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Indian investor launches diamond cutting enterprise in Primorye
The history of the diamond company M. Suresh lasts more than half a century. It was founded in 1968 and is now one of the world leaders in diamond processing and trade deals with them. Branches of the company are located on all continents, M. Suresh's three own production sites are located in India and South Africa. The company is a member of the De Beers conglomerate, an international corporation specializing in the extraction, processing and sale of diamonds.
The 50th anniversary of the company was marked by a new stage in its activities: in the fall of 2018, it became a resident of the free port of Vladivostok. Its structural unit is “M. Suresh Vladivostok ”is implementing a diamond cutting project in Russia. The diamond cutting factory in Primorye began work in August this year.
“Investments in the Far Eastern project of M. Suresh under an agreement with the Far East Development Corporation are estimated at 314 million rubles. The project is quite comparable in scale with the foreign production of the company. At the first stage of work, it is planned to purchase raw materials worth $ 50 million per month, then the volume of purchases will increase to $ XNUMX million per month. According to the agreements, raw materials will be supplied by Russian enterprises. In particular, close contacts have been established with ALROSA - M. Suresh "has long been buying raw materials from her. Diamond processing will be carried out using the most advanced technologies, ”said a representative of M. Suresh Vladivostok »Victor Pomelov.
Free port open to all
At first glance, it seems unusual that a foreign company took advantage of the special economic regime in Russia. But this is only at first glance. Currently, residents of the TOP and the Free Port of Vladivostok are 952 foreign companies. Among them, by the way, is another diamond company from India - KGK DV, which opened a factory in Primorye in 2017 and has already invested 675 million rubles in the project. In Yakutia, also with the support of KRDV, a jewelry and lapidary cluster will soon appear, created by Sabiem on the principle of an industrial park.
“The launch of such enterprises is an important step in the formation of diamond-diamond clusters in the region, the creation of unique jobs and opens up serious opportunities for residents to export faceted diamonds to the countries of the Asia-Pacific region,” says Aslan Kanukoev, General Director of the Far Eastern Development Committee.
At the same time, foreign investors are attracted not only by tax benefits, but by zeroing taxes on land, on profits, on property during the first years of work; reduction of four times the single social tax. Foreign entrepreneurs are often more interested in other support measures.
“Due to the status of a resident of SPV, the company M. Suresh Vladivostok managed to acquire and deliver, install, and connect the equipment necessary for work in a short time,” says Victor Pomelov. - Resident status, in addition, made it possible to issue about 50 work permits for foreign citizens to work on the territory of the Russian Federation without problems. They have already arrived in Russia and set to work. In total, the project - and this is also provided for by the agreement with the FWC - involves the creation of 200 new jobs. "
In total, according to the Far East Development Corporation, 1614 residents are currently conducting investment activities in the Free Port of Vladivostok, and everyone is receiving the necessary support measures from the FDC. But we must remember that the diamond cutting industry is special, and for Primorye it is new. Investors are ready to develop production in the region according to international standards, but there are not enough personnel on the ground.
The Agency for the Development of Human Capital in the Far East (ARCHK DV) is now working to attract specialists from other regions for the project “M. Suresh Vladivostok. ” The plans include the launch in Primorsky Krai of an educational program to train professionals for the diamond cutting industry. This project will cost about 200 million rubles: expensive equipment is required for training specialists. Indian investors are ready to participate in the project - to support it financially and to transfer the gained experience to the future employees of their enterprises.
The market dictates
“The launch of the factory in 2019 is only the first stage of work. Further plans in the company include increasing production volumes and increasing the number of employees. The company will reach its full capacity within five years. But in this case, much depends on the state of the market, on the global demand for diamonds, ”says Victor Pomelov.
India is a world leader in diamond cutting and jewelry manufacturing: it accounts for more than 90% of world rough diamond imports and 75% of rough stone exports. However, in general, the diamond cutting industry is currently experiencing a difficult period. A certain market share (and it is growing from year to year) is occupied by artificial diamonds. Some large diamond companies have even created special units that deal exclusively with artificial stones, which are ten times cheaper than natural stones. This, in turn, creates problems in the relationship between manufacturers of natural stones and distribution networks: it is more profitable for sellers to deal with cheaper and “mass” products than with unique expensive specimens.
Company M. Suresh Vladivostok ”in this difficult situation relies on already established distribution and distribution channels. First of all, attention will be paid to the markets of the USA and the Asia-Pacific region: this is where the jewelry produced in Vladivostok - wedding jewelry and fashion accessories - will go for export. Further, the company intends to develop niche Russian jewelry products for sale in special areas, said M. Suresh's representative in Russia, Rajesh Kothari Rasiklal, at the Indian Investor’s Day this summer. In addition, the company intends to work to establish a balance in Asian markets between rough diamonds and jewelry.