(IDEX Online) - The diamond industry continues to reshape itself with the announcement that Alrosa is considering buying state-owned Kristall from the Russian Federation. The production corporation has been valued at RUB 1.886 billion ($29 million).
Kristall process over 200,000 carats of rough diamonds a year, of which 90 percent supplied by Alrosa.
After the consolidation, Alrosa's share in the Russian market could reach 70 percent.
While the deal has yet to be put to Alrosa's board, Alrosa CEO Sergey Ivanov expressed confidence that the merger would go through. "We are quite optimistic about the integration prospects and have already embarked on preparatory work to start joint operations in cutting and sales."
Looking to the future, Ivanov said the company intends to focus its efforts on developing new sales channels, including those in the US and Chinese markets, while also improving production efficiency.
"We expect that our efforts to merge our cutting facilities will help reduce production costs and, subject to a favourable market environment, take up a considerable share of the market for best in class polished diamonds."
If approved, the sale and purchase agreement is expected to be signed by the end of this month.