Bloomberg

(Bloomberg) -- Alrosa PJSC is helping to start a diamond center in Russia’s Far East to attract trading and manufacturing companies, and boost gem sales to Asian countries including China, the second-biggest buyer.

About $1 billion of business should go through the Eurasian Diamond Center in 2018, when more than 100 firms involved in mining to polishing are expected to be part of it, according to Alrosa’s presentation for the opening on Friday. The Vladivostok-based hub will focus on similar services to the leading manufacturing and trading centers in Mumbai and Antwerp, Belgium.

KGK Group, a Hong Kong-based wholesale distributor of gems, will be one of the first companies to join the center, Alrosa Chief Executive Officer Andrey Zharkov said. The project is being backed by the Russian government, the major shareholder in Alrosa, which mines more stones than any other company.

Russia has sought to cut its economic reliance on western markets, as relations with the U.S. and Europe soured amid a two-year conflict in Ukraine, and focus more on Asia. Alrosa, which sold a combined $745 million of gems to India and China last year, plans by 2018 to double its sales to the Asia Pacific region, one of the fastest-growing demand areas, Zharkov said.

Incentives and tax benefits at the port of Vladivostok may further develop industries using stones in both jewelry and industrial products, Zharkov said in an August presentation.

Alrosa has already invested in organizing some infrastructure for the hub and began selling diamonds in Vladivostok last month. The Moscow-based company may expand its trading activity at the Shanghai Diamond Exchange and open an additional office in China, it said in the presentation. The producer is also considering starting its own trading platform in Mumbai.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net. To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin

©2016 Bloomberg L.P.

bloomberg

 Bloomberg