Armenian government establishes "Hay-Almast" CJSC

ArmInfo. A state-owned Hay-Almast CJSC is being established in Armenia. The decision, which, according to the authors' intention, will become a serious impetus  for opening new jobs in the diamond industry, attracting investments,  promoting local production and exports, was adopted at a meeting of  the RA government on December 9 in a non-negotiable manner.

As stated in the background to the document, the decision was made  due to the need to develop the diamond industry, which is a strategic  sector for the Republic of Armenia, to provide diamond companies with  efficient raw materials, to promote diamond companies in the EAEU and  in third countries, and to attract additional funding for the further  development of the sector. It is also noted that the decision will  allow introducing a new format of work with the Russian ALROSA   company, attracting investors to the sector, as well as supporting  new Armenian companies.

The authors of the bill note that the development of the diamond  industry in the Republic of Armenia has always been conditioned by  fruitful cooperation with the Russian ALROSA  company, the world's  number one producer of rough diamonds. "Given the significant changes  in the policy of selling rough diamonds to the Russian company ALROSA  over the past ten years, effective rough is sold exclusively to large  companies under long-term contracts. Armenian companies are  practically unable to import efficient rough from ALROSA, since they  do not meet the standards set by ALROSA. The problem is that in order  to conclude a long-term cooperation agreement with ALROSA, a diamond  processing company must commit to purchasing a certain amount of  rough on a monthly term. Our enterprises do not have the opportunity  to purchase a certain amount of raw materials every month, but the  consolidated demand of Armenian companies can overcome this obstacle,  "the document says.

When importing and supplying raw materials to local companies,  state-owned companies also solve problems related to the observance  of the principle of equality between companies, in particular,  companies with different capacities, as well as problems of quotas  for processing and export. Moreover, as the initiators of the  decision noted, as a result of preliminary negotiations with the  ALROSA company, it became clear that cooperation with a company with  state participation is more acceptable for them. "The goal of the  company is to increase this demand, to satisfy it by joint purchase  or sale to local producers, for which the company will perform the  function of financial intermediation, which will be fixed in the  charter," the decision notes.

The CJSC will act as a structure for consolidating demand with the  following mechanism: The company enters into contracts with diamond  companies operating in the territory of the Republic of Armenia, in  accordance with which these companies submit applications to the  Company, pay it, on the basis of which the latter will supply the  rough purchased from ALROSA to the beneficiary companies.

To cover the costs of Hay-Almast and ensure a minimum profit for  intermediary services provided to diamond companies, a commission is  charged, which is approved by the General Meeting of Shareholders of  the Company. The company's board will include one or two  representatives proposed by existing diamond companies.

According to the estimates of the initiator of the establishment of  the CJSC, the Ministry of Economy of the Republic of Armenia, this  decision will increase the production and export of diamonds by an  average of $ 150 million a year. The number of people employed in the  field can be increased to 5 thousand people, the number of operating  large enterprises - up to 20-25.

It should be reminded that earlier AmrInfo, referring to Minister of  Economy of the Republic of Armenia Vahan Kerobyan, reported that to  promote the interests of local jewelers, it is planned to establish a  state- owned Hay-Almast company The head of the Ministry of Economy  said that the processing of precious metals and precious stones in  2021 compared to 2019 increased by 70%. This, according to the  minister, was achieved largely thanks to the efforts of the  department headed by him. "We have used protection tools to protect  Armenian jewelers in the EAEU market, have used improved sourcing  opportunities - we are currently establishing the state-owned  Hay-Almast CJSC, which should become a buying alliance for all  diamond processors," he said.