Valery Morozov is the Chairman of the Board of Directors, Ruis Group of Companies. Being a holding company, Ruis Group has been operating in the diamond industry in the CIS territory. The company is structured as a vertically integrated holding, encompassing the companies engaged in diamond mining and cutting, jewelry production and its own jewelry retail chain. Ruis GC is affiliated with the international holding Leviev Group of Companies (LGC). The Group's activities in Russia started as far back as in 1990 with setting up Ruiz Diamonds Joint Venture on a parity basis with LGC and Glavalmazzoloto (General Department for Diamond and Gold Mining). Nowadays, the structure of Ruis GC comprises the following enterprises: Ruis Diamonds Lapidary Works, Moscow Jewelry Factory (jewellery production and sale), and Uralalmaz Diamond Enterprise.
It is already a year since the diamond- and-jewels market has been going through the crisis. Do you see any tendencies for recovery?
Definitely, the situation is currently improving, but mainly in the raw stock market. The diamond market, however, is still falling behind, but we hope it will soon see its recovery too.
Which factors can contribute to the market recovery?
As far as it goes to diamonds, we all look with expectation for ebullience in the USA.
How do changes in the raw stock prices affect the value of diamonds?
Regrettably as it is, but the raw stock prices have been cut adrift from the realistic prices for diamonds, so they currently show much less consistency than the cutters would like to see.
Which classes of diamonds are enjoying the greatest demand?
Basically, these are gemstones of up to 1 carat with good characteristics.
Which countries can boast a steady demand for diamonds at present?
The demand is actually everywhere, the only question is that of volumes.
How are things currently going in Ruis Diamonds?
We continue our business, though the volumes have naturally decreased. The main obstacle for a normal operation is a yet unregulated issue with VAT and those extremely high prices for diamonds asked for by ALROSA. Therefore, it is more profitable for us to buy a major portion of diamonds abroad.
Do you experience any competition from Indian producers of diamonds?
Naturally, there is the competition. Over the past few years, the Indians have made a huge leap forward largely due to the support of the state, low interest credits and low costs.
Does your company plan to resume purchasing the raw stock from ALROSA?
Right, we have already started to buy diamonds though in small volumes as with the current prices of ALROSA there is quite a narrow segment, which can be cost-effective for processing in Russia.
The Government of Russian has been pursuing a protectionist policy with regard to the enterprises, having a significant share of the state property. For example, in the diamond industry it is ALROSA and Cristall in the city of Smolensk. It is known the enterprises of Ruis Group have received no state support. Wouldn’t this fact affect the operation of Ruis Diamonds in Russia?
We have no intention to close up our business, at any rate until we have a possibility of purchasing the raw stock abroad. Availability of highly qualified and skilled workers and the high production efficiency still allow us to maintain some competitive advantages. As for the state support, we believe it should be obtainable throughout the entire industry. Tackling the VAT issue and setting up more adequate prices for diamonds for the lapidary works operating in Russia could certainly revive the industry.
Rough&Polished
