Having been in the business of bullion trade since 1988, MMTC has come of age. From being a net importer of gold and silver, it is now turning its attention towards tapping the huge market potential that the retail market holds by venturing out to market “pure gold”.
Cashing in on the growing craze for the yellow metal in the country, MMTC is embarking on a major expansion of retail outlets and also aims to tap the potential of youth by launching branded jewellery targeted at Generation X.
The company is also contemplating to take the “Festival of Gold” concept to various parts of the country and is upbeat on demand for gold being on the rise.
Sujay Mehdudia caught up with Ved Prakash, Director (Marketing), MMTC, and talked about the bullion market, import of gold, demand for the yellow metal and how the PSU plans to deal with the emerging scenario. Excerpts:
What is your estimated target for gold import this financial year as compared to the past two years?
We have planned to achieve an import target of 175 million tonnes of gold and more than 1,100 million tonnes of silver this year.
Overall, MMTC achieved a turnover of around Rs.45,000 crore in the bullion sector. Imports were reflective of market trends wherein, during April-October, 2011, there was a phenomenal growth.
Post-October 2011, due to weakening of the rupee vis-a-vis dollar and economic factors related to eurozone crisis, imports declined. The customs duty hike in January, 2012, followed by another hike in March, 2012, resulted in lower offtake of gold and silver by the industry. During 2011-12, a total of 170 million tonnes of gold was imported against 245 million tonnes in 2010-11. Similarly, 1,100 million tonnes of silver was imported in 2011-12 against 900 million tonnes in 2010-11.
What are MMTC's business plans in the precious metals sector?
MMTC's retail precious metals business has achieved around 35 per cent growth in last fiscal. It has targeted an expansion of increasing the number of outlets and showrooms to 200 in the next two years. These outlets will aggressively market MMTC's gold and studded jewellery, including medallions and bars. We will also celebrate our Golden Jubilee year with more gold festivals, events and showroom launches in Delhi-NCR (Northern Capital Region) and other cities.
What is the present status of MMTC's joint venture with PAMP SA?
MMTC-PAMP SA will be shortly commencing refining of gold and silver from imported raw material.
Silver coins, pendants and silver bars manufactured by MMTC-PAMP were sold in retail during the Gold Festival in Delhi recently.
The project has an investment cost of Rs.200 crore and gold/silver medallion of .999 purity manufactured in the state-of-the-art facility with world-class quality and proof finish would be retailed by MMTC through the exhibitions.
Civil works have been completed at the plant site at the Roj Ka Meo industrial estate, Haryana (near Sohna), and commercial production has commenced since April, 2011.
Could you elaborate further on MMTC plans to launch new branded jewellery targeted at Generation X?
MMTC is planning to launch its own brand of teenage jewellery soon to target young customers.
The company will focus on introducing trendy jewellery for the young generation, which would be moderately priced and yet stylish. The range will comprise contemporary designs and MMTC has contracted young jewellery designers to work on the same.
The ‘teenage jewellery' brand will target school and college girls as in the changing trend, young adults are making independent purchases, especially during the festival season.
Since young girls also like to sport silver jewellery, MMTC introduced a special range of affordable and chic silver earrings, rings and pendants as well.
What are the company's plans for the silverware brand?
MMTC's own brand of sterling silverware in 92.5 per cent purity by the name of Sanchi has over thousand varieties in different categories to meet individual as well as corporate requirements for gifting purpose or for own use. We plan to increase the number of company showrooms that will retail Sanchi products.
Sanchi is known for its exclusive designs, quality and spectacular craftsmanship and is guaranteed for purity. MMTC is creating new designs of Sanchi silverware in line with fast-changing market trends. Many large orders from corporates are already being serviced by MMTC.
How do you see 2012-13 evolving in view of the rising gold prices and slow economic growth?
MMTC has been able to achieve a 35 per cent growth in the last fiscal, despite downward trend in the economy. Growth has been substantial in retail sales of silverware, silver/gold medallions and gold jewellery. An ambitious growth target of over 25 per cent is planned for retail products during 2012-13 over the previous year's sales of around Rs.650 crore.
In view of the hike in customs duty and lower margins, MMTC is reviewing the consignment model for bullion. Efforts are concentrated on targeting corporate/institutional manufacturers and offering value-added services.
MMTC is also introducing coloured silver pendants with superior quality finish hitherto unavailable in the Indian market.