Alrosa to Restructure Manufacturing Business

RAPAPORT... Alrosa's supervisory board has approved a three-yearstrategy for its cutting-and-polishing divisions, including the integration of newacquisition Kristall. The plan, which it will implement between 2020 and 2022,will improve the efficiency of the Russian miner's cutting andpolishing units, Alrosa said Monday. The strategy includesmeasures 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, withfancy-colored and large colorless diamonds sent to Moscow for cutting, whileKristall will manufacture colorless diamonds between 1 and 10 carats inSmolensk. Small diamonds will head to Alrosa's factory in Barnaul, as well asto Kristall, for processing. Alrosa's three units will cut over 200,000 carats ofrough per year, accounting for more than 60% of manufacturing in Russia. The miner will also begin transferring employees fromKristall's sales team to its Diamonds of Alrosa division, which will sell all polished stones. "The merger of diamond-cutting platforms will make itpossible to reduce production costs and get a stable market share for polisheddiamonds with Russian origin marked by a high quality of cutting," said AlrosaCEO Sergey Ivanov. Image: Kristall polishing factory. (Kristall)