Alrosa to Restructure Manufacturing Business

RAPAPORT… Alrosa’s supervisory board has approved a three-year
strategy for its cutting-and-polishing divisions, including the integration of new
acquisition Kristall.



The plan, which it will implement between 2020 and 2022,
will improve the efficiency of the Russian miner’s cutting and
polishing units, Alrosa said Monday. The strategy includes
measures aimed at optimizing the product mix and production cycle, and introducing a single sales system for all polished diamonds.
The miner will also create a position in the company for manufacturer Kristall,
which Alrosa purchased from the Russian government in October for $29 million.


Alrosa will redistribute its mix of rough diamonds, with
fancy-colored and large colorless diamonds sent to Moscow for cutting, while
Kristall will manufacture colorless diamonds between 1 and 10 carats in
Smolensk. Small diamonds will head to Alrosa’s factory in Barnaul, as well as
to Kristall, for processing. Alrosa’s three units will cut over 200,000 carats of
rough per year, accounting for more than 60% of manufacturing in Russia.


The miner will also begin transferring employees from
Kristall’s sales team to its Diamonds of Alrosa division, which will sell all polished stones.


“The merger of diamond-cutting platforms will make it
possible to reduce production costs and get a stable market share for polished
diamonds with Russian origin marked by a high quality of cutting,” said Alrosa
CEO Sergey Ivanov.


Image: Kristall polishing factory. (Kristall)