russian diamonds & jewellery 01/11

COVER STORY

CASE

Russian Designer –

Champion of the Champions ! 4

DIAMONDS

MARKET VIEW

Alrosa’s Image Policy:

Myth or Reality? 8

NEWS

Alrosa Sells Polished Diamonds

1ct+ at Auction

Alrosa Becomes Auction Winner

for Development of Ruchey

Gusiny Diamond Deposit 9

GEMS & PRECIOUS

CASE

Getting to know more about

Corundum Enhancement 10

STORY

Ruby in Monarchs’ Crowns

and Ecclesiastical Liturgical

Appliances 12

MARKET VIEW

The Development of Artistic

Amber Treatment 14

RESEARCH

Identification of Synthetic

Amethysts 16

TOP-LIST

Diamond and gems cutters and

traders rating 18

Pendant “Bullfinches”

by Ilgiz Fazulzyanov –

the winner of the

International Jewellery

Design Excellence Award

(IJDE) in Hong Kong

www.ilgiz.com

COVER

TECHNOLOGY

COMPANY

Silver Becomes

More Fabricable 19

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DIGEST

EXPO

REPORT

There Is No Crisis

in Creative Work 40

Dialogue between Craftsmanship

and Imagination 42

Vicenza Oro First :Gene

Engineering Italian Style 44

47th Bangkok

Gem & Jewellery Fair 46

Hong Kong International

Jewellery Show 48

Vilnius – Capital of Baltic

Jewellery 50

The Much Expected

Exhibition 52

Fair Schedule 56

Calm Confidence

of SIHH 2011 58

DESIGN

TRENDS

Graffiti 62

Wild World 64

Cuff Links 65

Chocolate 66

Champagne Bubbles 68

Beyond the mind • Your Own

Fineness • Over Government’s

Head • Amber Shadow on Ural

Emeralds 70

MARKET

NEWS

2011: Any Reasonable

Decisions? 20

NEWS

News from Post-Soviet Space

Ukraine 23

COMPANY

Russian Jewelers

are Summing Up 26

NEWS

Large-Scale Strategy

Luxury from France

Armenias Jewellery Production

Drops by 27.3% 32

RETAIL

What Do They Buy in Russia? 33

Retail Chains and Wholesalers 36

COMPANY

Festivities on Board

Blagodat Frigate 38

Royal Tableware 39

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RING “Poppy”

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Mr Fazulzyanov won for his “Bullfinches”

pendant design. The design brings

the beauty of nature to jewellery.

Bullfinches can be found year-round in Russia,

and the design pictures them in snow.

This year’s IJDE received more than

100 entries from 21 countries and regions.

All designers who have won an officially

announced jewellery design competition over

the past two years were eligible for the award.

The judging panel, made up of internation-

ally respected industry experts, weighed inno-

vativeness, craftsmanship, aesthetics, wear-

ability and function in making their decision.

The names of designers and originating

design competitions of all entries have been

excluded from the judging material to ensure

fairness during the First Judging. All entries

were scored by each judge independently and

the top eight designs receiving the highest total

scores were chosen as the Finalists to enter

the Final Judging held on 3 March 2011.

After the winners was announced the

competition pieces were on display throughout

the show.

Ilgiz Fazulzyanov was born in Tatarstan in 1968. In 1987, he

graduated from Kazan School of Arts. He majored in mak-

ing stain-glass windows and batik in Japanese and Chinese style.

Once, the young designer happened to be in a group of students sent from

Tatarstan to Tajikistan for a course of study, to Dushanbe Jewellery Factory. A couple of years later, in 1991, the young designer received an order to manufac-ture earrings, a bracelet and a ring with

a national design on it for the wife of one of the Tatar Congress participants that took place in Kazan. It was his first serious work. In the days of the Congress, he managed to make four jewellery sets. Afterwards he received an invitation from the Director of the National Cultural Centre, and shortly he acquired his first workshop. In 1994, Ilgiz Fazulzyanov presented national handicrafts of Tatarstan at the International Festival of Islamic Coun-tries in Pakistan. He exhibited a decorated Koran setting and jewellery articles such as bracelets, earrings and khasite. It was here that he received his first award. He developed his skills with the time, gained more experi-ence; he broadened the scope of his creative exploration. At present, Ilgiz Fazulzyanov can boast of participating in multiple exhibitions and festivals where he became winner, first in Moscow of the Golden Boat Moscow Jewel-lery Award 2010, and then in Hong-Kong.

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* The winner of Moscow Jewellery Award Golden Boat 2010 organized by the Jewellery Review magazine, Moscow, Russia

Russian Designer – Russian Designer –

CHAMPIONCHAMPION

of the of the CHAMPIONSCHAMPIONS!!

Russian designer at first

time was named winner

of the International

Jewellery Design

Excellence Award (IJDE)

at a gala reception held

4 March in Hong Kong.

EARRINGS

“Violets”

PENDANT

“Cornfl ower”

PENDANT

“Bullfi nches”

Chairman of the HKTDC Jewellery Advisory Committee and Chief Judge Lawrence

Ma is presenting “Champion of Champions Award” to Ilgiz Fazulzyanov

Chairman of the HKTDC Jewellery Advisory Committee and Chief Judge Lawrence

Ma is presenting “Champion of Champions Award” to Ilgiz Fazulzyanov

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Award Title Designer

Champion of

ChampionsBullfi nches (Pendant) Ilgiz Fazulzyanov

(Russia)

Innovative and

Uniqueness in

Design Award

Molecular Truth (Bangle)

Kristen MALAN (South Africa)

Aesthetic Award Up and Down (Ring) Shuk Mei CHU (Hong Kong)

CraftsmanshipSensational Orientalism(Necklace & Ring Set) Eva SHIU (Hong Kong)

