Clock ticking on Swiss watches' raw materials from Russia
The clock is ticking, literally, as the supply of raw material for Swiss watches is threatened due to the embargo on Russia.
-
Clock ticking on Swiss watches' raw materials from Russia.
Diamonds sparkle brightly at this year's Geneva watch expo, but sanctions imposed on Russia may compel the Swiss watch industry to manufacture more modest designs shortly.
Russia is a key supplier of diamonds, gold, and other precious metals to the luxury watchmakers who show at Watches and Wonders, one of the world's most prestigious salons.
The Russian corporation Alrosa – the world's largest diamond mining company – was sanctioned by the US within hours of the Russian special operation in Ukraine.
According to US Treasury data, it accounts for 90% of Russia's diamond mining capacity and 28% of global diamond mining capacity.
While trade between Switzerland and Russia is limited, gold is the most important import, followed by precious metals such as platinum and diamonds that have not been mounted or set, according to the Swiss customs office.
According to Jean-Daniel Pasche, head of the Federation of the Swiss Watch Industry, "watchmaking was a branch that was less affected than others by supply concerns in 2021."
But that may no longer be the case, he admitted, adding that it was difficult to predict the consequences for the watch business at this point.
"There are reserves. Afterward, we will have to see, depending on how long the conflict lasts," Pasche said.
Recycled gold and palladium
The Swiss luxury giant Richemont owns the Cartier and Van Cleef & Arpels jewelry firms, plus eight prestigious watch brands, including Piaget and IWC.
The group announced on Wednesday that all its brands have stopped sourcing diamonds from Russia.
The move will affect the supply chain to find responsibly-sourced, quality diamonds from elsewhere, Richemont chief executive Jerome Lambert stated at a press conference.
However, for Richemont, the gold supply is of less concern because for a decade or so, the company has been sourcing recycled gold for watchmaking, bought from industry and the electronics sector.
For palladium, used for instance for wedding and engagement rings, the group decided "ahead of the sanctions" to switch to suppliers specializing in recycled palladium, Lambert said.
