Composition of the Far Eastern Diamond Cluster
The Far Eastern Diamond Cluster includes (Fig. 1.):
1. Diamond-mining companies of ALROSA Group:
ALROSA;
ALROSA-Nyurba;
Almazy Anabara;
Nizhne-Lenskoye.
2. Diamond manufacturing entities of the Republic of Sakha (Yakutia)
Diamond cutting industry of Yakutia
According to the Guild of Diamond and Jewelry Manufacturers of the Republic of Sakha (Yakutia), there were 10 diamond cutting factories and one individual entrepreneur in Yakutia in 2014:
Yakut Diamond Company (its share in total production is 41%);
DDK (31%);
Sakha Diamond (9%);
EPL Diamond (9%);
Tunalgy (5%);
Komdragmetall RS (Ya) (4%);
Choron Diamond (0.4%);
Kristall-99;
Sole Proprietor Markov L.V.;
Grigori;
Kimberlite.
All the above factories operate in the City of Yakutsk. Two factories stood idle: Nyurbinski Jewelry Making and Diamond Cutting Factory and Pokrovski Diamond Cutting Factory. Diamond production and sales posted by Yakutia’s manufacturers in 2006-2015 are given in Table. 1.
Table 1
Performance of diamond cutting industry in the Republic of Sakha (Yakutia) in 2006-2015
3. Jewelry manufacturers in Yakutia and in the Far East of Russia.
The jewelry industry of the Republic of Sakha (Yakutia)
According to the Ministry of Industry of the Republic of Sakha (Yakutia), jewelry was produced by 12 companies and 22 individual entrepreneurs:
Yakut Diamond Company (its share in total production reached 37%);
EPL Yuvelir (11%);
Dragotsennosti Yakutii (18%);
Zoloto Yakutii (4%);
Sakha Taas - Yakutsk;
Kierge;
Standart;
Zvezda Yakutii;
Sakha Taas;
Sakha Stil;
GBPOU RS (Ya) STK;
Mamont VG;
individual entrepreneurs in Yakutsk, and in the Aldanski, Tattinski and Churapchinski Districts.
Jewelry production and sales posted by Yakutia’s manufacturers in 2006-2015 are given in Table 2.
Table 2
Performance of jewelry industry in the Republic of Sakha (Yakutia) in 2006-2015
Thus, the trends noted in the development of the diamond cutting and jewelry making industries in the Republic of Sakha (Yakutia) show that currently these industries are in a state of crisis. This is due to low profit margins in diamond manufacturing (which reached 2% or 3% in 2014, according to ALROSA) suppressed by high rough prices; lack of working capital experienced by diamond and jewelry manufacturers caused by a high level of lending rates imposed by commercial banks, as well as by a drop in demand in the global luxury markets.
4. Diamond selling entities:
Diamond Sorting Center of ALROSA (in Mirny);
The Yakutsk Diamond Trading Enterprise (YaPTA), a subordinate unit of the United Selling Organization (USO) of ALROSA;
Diamond Exchange (Vladivostok).
5. Training of personnel for diamond-mining, diamond-cutting and jewelry industries:
HR Training Center of ALROSA;
North-Eastern Federal University named after M.K. Ammosov;
Far Eastern Federal University.
Fig. 1. Far Eastern Diamond Cluster
Prospects for the effective development of the Far Eastern Diamond Cluster include:
1. Establishing a diamond exchange in Vladivostok, which will improve the competitiveness of diamond-mining, diamond-cutting and jewelry industries of the area. The Far Eastern Diamond Cluster will be an inter-regional and inter-industry cluster.
2. Diamond output in Yakutia is expected to go down to 32-33 million carats in 2016-2017 due to a slowdown in the economy and weaker demand for rough in the world. Still, Yakutia will account for the bulk of Russia's diamond production. This will allow ALROSA Group to maintain the existing level of prices for rough diamonds in the global diamond market, and generally maintain flat its overall rough sales in US dollars, while increasing its sales in rubles.
3. Creation of a diamond exchange in Vladivostok will provide additional opportunities for diamond manufacturers in Yakutia to increase sales and attract investments.
Yuri Danilov, Ph. D., CEO of the ‘Expert’ Information and Analysis Center at Ammosov North-Eastern Federal University