Distinction Award

Hanging Moon (Brooch) and Melting Snowball (Ring)

Wen CHAN (Hong Kong)

Distinction AwardFortune of Eternity (Necklace and Earring)

Regina Da Mei CHENG (Chinese Mainland)

Distinction AwardListen to the Voice of Liang Zhu (Ear Hanging)

Anne HU (Chinese Mainland)

Merit AwardSensational Orientalism(Necklace & Ring Set) Eva SHIU (Hong Kong)

Merit Award Twin Paisley (Ring) Seyed Mohammad MORTAZAVI (Iran)

Merit Award Dancer (Ring) Lok Chung Angela, NG (Hong Kong)

Merit AwardPrecious Limb Bangle (Bangle)

Emily SNADDEN (Australia)

The competition was organized by the Hong Kong Trade Development Council (HKTDC),

the Hong Kong Jewellers’ & Goldsmiths’ Association, the Hong Kong Jewellery & Jade

Manufacturers Association, the Hong Kong Jewelry Manufacturers’ Association and the

Diamond Federation of Hong Kong, China. Contestants were asked to create designs that break

conventional boundaries, while enhancing the charm and glamour of fine jewellery.

Prizes included Champion of the Champions Award, Innovative and Uniqueness in Design

Award, Craftsmanship Award, Aesthetic Award, Distinction Awards and Merit Awards.

Supporting Organisations: Jewellery Review Magazine (Russia), Central Association of the German Goldsmiths,

Silversmiths and Jewellers, Italian Jewellery Awards, Jewellery Association of Australia, Jewellery Council of South Africa,

Korean Jewellery Design Association, National Gemstone Testing Centre, Thai Gem and Jewelry Traders Association.

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IJDE Award creates a platform to honour creative and eminent jewellery designers from

around the world, and provides an opportunity for international jewellery designers to exchange

experiences, expertise and craftmanship and to compete for the highest honour – Champion of

the Champions.

RING

“Dancer”

Lok Chung

Angela

BANGLE

“Molecular

Truth”

Kristen

MALAN

NECKLACE & RING

t“Sensational

Orientalism”

Eva SHIU

BROOCH

“Hanging

Moon”

Wen CHAN

e e

Winners of the International Jewellery Design Excellence Award


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Already today, the contest

panel of the Third International

Contest Golden Boat. Moscow

Jewellery Award 2011 have

marked several works that are

worthy to represent Russian

jewellery art at IJDE in 2013.

This is the Bukvitsa series

made by Juvelia and jewel-

lery set “The Turning Point”

by Andrey Anisin, Saint

Petersburg.

“The Turning Point has a good plasticity solution. The designers were not afraid of a technogenic design and breathed life into it thanks to the skilful use of plastic art. Introduction of black and white or cognac coloured and white diamonds into the shape, and their spreading on the surface of the pendant and earrings, as if they were divided into Yin and Yang would emphasise and strengthen the name’s philosophy and would en-liven the adornments. Like in the fairy-tale, the turning point: first, besprinkle with ‘dead water’ and then with water of life. Here is a modern Russian fairy-tale super avant-garde image!”

PENDANTS “Bukvitsa”

JUVELIA

The winner of The Recognition of

Petersburg contest

The Best Mass Collection Award

Igor LobortasJeweler, a member of the

Ukrainian Designers’ Union,

Fabergé Order Holder, Con-

test Panel Chairperson,

Golden boat. Moscow Jew-

ellery Award 2011

SET “The Turning Point”

A.Anisin

The winner of The Recognition of

Petersburg contest

Fashion Trends Award


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Golden Boat. Moscow Jewellery Award 2011 is sponsored by the companies

Yakutskiye Brillianty (Kristall Mechty)

and Krasnoselsky Yuvelirprom.

Thanks to their participation, the project

is developing.

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RUSRUSRUSRUSSSSRURRUSSIASIASIASIASIASIASIASIAS NNN DN DNN DN DN IAMIAMAMAMMMAMMONDONDONDNDOO S &S &S &SS &&&&& JEWJEWJEWJEWJEWJ WWWWWELLELLELLELELLLELLLLLEELLERYERYERYERYERYRYERYEE1 /1 /1 /1 / M AM AM AM A R C HR C HR C HC HRR 2 0 10 12 0 12 0 12 0 1111

Yakutskiye Brillianty (Yakut Diamonds) Jewellery Factory – trade mark Kristall

Mechty (Crystal of Dream)

Krasnoselsky Yuvelirprom

Kristall Mechty has been leader

of the Russian jewellery market for

16 years already. The company fea-

tures jewellery that contains Yakutia

diamonds.

At the end of 2007, Kristall Mechty

entered into a partnership agree-

ment with diamond recovery holding

Nizhne-Lenskoye, and became the

first company in Russia to have the

complete production chain —

from diamond recovery to

jewellery manufacture

and sale of finished

product through their

own chain of stores.

This helps develop

a wide range of pro-

ducts intended for differ-

ent customers thus pursuing quite a

democratic pricing policy.

To admirers of luxury, Kristall

Mechty offers exclusive works of

jewellery art – designer jewellery by

high-class masters that combine an

up-to-date design and the highest

workmanship.

Except the excellent Yakutia dia-

monds, the exclusive jewellery also

contains other gemstones with

top characteristics: sapphires,

emeralds, rubies, tourma-

lines, etc.

The products by

Kristall Mechty enjoy popu-

larity with famous Russian

politicians, show business

figures and actors.

Krasnoselsky Yuvelirprom is one

of the largest Russian jewellery enter-

prises with a 90 years of history.

