By Thanh Thuong - The Saigon Times Daily
HCMC – Gold bar processors producing their own brands will have to restructure operation to concentrate on trading activities once a draft on gold market management becomes official rules.
As per the draft released by the State Bank of Vietnam (SBV) at the end of last month, there is a high possibility that only Saigon Jewelry Holding Co. (SJC) is allowed to produce gold bars. This means that other local gold bar manufacturers have no choice but to change their business activities accordingly.
Nguyen Ngoc Que Chi, general director of Sacombank Jewelry Co. (SBJ), expressed a deep regret over SBJ brand but affirmed that her company was ready to comply with the imminent decision by the central bank.
Chi added that SBJ would focus on trading gold bars and producing jewelries and would seek to sell out existing machines that have been used to produce gold bars until now.
Other gold processors have taken similar moves.
“Since the beginning of the year, we have secured land to build a jewelry factory near Hanoi to adapt to the situation when gold bar processing would be limited,” revealed Nguyen Thanh Truc, chairman of Vietnam Agribank Gold Joint Stock Co. (AJC) that produces gold bars of the brand AAA.
In fact, sales of AAA gold bars account for only 15% of AJC’s total revenue and the remaining revenue has mainly come from gold and jewelry trading. Therefore, it is expected that the enterprise’s business result will not be much affected by the new regulations to be issued by the central bank.
Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry Joint Stock Co., (PNJ), asserted her business would be significantly influenced under such a new circumstance. However, Cuc told the Daily that PNJ planned to concentrate on processing jewelry, a business operation that has generated most of its profits.
Meanwhile, Nguyen Minh Chau, general director of Bao Tin Minh Chau Jewelry Co., insisted that this is a good opportunity for his firm to restructure operations by expanding its jewelry and gold bar distribution channels.
In related news, gold traders said any enterprise wanting to have gold bars produced at SJC has to apply for the license from the central bank, rather than merely talking with SJC as previously practiced.
SBJ has had to ask the central bank for such permission to process gold bars at SJC for the last two weeks. Similarly, representatives of PNJ and SJC confirmed the same procedure, saying they had to present SJC with customs declaration and quota licenses granted by the central bank.
The move is believed to prevent smuggled gold from penetrating into the local market.