Gold Silver Reports — Recycled gold volumes up 45-60%, Muthoot group to collect 1 tonne recycled gold by 2018-end
With price of gold crossing ` . 31,000 per 10 gm, jewellers have seen a 45-60% increase in recycled gold volume at the stores in the past two months .
Taking advantage of this trend, jewellers such as Muthoot Pappachan group’s Precious Metals division has decided to use this recycled gold for its Swarnavarsham scheme, which is targeted at the bottom of the pyramid, thereby cutting its dependence on gold imports .
Recycled gold volumes up 45-60% Muthoot Group
Talking to ET, Bachhraj Bamalwa, director of Kolkata-based Nemichand Bamalwa & Sons, said, “While earlier, recycled gold constituted 15% of our gold requirement, it has now shot up to 45% because of the price rise.“ Gold prices have risen 25% from the beginning of this year .
Jewellers from Maharashtra said the increase in recycled gold volume at their stores has shot up by 60% in the past two months. “Some of them have sold old gold to have some liquidity in hand while others have used it for new jewellery. This has also resulted in imports reducing by half in the first six months of this year,“ said Sau rabh Gadgil, managing director of Pune-based PNG Jewellers .
Muthoot Pappachan group, which has already collected 140 kg of gold so far through their newlyintroduced gold recycling centres, will start recycling this once they touch 1 tonne which they expect to achieve by the end of 2018, according to Keyur Shah, CEO, Precious Metals, Muthoot Pappachan group .
The group has 8 recycling centres across India. As of today , a very miniscule amount of gold -only 150-200 tonnes of the 20,000 tonnes of India’s total gold stocks -are recycled annually , and that too mainly by the unorganised sector .
“We have to pay huge margins if we have to procure gold from outside. Here, we will be using the gold already available in India.This is almost similar to what the government has been trying to do through their gold monetisation scheme,“ Shah said .
Muthoot’s Precious Metals division has opened recycling centres where customers can sell their old gold and get the buying rate on payment of 2% as service charge in contrast to traditional jewellers who charge a 10-15% cut on old gold, said Shah. Gold collected in this fashion will be used to fund the Swarnavarsham scheme where people, mainly in the low-income bracket, can buy standardised gold weighing anywhere between 1.5 gm and 9 gm by paying an EMI on a daily, weekly or monthly basis. Around 95% of Muthoot’s Precious Metals division’s 1,20,000 clients belong to this lower income bracket. “This is a micro business and there is no competiton yet,“ Shah said. — Neal Bhai Reports