The masters of Krasnoye-on-the-

Volga became world famous thanks to

their preservation of the ancient craft

of filigree. At the end of the 1990s, the

factory became a leading production

site of Almaz-Holding regaining the

second wind: the production became

profitable; there appeared an opportu-

nity to develop traditional techniques

and represent the country with dignity

at international exhibitions. The phe-

nomenon of the decade was the pro-

gramme started in 2001, where they

made figurines and filigree composi-

tions. “the Firebird”, “the Troika” and

“The Cathedral of Christ the Saviour”

were symbols of the leading jewellery

compositions in different years.

The composition “The Mosque

Kul Sharif” was Grand-Prix win-

ner at Jeweler-2005 exhibition. At

present, the basis of Krasnoselsky

Yuvelirprom’s assortment is gold and

silver jewellery with state-of-the-art

design containing gemstones, souve-

nirs and interior decorations, dishes

and cutlery.

According to Alexey Shcher-bina the director of Golden boat. Moscow Jewellery Award and chief-editor of Jewellery Review and Rus-sian Diamonds & Jewellery maga-zines, this success the first since 1996, when the necklace “Gizehsky sphinx” by Russian designer Elena Opaleva was included in 28 winners of Diamond International Award (DIA De Beers). “Russian jewellery art today is growing intensively, our designers are really creative and skillful and they easily catch the trends, so that’s enough to succeed. It’s not a secret that many of fa-mous European brands are will-ingly cooperating with our domestic companies. The winners of Golden boat. Moscow Jewellery Award 2011 organized by our magazine already for the second time are selected from the number of pieces won in various competitions in Russia and CIS-countries for the last year. The Award targets not only to show the works of contemporary Russian de-signers but also to bring their names to the international scene as they are deserve the world recognition”.



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COMPANY

The suggested addition alloy is made using the direct

alloying technique. The purpose of this addition

alloy is to increase resistance of the alloy to corro-

sion and to enhance its fabricability at the same time. The

requirements for the content of major alloying elements,

amount of loss during melting and casting, versatility of

the obtained alloy for all shaping methods was taken into

account for the addition alloy calculation.

This addition alloy possesses the required brittle-

ness to have good machinability. The influence of the

alloy composition and structure on the surface finish

can be explained by the fact that the higher is the hard-

ness of metal being machined; the lower is a degree of

plastic deformation. The machinability of sterling silver

improves when the content of tin is increased up to a

certain degree.

The alloy obtained on the basis of addition alloy SILV-

VU-I is fabricable at all stages of jewellery manufacturing

process owing to additional content of aluminium, silicon

and cupric phosphide of grades MF I, MF II (at P content

of 10% and 20%). The best results as a strong deoxidizing

and modifying agent and modifier of the second kind were

yielded by boron. A good account was given by aluminium

thanks to its inherent casting properties. Aluminium, phos-

phorus, boron and silicon were introduced in the melt as

strong deoxidizing agents that suppress emergence of

copper oxide.

The deoxidising agent effectiveness can be estimated

by formation heat of its oxide Ho289 relative to copper for-

mation heat. The developed additional alloy is intended for

improvement of fabricability of sterling silver, improvement

of its running quality and reduction in volume shrinkage.

The application of the suggested alloy and a possibil-

ity of obtaining one-piece shaped castings resulted in

bringing down the reject rate of castings in gas porosity

defects by 4-6%, in misruns and cold shuts by 7-9%.

The studies of SrM 925 alloy’s microstructure show

that the castings of the normal silver-copper alloy have

a coarse-grained structure. After soldering and anneal-

ing, there is no increase in size; however, there is some

additional oxidation of surface casting zones that results

in brittleness. The application of the SILV additional alloy

produces the best grain refinement in a casting.

The SILV additional alloy produces a grain packing

and strengthening effect owing to its elements (nickel,

titanium, boron, aluminium) forming an interstitial solu-

tion with silver. Therefore, the properties of suggested

alloy are almost identical to those of pure silver.

Pieces of jewellery made from this alloy have a very

beautiful steely colour and shine and do not darken

with the time.

The alloy’s corrosion stability is increased by alumi-

nium and silicon. Titanium has been selected as an addi-

tional centre of crystallization. Boron has been selected

as modifying and limiting agent that restricts the growth

of crystals and rounds the grains. Erosion resistance is

enhanced by adding nickel.

This alloy was tested at the West Assaying

Inspectorate. The addition alloy was used at

Petrodvorets Watch Factory and Mactime factory

as well as by L.N. Romanenko, an individual entre-

preneur, and other jewellery factories of Kaliningrad

showing its versatility and low costs.

SILVER Becomes More Fabricable *

Amid the crisis and lessening of demand, the

jewellers displayed a growing interest for manu-

facture of silver adornments. Accordingly, the

demand for new technical developments also

increased. We would like to bring to your notice

an article by Alexander Savchenko on new addi-

tional alloy SILV-VU-I developed by him for ster-

ling silver alloys.

* The full Russian version of the report can be found at www.j-r.ru


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Ukraine’s Jewellery Market: Crisis Marketing

In 2010, Kiev Jewellery Factory being the largest

Ukrainian manufacturer of mass-produced jewellery not

only fully used and developed a chain of fifty company

shops all around the country but also sold articles at spe-

cialised outlets located in places crowded with potential

customers, for example, at public transport stops. This

kind of strategy, which seems more suitable to small-

scale producers and distributors, is paying off. Unlike the

corporate chain, this kind of retail outlets offers customers

inexpensive 14ct gold jewellery rather of utilitarian than of

decorative character, such as pendant crosses, cufflinks

and chains. At these outlets, it is not possible to exchange

old gold jewellery or scrap for new one. According to the

manager of one of these jewellery outlets, a customer will

pay only for the work and shop’s services. Up to 50% of

jewellery is being sold through this shop.

