Sergey Ivanov (37), the young CEO and Chairman of the Executive Committee of the world’s largest diamond miner, ALROSA, was in Antwerp for the company’s annual meeting with its 56 long-term clients. ALROSA is a traditional company in a traditional business, and still evokes the reputation of a state-owned giant despite the partial privatization (currently 34%) of the company a few years ago.
However, to anyone paying attention, there has been a palpable change in the style and scope of the company’s communications this past year, and after the discussion The Diamond Loupe was granted with Mr. Ivanov, it became clear that this shift toward a policy of openness started at the top. The Russian permafrost appears to be melting (no, the title does not refer to global warming). What follows is a summary of a most candid and substantial conversation in which no topic was off limits – neither questions about his appointment as CEO, nor his appearance on the U.S. ‘Kremlin list’.
The Diamond Loupe: Why did you select Antwerp to hold your sightholder meeting?
Ivanov: Antwerp has been for centuries, and still is, the world’s largest diamond hub. This year we have 56 long-term customers, and 22 are based in Belgium. More than 100 of the companies that attend our auctions and spot sales are based in Belgium. Our clients prefer Belgium not only because of the history of doing business here, but also due to the infrastructure, logistics and security, which enables them to do business safely, quickly, properly and in a comfortable atmosphere. That is why Antwerp is the number one trade center, and a key partner for our company.
We also have a long-standing relationship with the AWDC. Together we promote the development of a competitive and transparent diamond trade. We interact on issues related to the Kimberley Process, exchange views on industry developments and work to harmonize legislative matters and find ways to do more business.
Other locations, like Dubai and India, have made efforts to unseat Antwerp as the diamond capital. Might this change your focus on Antwerp?
I don’t think so. India’s importance is undeniable, as they are responsible for 90% of the polishing trade. But most of those diamonds pass through Antwerp first. The infrastructure here facilitates our customers’ business. The introduction of the Carat Tax two years ago was a very smart initiative the government supported. Our clients tell me Antwerp is still the best location for doing business. Dubai often changes regarding tax issues. There is a new State tax in India on imports of polished diamonds. In this regard, Antwerp is a more fiscally stable and predictable environment for diamond trading.
Our trade with Antwerp is more than $2 billion a year, so about a half of our rough production is sold in Antwerp. The Belgian government is also doing everything it can to keep Antwerp the most competitive and advanced location for the diamond business. We prefer stability.