ALROSA said its Supervisory Board has approved the company's Sales Policy Concept for 2018-2020 which outlines its continuing adherence to rough diamond sales based on three-year contract periods.
"The practice of long-term contracts, being implemented by the company since 2009, has repeatedly proved its efficiency. It ensures sustainable employment for the seller and the buyer, and protects them from price volatility in the diamond market. Therefore, long-term contracts will remain the key sales channel for ALROSA, their share in the volume of our sales will remain at the current level of about 70 percent," said ALROSA Vice President Yury Okoemov.
“As to long-term contracts, the company is planning to switch over to annual mutual approval of the volume and assortment within three-year contracts. The existing contracts stipulate for the monthly volume and assortment of purchased goods for the entire three-year period ahead. A switch to annual planning will allow both the company and its customers to respond more flexibly to any changes in the market.
“Today, ALROSA has long-term contracts for the sale of gem-quality rough diamonds with 47 companies from the international market, and nine companies from the domestic market. There are also three long-term contracts with domestic companies for the sale of industrial diamonds. The new contract period will start on January 1, 2018. Upon approval of the Sales Policy Concept, the company will proceed to forming new contracts and the list of long-term customers for 2018-2020.”
The Sales Policy Concept also includes initiatives to develop its polished diamond trade, the firm said. The company's affiliate, DIAMONDS ALROSA, is the second-largest cutting and polishing facility in the country. The company is planning to increase the share of cutting and polishing of special-size and fancy-colored rough diamonds, increase the share of sales in large diamond-consuming centers, including via ALROSA's foreign-based trading companies.
The Supervisory Board meeting also noted the need to implement marketing initiatives, primarily large-scale programs of generic marketing, for maintaining and strengthening consumer demand for diamond jewelry that encourages demand for rough diamonds. ALROSA was one of the co-founders of the Diamond Producers Association in 2015.