Many Ukrainian enterprises manufacture jewellery

using customer’s own gold. However, the sales of jewellery

in exchange for gold will decrease in the next six months

because in accordance with the new Ukrainian tax code,

such operations will be liable to tax.

This facilitated method of selling jewellery is not the

only kind of operation that Kiev Jewellery Factory relies on.

In 2010, the company’s marketing programme included the

support for Sofiyska Brama boutique located right in the

heart of Kiev, as this boutique promotes factory’s brand

among wealthy Ukrainian public. The major products of

this shop are design jewellery with diamonds and coloured

gemstones of the first group often manufactured in one

copy. In parallel, the company is actively involved in public

relations activities indirectly affecting the luxury article mar-

ket by sponsoring beauty contests in Kiev.

The year 2010 can be also characterised by a more

active involvement of the Ukrainian jewellery companies in

the media space of this country. Many manufacturers not

only sponsor all sorts of “talent shows” but often become

initiators of media projects. The Kiev supplier of haute

joaillerie St. Diamond launched a project called “We are

fifty million” (the population of Ukraine) involving potential

partners in it. This project should support young families

creating romantic charm around the family and family rela-

tions. The jewellery just gains points in this context, and

the manufacturing company receives not only good sup-

port through public relations but also broadens a circle of

possible business partners on the luxury jewellery market

(hotels, restaurants, design jewellery and accessories

shops.) Sales of jewellery in a “package” with other pro-

ducts and services of luxury class is a new and developing

trend on the Ukraine market.

In 2010, the producers, including large companies who

are rather conservative in their approach towards custom-

ers and sales, resorted to e-sales. The largest jewellery

News from Post-Soviet Space UKRAINEIn the third crisis year, many Ukrainian producers worked out a new approach

towards the market and changed their strategy; the quiet situation caused by

uncertainty was replaced by new initiatives that can be called “crisis marketing.”

On the other hand, the year 2011 brought some new laws for Ukrainian jewellers.

In 2010, the Ukrainian Jewellers’ Association marked its 10th anniver-sary being the largest non-governmental organization of jewellers in the post-Soviet space both in membership (250 members) and in influence it exercises on the jewellery market and on the government agencies. Its basis is formed by Kharkov and Lvov Jewellery Factories, Vinnytsia Krystall Fac-tory, Agat Jewellery Factory, the Lugansk region, Yuvelirservis Kramatorsk, and Ukrzoloto, as well as Agni and Brus (both from Kharkov), Violet, Crimea; Garazd, Pektoral and Almaz-Diamant — all from Kiev. Some government organisations are also members of the Association: the State As-say Office, the Gemmological Centre of the Ukrainian Ministry of Finance, the Ukrainian Academy of Heraldry, Trade Mark and Logotype, etc. The Association’s structure consists of eight regional departments whose manag-ers are members of the Management Committee.

The main achievements of the Association are as follows: the abolition of the excise tax, minimising the import duty on jewellery gemstones, pre-servation of the 10% import duty on finished jewellery products in the event of WTO accession. In 2010, the Association conducted joint work with the Cabinet of Ministers of the Ukraine and took part in discussing the new tax code project.

The Ukrainian Jewellers’ Association plays an important role in pre-paring and holding jewellery shows in Kiev, Kharkov, Lvov and Odessa. A feature peculiar to the Ukrainian jewellery market, unlike the Russian market, is a good coordination in holding jewellery shows. A lot has been done to develop a system of specialised educational institutions in the recent years. The strongest side of the Association’s activity is organising seminars and consultations on current problems of legislation and taxation.


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manufacturer of diamonds and diamond jewellery in the

Ukraine Vinnytsia Krystall Factory converted its website

into a sort of an on-line sale outlet. Any registered visitor

can have an access to their jewellery catalogue: the aver-

age price of jewellery varies at 1,000 Euro.

Large distributor companies that represent famous

West European brands in the Ukraine do not want to slow

down. A mono-brand boutique of the giant of the world luxu-

ry industry the Italian House Bulgari opened in 2010 in Kiev

testifies to that. The boutique was opened by Noblesse

chain of stores, which supplies Swiss-made watches and

jewellery from Europe to Russia (predominantly, Italian

jewellery brands.)

Amid the crisis, a lot of jewellery shows are being

organised in all the biggest Ukrainian cities: Kiev, Odessa,

Kharkov, Lvov, Zaporozhye. At present, such exhibitions

are normally used as retail sales site.

The new tax code and fiscal policy make Ukrainian

manufacturers search for an access to foreign markets.

Many Ukrainian manufacturers look for their profit outside

the Ukraine, in Russia or in Kazakhstan, or try to get an

access to the Polish market. Two Ukrainian companies

Agat and Agni successfully operate in Moscow; they

received a lot of orders at Crocus Jeweler in Moscow and at

Golden Ring of Russia in Kostroma from the Russian trad-

ing companies owing to the originality of their products.

Norm Tax code adopted 19.11.2010 Final revision of tax code 03.12.2010

Unifi ed Tax

Simplifi ed taxation scheme; practically the entire jewellery trade uses the unifi ed tax.

The operations with jewellery were excluded from the simplifi ed taxation scheme; introduction of a new tax code could adversely affect the entire industry.

The former system is used by individual entrepreneurs with a turnover of up to $65t and not more than ten hired employees, enterprises with a turnover up to $125t and a number of hired workers up to fi fty. They do not pay: profi t tax and VAT, except for legal entities with a 6% tax rate; individual income tax; land tax, tax on the use of subsoil resources, water and forest resources tax; tax on certain types of entrepreneurial activities.

Profi t Tax

The tax will gradually be reduced as of 2011, from the current 25% reaching 16% by 2014.Service costs of the enterprises that use the simplifi ed taxation scheme were included in profi t.

