Jewelry and diamond processing are considered a very attractive field for investment in Armenia based on the existence of skillful diamond cutters with competitive wage rates, modern equipment and tax privileges (no taxes on the import of raw materials and on the export of finished products) in Armenia.
In 2001, Armenia's leading mineral exports consisted of precious and semi-precious stones. Large proportions of these exports are polished diamonds, imported into Armenia in their rough state for finishing, thus taking advantage of Armenia's skilled jewelers with competitive labor costs.
Every year the Government of the Russian Federation allocates export quotas of rough diamonds to Armenia. In 1999, Russia supplied Armenia with 30,000 carats of rough gem diamonds and 1 million carats of industrial diamonds for processing. In 2001 this figure reached 300,000 carats. The gems are shipped by Alrosa, Russia's largest producer and exporter of rough diamonds. The industrial diamonds are supplied by the Yakutia State Committee for Precious Metals and Gemstones, via the Almazyuvelirexport trade company. According to an intergovernmental agreement for 2002-2007 the annual quota for rough diamonds will be 400,000 carats with an increase to 450,000 carats in 2007. The negotiations between the governments of the two countries have already been completed. The quotas for buying rough diamonds have been distributed among the operating diamond processing companies in Armenia. There is also a number of western suppliers of rough diamonds to Armenia, among which are: Arslanian Cutting Works (Belgium, UK) and Tashe Company (Belgium).
Today, 27 companies with 5000 employees (2500 in diamond processing) are operating in this sector, excluding individual jewelers. The largest companies are Yerevan Jewelry Plant (2000 employees), Sapphire Plant (520 employees), Lori Company (420 employees), Shoghakn Plant (408 employees) and Diamond Company of Armenia (DCA, 350 employees).
The first foreign company to enter the Armenian market in this sector was Arslanian Cutting Work (ACW), owned by Diaspora Armenians from Belgium. In 1992, ACW also established Lori Ltd. The latter imports rough diamonds from Belgium and the US for polishing, and exports goods made on commission.
Diamond Company of Armenia, bought by Ferfano Corporation (UK) for 5.5 million US$ in 1998, is one of the biggest refiners of precious stones in Armenia. It processes 8,000 carats of rough diamonds each month, supplied by South Africa's De Beers.
Israel's LLD Diamond Ltd bought one of the largest firms, Shogakn diamond processing company, for 370,000 US$ in July 2000. It has plans to process 30,000 carats each month.
Diamond processing is a predominant part of this sector's activities. Nevertheless, jewelry, including gold accessories, golden wristwatches, jewelry articles and processing of semi-precious stones are also important and have a long tradition in Armenia.
Yerevan Jewelry Plant, which has been privatized, is the main producer of jewelry in Armenia. Yerevan Jewelry Plant OJSC was established in 1950. The Plant has about 2000 employees. The demand for the YJP's production is high and its main markets are the USA, Near East and CIS. The plant was completely renovated during the past years, which enabled an increase in production volumes and an expansion in the range of products (tens of thousands of different types of jewels are currently produced). A modern diamond processing facility was also established. Recently, a new production of precious metals affinage with the latest equipment and technology was launched, which can satisfy the demands not only of Armenia but also of the region as a whole.
Modern equipment and the latest technologies allow the YJP to offer consumers not only unique jewels, souvenirs and high-quality processed diamonds, but also watches for ladies and gents, commemorative medals, as well as tools and equipment for jewelry and related industries.
The YJP has preserved its 50-year tradition of jeweler training; a specialized school operates at the plant, where the trainees get not only theoretical knowledge but also gain experience from the older generation. Having competed the training course most of the trainees get jobs at the plant. The Company has a network of stores in Yerevan and several cities in the Russian Federation.
Armenian Jewelers' International Association
In 1998, following a gathering of Armenian jewelers from all over the world, the Armenian Jewelers' International Association (AJIA) was founded. AJIA is one of the country's first international trade and development associations. The AJIA's aim is to bring Armenian jewelers together to develop the country's jewelry industry. It has regional representatives on the west and east coasts of the USA, in Europe, the Middle East, and Armenia. The AJIA plans to set up a regional jewelry trade center in Yerevan.
Key sectors:
IT, Electronics and Precision Eng., Mining, Energy, Fine chemicals and pharmaceutecal, Jewelry and diamonts, Textiles and Closing, Food and drinks, Tourism