ALROSA Fortifies Global Diamond Partnerships with Strategic Client Expansion

As the world’s undisputed leader in diamond mining, ALROSA consistently shapes the global diamond landscape through its strategic sales policies and robust partnerships. In a significant move to strengthen its market position and diversify its client base, ALROSA announced a notable expansion of its long-term customer list in 2019. This expansion took place within the framework of the company’s crucial three-year contract period spanning 2018-2020, underscoring a proactive approach to fostering enduring relationships in the competitive diamond industry.

The core of ALROSA’s sales strategy lies in its long-term contracts, which provide stability and predictability for both the company and its trusted partners. This commitment to long-term collaboration was further solidified as six prominent companies, previously participants in the esteemed ALROSA ALLIANCE and candidates for long-term agreements since early 2018, officially achieved long-term customer status. This elevation signifies their consistent trading activity, reliability, and commitment to the diamond sector.

Reinforcing Global Reach: Diverse Additions to the ALROSA ALLIANCE

The new additions reflect ALROSA’s expanding global footprint and its focus on key consumption and manufacturing hubs. Among the esteemed new long-term clients are industry giants such as Chow Sang Sang Jewellery from China, a pivotal market for polished diamonds and finished jewelry. From India, a powerhouse in diamond cutting and polishing, three significant players joined the ranks: Kapu Gems, Mohit Diamonds, and VD Global. The addition of M. Suresh Company, based in the United Arab Emirates, further highlights the strategic importance of the Middle East as a trading and distribution hub for rough diamonds.

Significantly, Richold SA, a reputable company from Switzerland, appeared on ALROSA’s long-term customer list for the first time. This inclusion underscores ALROSA’s appeal to diverse international markets and its ability to attract high-caliber partners from established financial and trading centers. With these new incorporations, ALROSA now supplies exquisite gem-quality diamonds under an impressive 59 long-term contracts, a testament to its unparalleled supply capabilities and the high demand for its products. Additionally, the company maintains 10 long-term contracts specifically for technical diamonds, catering to a distinct segment of the industrial market.

Beyond solidifying existing relationships, ALROSA is also actively cultivating future partnerships. Two prominent Belgian companies, H.D. Diam BVBA and IGC Group NV, previously spot clients, have now been named candidates for potential long-term agreements. They will enter into ALROSA ALLIANCE agreements, signifying a crucial step towards deeper collaboration. Belgium, particularly Antwerp, remains a vital global center for diamond trading and processing, making these new affiliations strategically important for ALROSA’s European market presence.

The Foundation of Success: ALROSA’s Long-Term Sales Policy

Evgeny Agureev, Member of the Management Board and Director of the United Sales Organization at ALROSA, articulated the strategic imperative behind these actions: “Long-term contracts form the basis of ALROSA’s sales policy, accounting for up to 70% of sales of diamonds mined by the company. We confirm the inviolability of ALROSA ALLIANCE principles and are interested in diversifying our client base, which has grown compared to last year. At the same time, we focus on confirmed manufacturers of polished diamonds and products with them.”

Agureev’s statement highlights several critical aspects of ALROSA’s vision. Firstly, the reliance on long-term contracts for the vast majority of sales ensures robust revenue streams and predictable demand, allowing ALROSA to manage its operations efficiently and plan for future production. Secondly, the company’s unwavering commitment to the ALROSA ALLIANCE principles reinforces its dedication to transparency, reliability, and ethical practices within the diamond supply chain. Lastly, the focus on diversifying the client base while prioritizing established manufacturers of polished diamonds and diamond products demonstrates a keen understanding of market dynamics and a strategic alignment with value-added segments of the industry. This approach not only strengthens ALROSA’s position but also supports the growth and stability of its partners.

Stability in a Dynamic Market: The Rigorous Selection Process

The process of becoming an ALROSA long-term client is rigorous and performance-driven. As Agureev further explained, “Since 2018, the company has a new three-year contract period. Following the results of the first year, we revised the list of long-term clients. Six companies, including the largest representatives of the jewelry industry, confirmed their trading activity, being the most effective of all candidates for inclusion in long-term clients list. At the same time, several companies dropped out from the list without confirming the effectiveness of their work with ALROSA.”