Remains in force.

Inclusion of service costs in profi t for simplifi ed taxation scheme

users: excludes salary tax evasion; adversely affects small scale business: it will be unprofi table to order services from the enterprises that use the simplifi ed taxation system; part of the the enterprises that use the simplifi ed taxation system will change to the new general system if they do not drop out of the game; it will result in the rise in prices on the services market.

Inclusion in the costs of services, consult-ing, and advertisement purchased from non-residents.

Not permitted Limitation in allocating such costs to the gross expenditure is up to 4% of proceeds

VAT

It will be reimbursed automatically. The VAT rate will be reduced as of 1.01.2014 from to 20% 17%.

Remains in force. Tanks to this the amount of funds borrowed by the government from the business will be reduced; the fl oating assets will increase, most of all those at the disposal of exporters. If the VAT rate

will be reduced by 3%, the goods will fall in price by 1–1.5%

Tax Administration

Justifi cation for tax inspections. Unscheduled inspections can be made not oftener than once a year, if an enterprise operates at a loss during four quarters of the year. A tax inspection should be report-ed ten days before.

Any information can be used for tak-ing an inspection. Inspections can be unexpected, at any moment, in any quantity, and without notifi cation.

A justifi cation for it can be information disclosed pursuant to the law of one’s own free will or as requested by the tax department in accordance with the procedure established by law. A justifi cation containing obscure wording shall be excluded.

Who wants to prove his case in disput-able issues associated with accrued taxes.

Taxpayer. However, he will have to pay an amount of tax liabilities ac-crued by the regulatory body.

Regulatory body. The disputed amount of tax liability will not be paid before the court decision.

Is an order issued by head of regulatory body for taking an inspection mandatory

No. In the event when such an order is issued, the taxpayer is stripped of his right to receive its copy.

The order and submission of its copy to the taxpayer is mandatory.

Administrative arrest of property Up to 96 hours Up to 96 hours; however, the tax administration must justify the arrest in court during this time.

Bond for payment of tax Covers the property that costs double the tax payable Covers the property, which net book value conforms to the tax payable.

The taxpayer must supply explanations dur-ing a tax inspection Provided for in any case The taxpayer can refuse to give explanations as regards his family, close

relatives or himself.


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* The simplifi ed taxation system was introduced in the Ukraine in 1998. The tax rate varies within $3-$25 per calendar month with an annual turnover of up to $65t. The tax rate shall be set by local authorities and depends on type of activity. The tax and proceeds rates have not been changed since then, and they are not in tune with the realities of the present-day realities any longer.

The new tax code that entered into force on 1 January

2011, revoked a lot of opposition from business people as

regards the items that could worsen the situation in the

small-scale business. Many jewellery production enter-

prises and almost all jewellery trading companies used to

operate by the simplified taxation system and paid the sin-

gle tax.* In accordance with the new tax code, any activity

associated with precious metals, gemstones and jewellery

must be conducted under the general taxation system.

The provision was excluded from the final edition of this

document that concerned the cancellation of the simplified

tax in the majority of business activities (including the jewel-

lery production and trade) and transition to the unitary tax

system and the mandatory introduction of cash registers. On

3 December, the Ukrainian president V. Yanukovich signed

the tax code version approved by the business community

representatives and instructed, within two months, to pre-

pare a draft of a special law “On Small-Scale Businesses.”

The table that follows gives an idea of the discussions held

about the main provisions of the new tax code.

The Ukrainian authorities, after the protests made

by the business community, gave up the idea of wors-

ening the conditions for small-scale business because

it contradicts the Ukrainian constitution. Besides, the

new tax code provides for compensation in the reduc-

tion of the profit tax and VAT. The final revision of

the tax code contains a milder incentive to leave the

simplified taxation system, i.e. the inclusion of service

costs in profit. The Russian business community does

not make any open protest yet against a considerable

increase, as of 1 January 2011, in payroll deductions

for all enterprises 26% to 34%; for small-scale busi-

nesses the deductions will increase by 2.5 times i.e.

14% to 34%. There is no compensation provided like

reduction of the tax profit or VAT.

A desire to place all entrepreneurs

in equal conditions will be documented

in the new law “On Small Businesses”.

However, the task to protect the small-

scale business remains urgent. The

President of the Ukrainian Jewellers’

Association Grigory Mazharovsky: “We must help the market

entities to pass the transition period without losing their busi-

ness because more than 70% of jewellery factories operated by

the simplified system. If a collapse of trade happens, large and

medium-size producers who do not have their own retail store

chain may suffer. We consult the members of the Association;

advise them what can be done in various situations, or how to

compose a work schedule. Many enterprises will have to be

reregistered, actually, to start from the beginning. It is not so dif-

ficult to have the documents reissued; but what can be done with

the employees or with the goods? It is a major problem.

The year 2010 was revolutionary for us. Just within three

months, the market situation was drastically changed. The

licencing for operations with jewellery was abolished, and

a new control system was introduced. The association was

against the abolition, because the abolition of licencing results

in the abolition of the licence conditions such as a mandatory

contract with a security agency, availability of premises under

the existing regulations, etc. We submitted our revision of

amendments, and the authorities examined our suggestions

with proper understanding. We succeeded in obtaining for jew-

ellers opportunities to get an indefinite-term licence. The next

step would be an indefinite-term licence that could be passed

down together with the enterprise. We had never demanded

the abolition of licences; we wanted our companies to work in

an adequate legal environment to provide the real producers

with beneficial conditions for business.

We are not sure that we know how to confront pirated

goods in new conditions. At present, the share of shady busi-

ness exceeds 40%. How can we neutralise it? In order to reach

the level of European countries, we must reform both the legis-

lation and economy, and the management structure in general.

