Monday, December 19 2011 19:17
Yerevan Jewelry Plant to start expansion to Asian markets
ArmInfo. The Yerevan Jewelry Plant may double the export of jewelry due to expansion to the Asian markets, Director General of the Yerevan Jewelry Plant Emil Grigoryan said in an interview with ArmInfo. At the same time, the businessman did not specify the annual output and export, he only pointed out that in 2000-2002 export of jewelry in USD terms reached $250 mln. Grigoryan said that the expansion to Asian markets will allow increasing export to $500 mln, i.e. doubling it.
Grigoryan said that in the total structure of production, export constitutes 90-95%, the rest is sold in the domestic market. The enterprise exports the jewelry to the post-Soviet countries, as well as to Europe and the USA, where the jewelry export is connected with certain difficulties. He explained that the European market is oversupplied, therefore, it does not perceive the new brands easily. The businessman said that layering of citizens into very rich and insolvent ones is typical to the European countries today. "In the meantime, the middle class, whose solvency in Europe starts declining due to the crisis, is the main buyer of jewelry, as a rule", he said.
As regards the export policy of the competitors, Grigoryan thinks that they have some plants of expansion to the Asian markets. Though China is a large supplier of a variety of commodities, nevertheless, its domestic needs are not covered completely. Grigoryan recalled that indirect taxes (VAT, excise tax) had been imposed on imported commodities in China before China joined the World Trade Organization. After China joined the World Trade Organization, the taxation system was changed in the country, and the local jewelry producers should make advantage of this. In this matter Grigoryan hopes for the help of the relevant state departments.
Grigoryan pointed out two factors that restrict jewelry development in Armenia. One of them is connected with the legislative field, which stimulates export of Dore gold and makes its affinage unprofitable inside the country. He said that gold affinage in Armenia is possible from both technological and technical points of view. He added that the exporters have the right to VAT offset in bilateral clearing, which is not envisaged in case of its affinage inside the country.
The second problem is connected with the expensiveness of raw materials in the foreign markets. According to Grigoryan, the plant buys the gold according to the London gold fixing (gold fix is the procedure by which the price of gold is determined twice each business day on the London market). In the meantime, the countries with developed jewelry production sphere supply the gold to their producers at a price which is by 5-10% lower than the London gold fixing. The gold affinage inside the country will solve this problem, Grigoryan said.
To recall, according to the report of the Armenian Customs Service, over Jan-Sept 2011 gold export from Armenia grew by 62% to 1606 kg against 988 kg over Jan-Sept 2010. The customs value of the exported gold was $43.137 mln (2.5-fold growth) against $17.089 mln over Jan-Sept 2010. A total of 1198 kg of gold worth $60.967 mln were imported to Armenia against 971 kg worth $36.665 mln over Jan-Sept 2010.
To note, the National Statistical Service of Armenia publishes no information on the jewelry production output and export.
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