According to Sakhalife.ru, the participants of the meeting convened on December 8 and attended by Gennady Alekseyev, First Vice Premier of the Republic of Sakha (Yakutia) discussed the EPL Diamond Group’s tentative production results and the company’s economic activity in 2010 as well as its short-term plans.
Special consideration was given to improvements to be achieved in sales policy, output and competitiveness of goods.
The meeting was also joined by the representatives of Yakutia’s ministries and the Diamond Council controlled by the President of the Republic of Sakha (Yakutia).
The EPL Diamond Group established in 1994 currently comprises three operations engaged in diamond-cutting, jewelry production and sales. The Group’s total manpower is over 400 employees.
According to Sardana Vassilyeva, the company’s financial director, the targets set for 2010 will be completed. For the period of 9 months, EPL Diamond’s polished output amounted to $54.653 million and by the end of the year it will make $65 million versus $63.447 million planned. This year, the company is expected to sell RUB2.5 billion worth of polished diamonds and RUB1 billion worth of jewelry. The Group will pay RUB106.5 million as taxes to Yakutia’s local budget. S. Vassilyeva noted that EPL Diamond succeeded in keeping its labor force and market share in spite of the economic difficulties triggered by the world crisis.
At present, EPL Diamond’s production accounts for 41% of the total polished diamonds and jewelry produced in Yakutia. Particular attention is given to the quality of goods and their range. It should be noted that the company’s retail network runs 15 boutiques, including those seated in large cities of Russia.
As per the company’s mid-term production plan, diamond cutting and jewelry manufacturing will reach RUB10 billion by 2015. It will result in additional 700 jobs, while the company’s tax contribution to the national budget will amount to about RUB648 million.
The global financial and economic crisis had a negative impact on the company’s performance in 2009. The targets of the previous year have not been completed in many fields because of lack of rough diamonds due to ALROSA’s sales policy, lower demand for polished diamonds and EPL Diamond’s financial resources. Yakutia’s government lent substantial assistance granting the company RUB500 million of state guarantees in the autumn of 2009 to give it a chance to defer payments due for rough diamonds. These measures have been extended up to the end of 2011. This enabled EPL Diamond to restore manufacturing of polished goods to the pre-crisis level, preserve jobs, organize recruitment and training of diamond cutters and refurbish manufacturing equipment.
At the same time, the main problems facing the enterprise are insufficient circulating assets, delayed VAT refunding for rough diamonds from the national budget, higher costs for materials used in production.
In the course of the discussions at the meeting, Vice premier G. Alekseyev placed the emphasis on the company’s sales policy. Taking into account that EPL Diamond is now among the leaders in Yakutia’s diamond cutting and jewelry industry, it is necessary to raise output, which will strengthen its financial situation resulting in a higher tax inflow for Yakutia, including VAT payments. The quality of goods is of major importance, as well as their higher competitiveness and a wider retail network. “As practice shows, today the ‘Yakut diamonds’ brand is in great demand as well as many other products made in Yakutia, and we should seize the opportunity through a right advertising campaign and applying the results of marketing research and entering new markets,” he said.
On the whole, EPL Diamond’s performance was evaluated as positive. Based on the results of the meeting, it was decided to analyze particular problems, including VAT refunding for purchased rough diamonds and ways to increase the efficiency of government assistance.