You may well know that any entrepreneur may get registered

as a producer having no equipment or operating personnel

whatsoever, and bring contraband into the country, having

these goods hallmarked as if they were his own products.

No-one cares if this producer has production facilities.”

– There have been serious tax inspections, and some

of them were even scandalous, at several well-known

companies recently. What can be done not to give cause

to such inspections?

– More often than not they check cases of tax evasion.

Why do people evade taxes? Because they do not keep

accounting records. The only correct way to operate the enter-

prise is to observe the applicable laws. Our Association is

always ready to protect its members at all levels in the event of

wrong acts on the part of the government. We have our repre-

sentatives in almost all government agencies from the Cabinet

of Ministers to social councils. We have experienced lawyers.

All this can work out, if the enterprise functions within the law. If

the enterprise evaded taxes and did smuggling, which was dis-

covered by an inspection, why should the Association protect

this enterprise? We never protect shady business.

A desire to place all entrepreneurs the abolition of licences we wanted our companies to work in

in

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Association Grigory


JEWELLANDJewelland jewellery holding was founded in 1995. As of now, it possesses its own manufacturing facilities, a well-developed chain of gold wholesale stores and a retail chain consisting of twelve spe-cialised shops in Saint Petersburg. During the years of holding’s operation, its patrons and partners circle

was formed all over Russia. Every year, the geographi-

cal range of its deliveries becomes broader and broader.

The Jewelland’s range of jewellery articles is extremely

wide. The company adheres to the policy of manufactur-

ing exclusive quality articles and of maintaining agreeable

prices. Jewelland’s products are made from platinum,

gold and silver with natural gemstones and also from their

synthetic analogues.

The company is rightly considered to be one of

the leading professionals of the Russian jewellery sector.

MAGIA ZOLOTAFor its seventeen years of operation on the market, Magia

Zolota has become one of the largest chains of jewellery

shops covering many Russian cities and the CIS coun-

tries. Fifty-three company’s shops are located in various

Russian cities (Moscow, Saint Petersburg, Astrakhan,

Perm, Yekaterinburg, Voronezh, Ufa, Novosibirsk, Ust-

Ilimsk, Volgodonsk and Yaroslavl); in Kazakhstan (Almaty);

in Belarus (Minsk); in Ukraine (Kiev). As usual, the shops

are located in the central streets of the cities, the area of

each shop being 15 to 35 square metres

Retail Chains and WholesalersThe number of jewellery shops and stores in Russia and the CIS countries accounts for over 20 thousand. Trade experience shows retail nets are most sensitive to consumer demand and market behavior. They can rapidly develop distribution in various regions.Cardinal part of the retail outlets consists of big networks with jewellery shops all over the country. In addition, new regional retail nets sprang up during the last 15 years. Besides, jewellery boutiques selling exclusively premium class and de luxe jewellery are opened in all big cities. The RD&J in every issue traditionally tell to readers about jewellery traders which won an excellent reputation of long-term reliable partners. This time we added to the review the information about wholesale companies which have been operating on the jewellery market for years, acquired partner through the many Russian regions and in foreign countries.

DRAGOTSENNAYA ORKHIDEYAThe chain of jewellery shops in the Perm terri-tory consists of six jewel-lery shops, three of which are located in Perm, two — in Berezniky; and one of them is located in Dobryanka. The shops are situated in the centre of town, actually being multi-brand salons with an area of 75 to 130 m2. Two of them rent some premises of

the shopping mall, while the others are isolated shops.Dragotsennaya Orkhideya offers Russian and Italian

jewellery. Its partners are Almaz-Holding, Adamas, Diamant,

Platina, Brillianty Kostromy, Master Brilliant, Kakholong,

Tulupov Jewellery House, ELLE Jewelry, Intalia, Style Avenu,

etc. The company has been operating on the market for

fourteen years.

DOM ZLATADom Zlata is one of the largest retailers of Ukraine. It was

founded in 1991. Its forty-six shops are located in thirty cities

of the country and placed in the central parts of town both

as isolated points of sale, and in various trading centres.

The company collaborates with manufacturers and brands

like Yuvelirservis, Smaragd, Yuvelirelit, Ukrzoloto, Akimov,

Violet, KUZ, Morion, Vostok, Khrizafi, Tecnigold, Silmar,

Breuning, Blumer, Magalini, Fibo and Super Bell.

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ALMAZ The Ukrainian National

Jeweler chain. For today it

includes 13 stores in basic

cities of Ukraine with a pop-

ulation over 500 thousand

persons: Dnepropetrovsk,

Kiev, Donetsk, Kharkov,

Lugansk. Almaz is a chain

of modern multi-brand stores

which are located in the central areas of cities with 75% - in

shopping malls and 25% - street retail. General area of chain

– 2153 m2; average area of the store – 166 m2.

Product range includes 40% of diamond jewelry, 25%

of brands, 20% of gold jewelry, 10% of silver jewelry and

5% of silverware. Gathering the best collections from leading

fashion brands all over the world, Almaz chain has the widest

assortment in Ukrainian market. It extends from the well-

known Ukrainian brands: SaGa, Enigmax to world-renowned

Spanish, Italian, French, German and Swiss brands as demo-

cratic, Braccialini, Cacharel, Calgaro, Cavalery, Celegato,

Facco Gioielli, Morgan, Nanis, Nina Ricci, Blu Amante,

Chimento, Frank Trautz, Nina Ricci, Rivoir, Marco Bicego,

Rosato, Anna Maria Cammilli, Kidou, Rosso Amante, Zancan,

Breuning, Furrer Jacot and prestigious jewelry of Faberge,

Magerit and Palmiero. Pride of Almaz network is a group of

diamond products.

