ALROSA, Russia's largest diamond producer, has announced the introduction of anti-crisis measures in the face of the ongoing crisis in the diamond and jewelry industry. The company, which mines about 90% of Russia's diamonds, plans to reduce personnel costs by 10% and suspend production at some of the least profitable sites. Analysts estimate the possible reduction in production at 4–10% of current volumes. At the same time, ALROSA states that the suspension of production will be organized in such a way that the company can quickly increase capacity if the market recovers.
According to Pavel Marinichev, CEO of PJSC ALROSA, the company has also reduced activity on a number of investment projects, but none of them have been stopped. According to him, the reduction in production and personnel costs will not affect production plans, but rather increase the company's stability in the future, when the balance of supply and demand in the diamond market may shift towards a deficit.
In 2023, ALROSA already faced a drop in performance: revenue decreased by 4.6% to 179.46 billion rubles, and net profit decreased by 34%. However, the company still sees stabilization of inventories and a moderate increase in diamond prices, which could lead to an improvement in the situation in 2025.
Analysts note that despite the decrease in production, this will not have a significant impact on the market. ALROSA may accumulate a reserve of 12–13 million carats, which will compensate for the possible reduction in production. At the same time, global trends show that companies such as De Beers may also reduce their production plans in 2024, which further supports the stability of diamond prices.
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