Kong. All the well-known brands occupying the upper market segment have already moved to China. Therefore, there is no shortage of supply and you have to work hard to win your niche. The tax system is not so simple and local personnel have some problems related to production standards. The cheapness of labor is of course an important point but not decisive. China’s broad state protectionism practiced in relation to domestic capital is also a serious factor influencing the competitive environment. Russian business people may only feel envy about it.
- Do you think the Russian cutting industry needs additional support from the government?
- Think for yourself – in Russia, we spend from 5 to 8 working days to execute a diamond export deal. For our foreign competitors it takes just one hour. Is it right? The Russian cutting business is an export-oriented industry and we are turning out products recognized by the world market. Supporting such business should become a strategic task for our authorities and I hope it will be.
