3-Year Long-Term Contracts Remain Key For ALROSA 2018-20 Sales Plan

ALROSA announced that its supervisory board, at a meeting on October 26, drew up its Company Sales Policy Concept document for the 2018-2020 sales period, keeping unchanged, its policy of long-term sales contracts with select customers.

Company Vice President Yury Okoemov said in a press note, “Long-term contracts for the sale of rough diamonds with large trading, cutting and jewellery companies for up to three years are the keystone of ALROSA’s sales.”

Okoemov elaborated, “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.”

He added, “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.”

ALROSA is, however, planning some changes to the long-term contracts and will over to annual mutual approval of the volume and assortment within three-year contracts. Observing that the existing contracts stipulate for the monthly volume and assortment of purchased goods for the entire three-year period ahead, the press note said that a switch to annual planning will allow both the company and its customers to respond more flexibly to any changes in the market.

ALROSA said it currently has long-term contracts for the sale of gem-quality rough diamonds with 47 international and nine domestic companies. 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 press note said, the company will proceed to forming new contracts and the list of long-term customers for 2018-2020.

Apart from long-term contracts, ALROSA sells rough diamonds in almost equal shares at auctions and under spot contracts.

The Sales Policy Concept also includes initiatives to develop a polished diamond trade. So far, the company’s DIAMONDS ALROSA affiliate is the second largest cutting and polishing facility in the country. ALROSA  is planning to increase the share of cutting and polishing of special-size and fancy-coloured rough diamonds and increase the share of sales in large diamond-consuming centres, including via ALROSA’s foreign-based trading companies.

The board meeting noted the need to implement marketing initiatives, primarily large-scale programs of generic marketing, for maintaining and strengthening consumer demand for diamond jewellery that encourages the demand for rough diamonds.

For more information visit hear : https://www.gemkonnect.com/news/3-year-long-term-contracts-remain-key-alrosa-2018-20-sales-plan

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