ARMENIAN DIAMOND-CUTTING SECTOR SUFFERS DRAMATIC SLUMP
ARMENPRESS
Jul 09 2007
YEREVAN, JULY 9, ARMENPRESS: Armenia’s diamond-cutting industry
suffered a major slump in the first five months of this year reporting
a 50 percent decline in production volumes from a year ago. The sector,
once announced by the government as one of its major priorities,
has been suffering decline for the fourth consecutive year after a
decade of rapid expansion.
According to Gagik Mkrtchian, head of the department on precious
stones and jewelry at the Armenian Ministry of Trade and Economic
Development, Armenian diamond-cutting companies produced over the
first five months of 2007 20.2 billion Armenian Drams (AMD) worth
output, down from almost 38.6 billion from a year ago.
The sale volumes decreased from almost 39 billion AMD in the first five
months of 2006 to 19.6 billion Drams in January-May of 2007. Export
volumes decreased from 37.5 AMD to 19.3 billion AMD.
Mr. Mkrtchian said one of the major reasons behind this dramatic slump
was the shortfall in anticipated deliveries of rough diamonds from
Russia. A 2001 Russian-Armenian agreement enabled Armenian companies
to process up to 400,000 carats of Russian rough diamonds annually
from 2002 through 2004. The quota was subsequently raised to 450,000
carats for 2005 and 2006, but only a fraction of that actually was
delivered in 2005 and no raw-diamond arrived in 2006.
Another reason was the lower demand for diamond and golden items in
the global market in 2004, but though the global crisis was over,
Armenian sector failed to recover. As a result, one of the biggest
Armenian companies, Shoghakh, had to close 1000 jobs.
He said the chief manager of the Russian Alrosa company, one of
the biggest raw-diamond companies, will arrive in Yerevan soon to
negotiate establishment of a joint or Russian company in Armenia.
Mkrtchian said establishment of a Russian diamond-cutting company in
Armenia is a way out since "Russia has the raw-material, which it wants
to sale, while Armenia has facilities and labor force to process it. "
The bulk of the rough supplies come mainly from Israel and Belgium,
explaining why the two countries are among Armenia’s leading trading
partners.