This transparent and merit-based evaluation process ensures that ALROSA partners with only the most active, reliable, and commercially effective companies. It fosters a competitive environment among candidates, encouraging consistent performance and a deep commitment to collaboration. The “effectiveness” criteria likely encompass factors such as consistent purchasing volumes, adherence to contract terms, market presence, ethical conduct, and financial stability. By periodically reviewing and refining its client list, ALROSA maintains a robust network of partners who genuinely contribute to the stability and growth of the global diamond trade.

The Prestigious ALROSA ALLIANCE: A Mark of Trust and Quality

All of ALROSA’s long-term customers are integral participants in the ALROSA ALLIANCE program. This exclusive program is more than just a contractual agreement; it’s a testament to a client’s standing within the global diamond complex. Companies under the ALROSA ALLIANCE acquire the coveted right to use the relevant ALROSA ALLIANCE logo. This logo is not merely a brand symbol; it serves as a powerful endorsement, confirming not only regular and consistent rough diamond supplies from ALROSA but also the client’s sterling reputation as a reliable, ethical, and trusted participant in the world diamond industry. It provides an assurance of quality and integrity to end-consumers and downstream partners alike.

The ALROSA ALLIANCE program represents a commitment to best practices, transparency, and sustainable development within the diamond supply chain. For ALROSA, it ensures that its diamonds are handled by responsible partners who uphold similar values. For the clients, it offers significant reputational benefits, enhancing their credibility and market standing, particularly in an era where consumers are increasingly conscious of sourcing and ethical practices.

The Value Proposition: Why Long-Term Contracts Matter in the Diamond Industry

The benefits of ALROSA’s long-term contracts extend far beyond mere transactional agreements, offering a robust framework for mutual growth and risk mitigation. For its clients, these contracts guarantee consistent volumes and a predictable assortment of monthly rough diamond supplies. This certainty in supply is invaluable for manufacturers and jewelers, enabling them to plan their production schedules, manage inventory, and commit to sales orders with confidence, thereby reducing operational uncertainties.

Furthermore, long-term partners gain the significant advantage of the possibility to purchase additional batches of rough diamonds, providing flexibility to respond to fluctuating market demand or specific project requirements. This form of close cooperation is a cornerstone of stability in the often-volatile global diamond market. It provides both ALROSA and its clients with stable supplies of high-quality rough diamonds, effectively shielding them from the sharp and unpredictable price fluctuations that can otherwise disrupt the market. By locking in supply and demand over extended periods, these contracts foster a more predictable and resilient diamond value chain, benefiting all stakeholders from mine to market.

Distinguishing Gem-Quality from Technical Diamonds

It is important to understand the distinction between gem-quality and technical diamonds, as reflected in ALROSA’s contract numbers. Gem-quality diamonds, making up the majority of ALROSA’s long-term contracts, are those suitable for use in jewelry due to their clarity, color, cut, and carat weight. These are the diamonds that capture the public imagination and drive the luxury market. Technical diamonds, on the other hand, possess industrial applications where their hardness and thermal conductivity are paramount. These diamonds are used in cutting tools, abrasives, and other high-tech applications, serving critical roles in various industries. ALROSA’s comprehensive approach to both segments underscores its versatility and full utilization of its mined resources.

Shaping the Future of the Diamond Industry

In conclusion, ALROSA’s strategic expansion of its long-term customer list in 2019 is a clear demonstration of its commitment to global leadership, market stability, and sustainable growth within the diamond industry. By fostering strong, long-term partnerships with leading companies across key markets in China, India, the UAE, and Switzerland, ALROSA is not only securing its own future but also contributing significantly to the health and resilience of the entire diamond value chain. The rigorous selection process, the prestige of the ALROSA ALLIANCE, and the inherent benefits of stable supply and demand under long-term contracts solidify ALROSA’s position as a visionary leader, driving transparency, reliability, and prosperity in the world of diamonds. This strategy ensures a steady flow of magnificent gems from the earth to consumers, maintaining the allure and economic importance of natural diamonds for generations to come.