ARMENIAN SHOGHAKN DIAMOND COMPANY REDUCES ITS MONTHLY OUTPUT FROM 25THND CARATS TO 3 OR 4 THOUSAND

ARKA
Nov 8, 2007

YEREVAN, November 8. /ARKA/. Armenian Shoghakn diamond-cutting
enterprise has reduced its monthly output from 25thnd carats to 3 or
4 thousand, Sergey Gasparyan, the general director of the company,
said in an interview with ARKA News Agency.

He also said that the stuff had been cut as well – only 300 employees
remained instead of former 1800.

Gasparyan said that these measures were taken because of grown cost
price of final product and volatile situation in currency exchange
market.

He said that the company’s output is completely exported, because
Armenia has no raw materials resources and consumer market.

That’s why the dollar’s precipitously fluctuating exchange rate drives
final product’s cost price up and makes it not competitive at markets.

Gasparyan said that the output reduction was also due to considerable
reduction of the world diamond consumption market.

"Earlier, the U.S.A. was the biggest diamond consumer – about 70%,
while now the country consumes only 30% of the world diamond output. It
depends on further developments at the marker whether the enterprise
will be able to work to its full capacity", he said.

Gasparyan said that as a rule, sales reach their peak at the period
between September and December. It means that future plans will be
outlined only after summarizing results later this year.

"The enterprise has necessary industrial capacity, however a part of
them are temporarily frozen until situation stabilization", he said.

He said raw materials were stably supplied to Shoghakn, and for seven
years of its record the enterprise had never staid idle because the
lack of raw materials.

Gasparyan said that the enterprise produces 50thnd carats every month
from one hundred square meters of raw materials.

Shoghakn is the leading diamond-cutting enterprise in Armenia. Its
quota in Armenian diamond industry makes 35%.

One of the key diamond suppliers is Israel. Once Shoghakn’s monthly
output was 35,000 carats.

The enterprise belongs to entrepreneur Lev Levaev (LLD Diamonds)
from 2000.