The Company has been working on Ukrainian jewelry

market for 17 years (since 1994 year).

AZAMAT-ZOLOTOThe store chain from Astana

(Kakhstan), Azamat-Zoloto is

a part of the large diversi-

fied holding Oh, Azamat. Its

stores offer the best jewel-

lery produced by a number

of Russian and Ukrainian

leading manufacturers such

as Almaz-Holding, Topaz,

Lukas, Yakutskie brillianty, Sadko, Platina.

As a result of search for new opportunities and its own

marketing strategy, Azamat-Zoloto now holds a chain of eight

jewellery stores in large shopping molls in Astana (6), branches

in Kokshetau (1) and Stepnogorsk (1). Interiors of “Azamat-

Zoloto” showrooms are stylishly decorated in the unique man-

ner: large shopping space, soft lighting, comfortable and up to

date showcases, an atmosphere favoring for customers.

Annual increase of the company’s turnover is the key

evidence of Azamat-Zoloto growth.

The company has been operating on the market for

seven years.

KAZAKHYUVELIRThe largest jewellery com-

mercial enterprise in the

territory of the republic of

Kazakhstan, which start-

ed its business from the

four stores and rose to the

country’s largest wholesale

and retail chain. Over 20

stores located in the larg-

est cities of Kazakhstan form the company’s basis. Variety

and affluence of choice of items in the Kazakhyuvelir chain

was instrumental in guaranteeing partnership with lead-

ing jewellery manufacturers from Russia, Ukraine, Italy,

Germany and the USA. The main feature of Kazakhyuvelir

assortment is nationally coloured jewelleries, namely

rings, earrings, bracelets, pendants with national symbols.

The style of the trademark reflecting the culture of the

Kazakh people is always recognizable. Due to its reputa-

tion, the company maintains fruitful cooperation with many

large commercial organizations and banks, including mak-

ing souvenirs, medals, watches, sleeve-buttons, pens and

badges with national symbols.

LINOThe company has been operating on the market for twelve

years. The main area of its activity is premium class dia-

mond jewellery, exclusive and limited edition jewellery. The

manufacturing facilities of Lino, equipped with the state-of-

art machine tools, are located in Yekaterinburg, where two

show rooms displaying company products are situated

too. On the average, the company manufactures 1.5 - 2.0

kg of finished articles per month. The company has found

a lot of partners all over Russia — from Kaliningrad to

Vladivostok — during its operations on the market.

YUVEROSThe company has been operating on the market for twelve

years. Most of the company’s products are mass-produced

articles made from gold with diamonds and coloured gem-

stones. A new area the company is developing is silver

jewellery. Earlier it was silverware, now it is mostly jewel-

lery. Yuveros possesses its own production facilities. As

of now, there are two company’s shops: in Podolsk (the

Moscow region) and in Moscow. The company is going

to open another three shops in Moscow. Yuveros collabo-

rates almost with all the regions of Russia and with some

partners in Turkey and Thailand.

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The major Moscow expositions have moved to

the Crocus Expo during the last eighteen months.

The exhibition complex with a total area of

500,000 square meters located in the North-West district

of the Russian capital gains in popularity with each exhibi-

tion held there. The Crocus Expo’s infrastructure is of great

relevance too: the Aquarium Hotel located in Pavilion 3

to be commissioned in 2011, two more high-rise hotels;

underground and multi-level car parks for 40,000 vehicles;

the metro railway station located on the premises of

the complex with exits to Pavilion 2 and 3. It takes some

thirty minutes to reach Crocus from Moscow centre by

metro railway. The same period of time will be needed to

get to Crocus from Sheremetyevo Airport, and a little longer

from Domodedovo Airport.

Crocus is not only a trade fair centre but also a huge

shopping mall (Crocus City Mall) and the most spacious

Moscow concert hall named after Muslim Magomayev. All

these facts added together attract a lot of visitors, wholesalers

and retailers. The comfortable working conditions and long-

term stability, which no other Moscow site can offer today,

are in the foreground now. All Crocus Expo’s projects have

been planned for long periods; therefore they are based on

loyalty to their partners. For example, Yuvelir-Fest rented

their exhibition space on the condition that the prices would

not perk up within five years. Accordingly, the exhibitors of

the Crocus Jeweler ‘s programme used to pay $200 per one

square metre of the raw space, i.e. two times less than similar

Moscow exhibition centres would demand. The prices will

not change either for those who participated in two or more

Crocus-Yuvelir-2011 fairs within five years.

Amid the crisis and sales slowdown, the high

Moscow exhibition prices became simply impracticable for

Since 2011, the Crocus Expo, Moscow’s largest and state-of-the-art trade fair and

business centre, has been house to Russian jewellery fairs. Yuvelir-Fest launched

the Crocus Jeweler exhibition programme together with the Jewellers’ Guild

of Russia, regional professional associations as well as jewellers’ associations

of the CIS countries. The May and September exhibitions are of interest

to the foreign companies that already operate or are going to operate on

the Russian market. The other jewellery market participants are attracted by

comfortable working conditions and unprecedentedly low prices for Moscow.

The Much Expected Exhibition

The General Director of Jewellers’ Guild

of Russia VLADIMIR MOSPAN gets familiarised at Crocus

Jeweler with the products of Krastsvetmet factory,

one of the leading Russian jewellery manufacturers.

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jewellery manufacturers, who have the highest spendings.

It may well be known that starting from 2009; Moscow

exhibition spaces do not yield any financial gain to

the majority of the exhibitors from their retail sales or relative

to the number of their signed wholesale contracts.

