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Tuesday, 26 May 2015 15:18

The Story of the Amber King – an Interview with Wiktor Bogdan

Written by  Anna Sado

In 2013 he was accused of tax evasion in Russia. As a wanted notice was issued for him, he found shelter in Poland. Though he does not know how this story is going to end, he has decided to try to continue running his amber business here.

When is your next court hearing? 

Within a month I should know whether I will be able to stay in Poland, or if I will be extradited to Russia.

Would you like to stay? 

Of course. I have been conducting my amber business here for years and I would like to continue that. For over a year I have been hoping that I will stay, so I have the whole workshop here. I am also planning to open two shops with amber products. I would also like to open a private amber museum, where an amber office would be on show. 

An Amber Chamber? 

What I mean is a copy of the amber room that was bestowed to Peter the Great by Frederick I. I commissioned a copy back in 2009 in Russia. Now I am planning to have it finished and presented to the public. I even have two prestigious places as potential locations in the Gdańsk Old Town, indicated by the city’s authorities, where I could show it. It is important to me that the work is taken over by Polish amber makers – at the end of the day, they are definitely the best specialists in the field. I would also like it to be a joint work of the Russian and Polish amber makers – a symbol of good cooperation. Politics is politics, but out cooperation has been really good for years.  

Where did such an idea come from? 

I have been dreaming about opening a private amber museum for a long time. I would like it to be a place with a copy of the Amber Chamber as its main decoration. Initially I was planning to execute this idea in Kaliningrad, however, after I was forced to leave Russia – and I hope I won’t have to go back there – I thought about Gdańsk.  It is the World Capital of Amber, after all, so the place is ideal. There is one more reason, though: I would like to leave some heritage, both in the material sense – for my children, but also in the symbolic sense – because my life has been, and I hope will continue to be connected with amber. 

It looks like you are trying to put down roots in Gdańsk... 

I would really like to. I have a Polish passport, and to large extent I feel Polish. I also know that I could contribute a lot to the Polish amber industry.

In what way? I am afraid that you will be perceived as serious competition. Especially as you have considerable capital behind you. 

Competition? As you say in Poland: where there are 10 shops, 11 can make a living as well. In Gdańsk there is such a great potential that another 20 more shops would find a place on the market. I am going to sell jewellery by Polish producers, at fair, market prices – why would I be competition then? And the museum that I am going to open will add splendour both to the city and the Polish amber makers. Apart from the copy of the Amber Chamber, smaller than the prototype by about 10-15%, I would also like to present amber blocks, also the ones with inclusions. Actually, whatever I still have left after being robbed... I had a collection of amber pipes, over 300 pieces from various periods, it was probably the biggest collection of this kind in the world. Now they are sold on internet auctions... 

Why?

When I moved to Poland I lost about 70 percent of raw amber that I owned. It was worth about 80 mln Euro. This is the estimate of the Kaliningrad police, taking into account the market prices, my losses are significantly bigger. I was robbed of inclusions, drops and blocks that I had been gathering for 20 years, as well as historic products, such as chests and other usable products. The amber that was taken from me was valued, counted and deposited at the Jantarnyj combinat warehouse. Then, everything magically disappeared. Actually, it was replaced: the number of bags is correct, but there are no seals, and instead of the beautiful, large blocks of amber there is powder and amber waste. It was a sensational robbery, even for the Russian conditions, however the traces lead directly to the policemen. Soon it will be a year since it happened, and despite a lot of evidence pointing to the perpetrators, the investigation has not moved forward at all. My house in Baltysk has been searched seven times. If that’s not enough, last year when my family was away, the house was completely robbed of everything that had any value at all. I have no delusions that I will ever be given back my properties. I have also won the lawsuit about the alleged tax evasion in Russia, but does it matter...? 

Do you want to start everything from scratch in Poland? Is this why you have shown interest in mining amber in Lubelskie region? 

If it turns out that there really is amber – after all nobody has seen it so far (laugh) – I had a plan to open a production company over there.  However, it is only a plan, as nothing has happened there yet: the first tender did not result in anything, and nobody knows anything about the second one, that has been planned. I am incredibly surprised by this tardiness: the Ukrainians mine huge amounts of amber, the Lithuanians are getting ready to mine their deposit on the Curonian Lagoon, and the Polish are sleeping. Soon this mining may turn out not to be profitable, as there will be more amber on the market so the prices will fall even further. What’s more, market capacity, even the Chinese one, is limited. What is there to wait for? Even if the tender was announced tomorrow, mining would start in two years’ time at the earliest. Meanwhile, the Ukraine wants to mine even more amber, they are buying machines already, and soon they will be producing jewellery. 

