According to the Il Tumen Daily, Pyotr Fyodorov, Deputy of Yakutia’s Parliament (Il Tumen) and Chairman of its Standing Committee for Economic, Investment and Industrial Policy, Entrepreneurship and Tourism, told the Interregional Conference of the United Russia Party held in Khabarovsk about the Project called “Development of Diamond Cutting and Jewelry Manufacturing Cluster in Yakutsk”.
The main aim of the Project is to diversify the regional economy and strengthen the role of the Russian Federation in the global diamond and jewelry market. To achieve this goal it is necessary to complete the following tasks: to increase the share of Russian products on the world’s market of polished diamonds and jewelry, to use natural resources in an efficient manner, to develop human resources raising the standard of living, and to retain population in the Far Eastern Federal District, Russia’s outpost in the Asia Pacific Region.
The Project comprises production facilities (diamond cutting and jewelry factories, furniture, tanning and fur enterprises, auxiliary facilities and services), office buildings (offices of the managing company and those of the State Assay Supervision Inspection for the Republic of Sakha (Yakutia), a gemological laboratory, a diamond exchange, a jewelry fair and exhibition centre, bank branches, consultancies, legal, auditing, insurance and other agencies), a specialized customs office, outside and inner infrastructure facilities and manufacturing equipment.
The total project cost amounts to RUB 3,266.3 million, including investments running at RUB 2,601.4 million, as well as funds allocated for this purpose from the budget of the Republic of Sakha (Yakutia) – RUB 664.9 million.
There are more than enough prerequisites for a successful development of this Project - century-old traditions of the Yakut jewelers, state-of-the-art technologies, a prominent design school, skilled personnel, and available mineral raw materials, but the main thing is that there are diamond cutting factories operating in Yakutsk and recognized by the Russian Federation Ministry of Industry and Trade as outstanding Russian exporters.
At present, the Yakutsk diamond cutting factories are manufacturing top quality polished diamonds, Triple Excellent, and diamond cutting operations involve 637 jobs. It is expected that in 2010 polished output will reach RUB 5,250.0 million.
There are 612 persons employed at the Yakutsk jewelry factories. The 2010 jewelry output forecast runs at RUB 1,136.0 million.
Jewelry pieces graced with Yakut polished diamonds won the recognition at national and international exhibitions. There are 73 boutiques established by Yakut factories and operating in this country and abroad.
The factors which are restraining the development include the cumbersome and time-taking customs procedures, as well as lengthy VAT refunding to exporters. To speed up the development of the cluster, it is necessary to simplify and expedite VAT refunding, set up a customs office and business centre in Yakutsk, which will accommodate a gemological laboratory as well as the State Assay Supervision Inspection for the Republic of Sakha (Yakutia), offices of auxiliary production facilities (equipment, tooling, consumables), bank branches, consulting, insurance and other firms.
The Project is to be implemented in 2010-2012. The main investors are EPL Diamond, Zoloto Yakutii, Choron Diamond, Yakutskaya Almaznaya Kompania, Kristal-99 and other companies.
The expected benefits from the Project include diversified economy and increased polished output reaching up to USD 1.3 billion, as well as jewelry production boosted to USD 1.1 billion; a larger share of Russia in the global polished output exceeding 10 percent, as well as diamond jewelry production pushed up to 5 percent of the global output. The Project will also help to decrease the manufacturers’ need in working capital almost twice due to funds freed from VAT payments and will cut administration costs due to customs procedures transferred to Yakutia.