The democratic provisions of the Crocus Jeweler ‘s

programme give wide opportunities to Russian regional

and foreign companies to enter the Moscow market and,

consequently, the all-Russia market as well. The Crocus

Jeweler organisers are trying to re-establish the status of

a normal market segment for the companies where prices

and margin must be correlated to the general situation.

As the information on the new trade fair projects spread

about, it was supported by the leaders of the jewellery

market from Moscow, Saint Petersburg and Kostroma.

The foreign companies are interested in the spring

(21-24 May) and autumn (14-18 September) fairs to be held

under the new programme. In May, several dozen compa-

nies from Thailand are expected to come. They developed

a new brand, Ploi Thai, in that country last year, which means

‘Thai valuables,’ and accepted its promotion programme

on the national level. Therefore, visitors to the May Crocus

Jeweler will get to know not only stones of the renowned Thai

cut and Thai silver articles but also the Thai national songs,

dances and specialities of the Thai cuisine. This fair except

the brand zone will include the collective stands of Saint

Petersburg, Kostroma, Yakutia (Sakha Republic), Ukraine as

well as Hong-Kong and Turkey jewellers.

As advised by a number of big Russian companies,

the autumn fair has been planned for 14-18 September,

2011. However, afterwards they are going to move it to

the first half of October. It would be more convenient for

all because September is crowded with shows and fairs

both in Europe and in Asia, and they are visited by many

experts of Russian manufacturing and trading jewellery

companies.

Within 2006-2010, autumn exhibitions Golden

Globe were held at Crocus Expo. On 11 - 14

November 2010, the Golden Globe/Moscow Jewellery

International was held; it was the 5th edition but the first

time for Yuvelir-Fest. Over 80 jewellery and timepiece

making companies from Russia, Belarus, Azerbaijan,

Kirgizstan and Switzerland took part in it. At the Golden

Globe, the customers’ interest was attracted both by

traditionally high-quality brands such as Krasnoselsky

Yuvelirprom, Moscow Special Alloys Plant, Maskom,

Sakha Yuvelir, and by the ultra-modern designs elabo-

rated by Lino Russian Platinum Company, Agni,

Goldberry and Casting House. At this exhibition, the

winners of the second Russian jewellery Golden Boat

contest received their awards; and one of the winners

Ilgiz Fazulzyanov, for his Bullfinches pendant, received

the Grand Prix at the International Jewellery Design

Excellence Award 2011, whose balance was struck on

4 March in Hong-Kong. The contest most prestigious

on the jewellery market of Russia and CIS countries

will further be held within the Crocus Jeweler’s exhibi-

tion programme.

Just prior to 8 March, a pre-holiday jewellery fair

traditional for the Russian jewellery market was held

at Crokus Expo. It was accompanied by a large influx

of prospective end consumers and enhanced sales.

Purchases at $15-20t were not rare because wealthy

people normally go shopping to Crokus. Thus, the

products of Crokus-Yuvelir’s foreign exhibitors can be

seen both by trade representatives from all Russian

regions and by multiple end consumers. The advan-

tages of the new programme, such as low prices ($200

per one square metre) were enhanced by an opportu-

nity to construct exclusive stands two times cheaper

due to the use of new Advantec sets available only at

Crokus Expo.

JEWELLERS AT CROCUS EXPO

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G R F F I T I

RINGS

BLUE WHITE

GROUP

PENDANTPENDANT

GIORGIO VISCONTI

PENDANTSPENDANTS

SUPEROROSUPERORO

The letters and monograms do not

perform only a decorative function.

Embellishments containing text

messages is another modern sub-

culture component and is one of the

paths to self-identification. The jew-

ellers adorn rings and pendants with

pictures, confessions and messages

made from gemstones applying var-

ious methods of surface treatment

and text application.

PENDANT

JUVELIA

(Russia,

Saint Perersburg)

Nowadays, the modern jewellery art keeps upaaaddd

with the times as it never did before, displayingttt

a general tendency to return to less complicatedeeeennn

shapes and materials.apapap

Expecting BASELWORLD 2011, the jewellerspepp

prepared collections that will determine majorepee

trends in design such as Champagne Bubbles,eee

Graffiti, Chocolate, etc. These trends are unitedGrGrGr

by jewellers’ aspiration to focus not only onbybyby

colour, shape, volume and function, but alsoccc

return to symbolic and conceptual aspects ofrrr

jewellery design.j

A relationship between jewellery and the core

values of modern society is expressed in major

trends of the coming year.

By Irina Slesareva

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NTRENDS

1 / M A R C H , 2 0 1 1RUSSIAN DIAMONDS & JEWELLERY

PENDAPENDA


PENDANTSPENDANTS

TIFFANY & COTIFFANY & CO

PENDANT

GOLDBERRYGOLDBERRY

(Russia, Kostroma)(Russia, Kostroma)

EARRINGSEARRINGS

BROSWAYBROSWAY

BRACELETBRACELET

BROSWAYBROSWAY

RINGSRINGS

ORIANNE COLLINSORIANNE COLLINS

PENDANTPENDANT

LOWELL GROUP LOWELL GROUP

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1 / M A R C H , 2 0 1 1

PENDAPENDA


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IN THE NEXT ISSUE OF THE RUSSIAN DIAMONDS & JEWELLERY:

► Gems&Precious column: innovative Russian technologies for treatment of emeralds and tourmalines, new synthetic amethyst identification methods developed by the State Gemmological Centre of Ukraine;

► Market column: Russian diamond market review, review of demand trends following the Chrismas selling results, news from Russian and foreign companies;

► More: jewellery design trends, reports on metropolitan and regional jewellery shows, etc.


russian diamonds & jewellery 01/11

Documents

jewellery design competition

bullfinches pendant

design pictures

bangkok gem jewellery

ilgiz fazulzyanov

polished diamonds

pendant bullfinches

judging material