It will take a few years, before they learn to process. 

Unless people go there in order to teach them. And I am positive that they will, everything comes down to money. Then they will be ready next year. Polish amber companies, although they don’t have access to the raw material, still have market advantage, as they frame amber in precious metals. This will not last forever, though, as certain regulations may change in Lithuania and the Ukraine any time. Considering that amber is 50% cheaper in the Ukraine, the Polish may have serious competition soon. I am surprised that nobody can see that. The Marshall Office in Lublin does more to discourage investors than encourage them to take part in the tender. It is more beneficial to buy land in the nearby area and look for amber there, than to take part in a tender with such adverse conditions for the investors.

Amber prices are decreasing, the Ukrainian expansion is progressing, thus the Russian market will feel the fall. The Ukrainian parliament has accepted a regulation that allows everybody to receive a licence to mine amber. Taking into account the fact that amber in the Ukraine is deposited at only a third of the depth of the deposits in Russia, its  mining will be cheaper. The competition is growing. I think  that I know how to stabilise this market, so as the amber producers and crafters would not lose their jobs. In my opinion, the most important things are: maintaining current prices, buying amber from the Ukraine and not from Russia, but also there is a need to create a listed company that would deal with mining amber in Poland. 

It would be good to have a kind of amber De Beers to control this market... 

... and then the police will come and take everything away  (laughs). And the amber makers will be angry, as they will be convinced that somebody is cheating them. This is how it was with me. I used to buy from the combinat by tons, but only a fraction of that raw material ended up on the market. If had released all of it, the price would have fallen significantly. And it would lose its value again, grannies would be selling it on the market. The best situation is when the demand is slightly higher than the supply. Then the price may increase, and amber becomes more desirable. Back then it grew by something like 20 per cent a year. And when the prices fall, everybody panics, and nobody buys anymore.  

There already are legends about your amber businesses...  

I know (laughs). Though, not all of them are real...  

How did you begin?  

At the time of Perestroika, as only then was it possible to buy amber at the mine in Jantarnyj. Many Poles, Lithuanians, and Chinese used to come over then. As a Russian company I would have to have a licence, and that was hard to obtain, so I opened a company in Poland. 

At some point you were given exclusive right to purchase amber from the mine, and became a monopolist.  

I have never had exclusivity. According to the Russian law nobody could have it. The mine used to sell to me, because I would buy a lot and virtually everything, so I was a really good client. Especially when I bought all the small amber that was deposited at the warehouses – something like 200 tons. Nobody wanted it. I bought it, sorted it and sold it with 50 per cent profit per kilogram – slowly, but I did make profit. I could even buy on credit from them. It was the Russians at the mine that started selling small and large fractions together. That was when the Polish stopped coming t the mine, as it was not profitable for them to buy on the new conditions. Therefore, I started going to Poland. As I was exporting amber legally I had the right to claim VAT reimbursement, and my process were still lower than the ones at the combinat by about 20 per cent.  

You also forced them to buy big and small fractions....  

If I was buying like that, why would I have sold it in a different way? What mattered most was the fact that I had good prices and brought raw material directly to the company.  

And this is a kind of market monopolization.   

Back then there was a lot more amber on the market than there is now. Everybody had the material, they knew where to buy it – they didn’t have to buy it from me. They used to complain because they wanted to get the best purchase conditions. They had to buy everything from me, but if somebody wanted to select stones, they had to pay more.  

And you have become the amber king... 

(laugh) I have never called myself that. Journalists like sensations and colourful comparisons, it was one of them who called me an amber king. 

But you have been dethroned... Why?  

When the prices of raw material started to increase, somebody important from Moscow realised that it is possible to make money on amber. They came over and took everything. When amber was cheap, nobody needed it, and now, when its prices are very high, many people would like to profit from it. The people appeared who don’t know the industry, they have mined and sold everything to China. And they have managed to make a thief out of me in the process. I have won the lawsuits in Russia. So what...?  

How is the story of the amber king going to end?  

I don’t know, as I am not the one writing it. What is worse, I have very little influence on what is going to be written. Regardless of everything, I am trying to live and work normally. Even though I am aware that I may lose everything again.  



Anna Sado

Anna Sado

Trade journalist specialising in jewellery related topics. Since 2007 has been co-creator of the amber portal amber.com.pl

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