In September 2010, the Republic of Sakha (Yakutia) was an active participant at World Expo 2010 in Shanghai. Visitors to the Russian Pavilion at Expo 2010 will remember the Yakut exposition which displayed diamonds in kimberlite, excellently cut diamonds, gold bullions of unusual shapes and other exhibits brought from the Treasury of the Republic of Sakha (Yakutia). Development of the diamond-cutting industry is one of the priorities pursued by Yakutia’s government, and this is why the business part of the Yakut delegation at Expo 2010 in Shanghai included representatives of jewelry companies. On the eve of the Day of the Republic of Sakha (Yakutia) in the Russian Pavilion at Expo 2010 Sergey Neustroev, Yakutia’s First Deputy Minister of Foreign Affairs, answered the questions posed by Rough&Polished.
The exposition of the Republic of Sakha (Yakutia), which was on display at the Russian Pavilion from 5 to 19 September, was one of the most vivid and memorable regional expositions in the national pavilion during the entire period of World Expo 2010 in Shanghai. Rough and polished diamonds brought from Yakutia were an important part at this exhibition. Does it mean that your republic is planning to expand its supply of jewelry products to China?
On September 18, the Russian Pavilion held a presentation of the Republic of Sakha (Yakutia) at Expo 2010, for which we had been waiting for a long time and which took much effort to prepare. The head of our official delegation, Yakutia’s Vice President Dmitry Glushko, delivered a report entitled "Yakutia, a unique area of the planet", in which he described the investment projects of the Sakha Republic, basic information about the region and current state of its economy.
Speaking of the diamond cutting industry, it should be said that diamonds were mined in Yakutia since the Soviet time. Up to the 90s we were just mining diamonds, while in the early 90s we started to process diamonds in situ. This was followed by a rapid growth in this field bringing about new diamond cutting factories. Currently, due to objective reasons, such as the falling market and global financial crisis, the situation in our diamond industry is not very favorable. However, the market is gradually getting on its feet and we have big plans for developing diamond-cutting production in our republic. We have big companies, in particular, EPL Diamond, which is the largest diamond cutting business in the Republic of Sakha (Yakutia) supplying famous Yakut diamonds in Russia and abroad. This company has an office in Shanghai, and it also takes part in the exposition of Yakutia at Expo 2010 in Shanghai. There are other companies as well, and we hope that things will go better with them. For this purpose, we have brought Yakut diamonds to the Universal Exhibition. We want to show them to a wider audience, we want to present them and prove that we have a diamond cutting industry and it has a great future.
Are the diamonds which are exhibited at Yakutia’s exposition genuine?
Yes, from September 18 we exhibited genuine diamonds.
Are there other jewelry companies in Yakutia’s delegation, besides EPL Diamond, which are interested in expanding cooperation with Chinese partners?
A direct charter flight from Yakutsk brought here representatives of our business community, including jewelers, power engineers, and people working in the field of health care, agriculture and other industries. From 20 to 25 September, they held meetings and discussions with colleagues and potential partners in China. The business program also included visits to the Shanghai Diamond Exchange and Shanghai Gold Exchange to promote Yakutia’s jewelry industry in China and Asian markets.
What do you think, was Yakutia’s exposition in the Russian Pavilion a great attraction for visitors to EXPO 2010?
Yes, I can say that our exposition got very good foot traffic and we feel that people are interested to see it. We hope that the presentation held by the Republic of Sakha (Yakutia) will attract more potential partners and investors and will enhance our cooperation with China.
As far as it is known, there are plans to establish a special economic zone for the diamond industry in the Republic of Sakha (Yakutia). At what stage is this project?
The documents are ready, and now this project is being harmonized at the federal level. We have examined our strong and weak points in comparison with other countries engaged in the same business. As it happens, our goods and money have a very long turnover. Starting from purchasing raw materials and processing diamonds to selling finished products and receiving proceeds - the term is very long. We have to clear customs in Moscow, so our operating cycle is a long one. Previously, there was a customs terminal in Yakutsk, but now it is closed. We would like to make it possible that this customs terminal be returned to Yakutsk, so that we could accelerate business processes. Compared to foreigners we are losing in the first place by operating time. We need a special economic zone just to make diamond processing very mobile and to export polished diamonds from Yakutsk.
Does the government of Yakutia intend to attract Chinese investors to this economic zone?
I cannot say anything definite about attracting Chinese investors in the zone, but I think that for us it would be of interest. The special economic zone will have tax remissions introduced in accordance with the Russian legislation.
China is also proactively developing diamond cutting, and the cost of this processing in China is cheaper than in Russia. Therefore, we are mulling to have small-size diamonds processed in China.
What Yakut jewelry companies have representation offices in China, besides EPL Diamond?
The Committee for Precious Metals and Precious Stones of the Republic of Sakha (Yakutia) has its representation there and another one is being opened by Zoloto Yakutii. So far there are three such offices.
What kind of results would you like to have from participating in Expo 2010 in Shanghai?
We would like to position ourselves as a dynamic region with great prospects, as well as to see others. We are taking our businesspersons, so they can see other expositions because this is an exhibition of world-level achievements. We also hope that business contacts that are tied up in the framework of our participation at Expo 2010 will promote trade and economic relations between the Republic of China and the Republic of Sakha (Yakutia).
Olga Patseva, Editor of the Rough&Polished Asian Bureau in Shanghai
