Chow Tai Fook Jewellery Group Limited ("Chow Tai Fook" or the "Company", HKEx stock code: 1929), the world's largest jeweller with a heritage of over 80 years, is delighted to announce that the Company has today entered into a strategic two-year agreement with ALROSA of Russia, one of the world's three largest diamond producers, with immediate effect. Chow Tai Fook Executive Director Conroy Cheng represented the Company in today's signing ceremony held in Moscow.
Conroy Cheng said at the agreement signing ceremony, "The greatest challenge for all diamond industry players is the scarcity of authentic natural diamonds. The agreement with ALROSA enables us to secure more reliable supplies of rough diamonds, particularly those specifications that are in greatest demand from our customers. We will continue to invest in both product quality and design to further enhance our product image and value in our pursuit of brand excellence."
According to President Fyodor Andreev of OJSC ALROSA, signing a long-term agreement with Chow Tai Fook is a step towards geographical diversification of ALROSA's sales, which ALROSA deems necessary for the development of its operations. "ALROSA is always looking to enter into long-term agreements with its customers, since such agreements guarantee stable sales volume to us, as a producer, and guarantee stable rough diamond supply to our customers. Chow Tai Fook has already been ALROSA's customer on a spot term basis. The document we signed today takes our cooperation to the next level, and is ALROSA's first long-term agreement with a company from China. We believe this market has great potential in terms of the growth in diamond jewellery consumption as well as demand for rough diamonds," he said.
Over 80 years, Chow Tai Fook has gradually built a sophisticated vertically integrated business model that has equipped the Company with an effective and tight control over the entire value chain. Enhancing the Company's upstream vertically integrated business model is a crucial part of Chow Tai Fook's development strategy.
Kent Wong, Managing Director of Chow Tai Fook said, "The partnership with ALROSA is an important move to achieve the Company's aim and commitment to increase our procurement of rough diamonds. We are honoured to partner with ALROSA, a reputable leading diamond mining company, to underpin our strength in procuring quality natural diamonds from reliable sources. We are pleased that ALROSA has recognised our market leadership and that we share the same vision in anticipation of an increasing demand for diamond jewellery in the Greater China market."
Chow Tai Fook enjoys unparalleled brand recognition in the industry. The Company has been a DTC Sightholder and a Rio Tinto Select Diamantaire since 1993 and 2009, respectively, and is also a strategic partner of ALROSA upon signing the agreement today.
ALROSA, the state-owned, largest diamond mining company in Russia, controls a considerable portion of the Russian rough diamond market. It currently has contracts with 24 long-term clients. Establishing cooperation relationships with major diamond purchasers such as Chow Tai Fook is instrumental to ALROSA as it seeks to develop a wider distribution network.