Oulin Talks about Branding, Angolan Goods, and Further Cooperation with De Beers
July 02, 07
Alrosa, perhaps sheepishly, views the custodian role in the diamond industry as up for grabs, now that De Beers has relinquished it. The Russian miner won’t say it outright, but vice president Sergey Oulin does have a very clear vision of what the custodian role should be. Not surprisingly, when asked about the shape of the company in the future, Alrosa fits the bill.
“A custodian is someone that provides solutions to the industry,” Oulin told IDEX Online on the sidelines of the Presidents Meeting in
Earlier in the day, when he addressed a World Federation of Diamond Bourses session, Oulin told the listeners that Alrosa had met with most of the prominent producers, adding that, while they are puzzled by the situation in the market, they are inviting the industry to create a win/win situation.
The number one company, he told IDEX Online, will be the one that operates wisely and with vision. It should offer leadership and suggest solutions to the entire industry. Will Alrosa take that role? “That depends on how the market plays out, and the settlement of issues in the global market,” he said.
On its way to take that route, Alrosa is revising its marketing strategy to meet changes in the marketplace, a process, he admits, that will take some time. It is expected that the first draft will be submitted to the board by the end of the year, with the final plan ready by the end of 2009. It is a key issue, as it reflects on a host of other decisions the company needs to make.
One marketing goal is to reach a market share of 25 percent by value, up from the current 20 percent. This will include goods from Angola, as well. According to Oulin, Dan Gertler’s DGI is no longer marketing the Catoca goods. “We market our own goods,” he told IDEX Online.
Currently the company aims to sell 80 percent of its rough in Moscow, creating long term relationships with clients that, according to Oulin, can purchase $300 million worth of rough annually.
The remaining 20 percent will be sold outside of Russia to small and medium size companies. “We are thinking about working with small manufacturers in Israel and Antwerp.”
The basis for the future strategy will build on Alrosa’s advantage in producing diamonds, its reliable mineral base, corporate branding and partnerships.
Retail stores are part of the branding initiative. In addition, a percentage of Alrosa’s production will be earmarked for branding. The exact quantity will be decided upon when the full marketing plans are set.
In terms of potential partners, Oulin raises an interesting prospect: cooperation with De Beers. Alrosa wants to explore and mine in
Oulin envisions a scenario where Alrosa mines jointly with De Beers, splitting the goods as they come out of the mine and selling the diamonds separately. In this format, the two are not selling to each other, which keeps them within the framework of the EC set ruling that prevents diamond sales between them. Oulin insists that any decision made about cooperating with De Beers will be in full accordance with the ruling.