With the government notifying the gold monetisation scheme last week, Kerala-based Muthoot Pappachen Group has set itself a target of processing 80 kg jewellery by March next year and 200 kg by March 2017. The company, which opened its first Gold Point in Mumbai today, has already recycled 45 kg gold at its three centres - Coimbatore, Chennai and Delhi. The 128-year-old company runs gold recycling business under Muthoot Gold Point, an arm of its flagship Muthoot Fincorp.
The Mumbai centre is the fourth Gold Point and the company plans to open three more by the end of current financial year and take the number to 17 by the next fiscal. "We will be opening three more Muthoot Gold Points this year in Andhra, Telengana and Gujarat/ Rajasthan. With these seven centres, we hope to recycle at least 80 kg of gold jewellery.
Our objective is to recycle 200 kg by next fiscal year end," Muthoot Fincorp executive director Thomas Muthoot told PTI. As per the World Gold Council, gold recycling is very low in the country with about a paltry 0.5 per cent of total stock of gold of around 22,000 tonne recycled annually. Keyur Shah, chief executive of Muthoot Precious Metals, an arm of Muthoot Fincorp, said most of the 45 kg of recycling has been done at the Coimbatore centre, which was set up six months ago. The Chennai and Delhi centres are just two months old. On an average, each customer brings in 40 grams of jewellery, he added. Shah said the company does not refine gold bars but gets its done through Infinium Precious Resources, a Mumbai-based bullion refiner. They also have a tie-up for technical training.
Explaining the rationale, Muthoot said, the Gold Points recycle gold jewellery into bars at a nominal cost and the entire process is transparent. Unorganised players, who dominate the market, deduct 10-15 per cent of the weight as processing charges and dont disclose the buy-back price, while Gold Points charge only a flat 2 per cent of the jewellery as processing fee and return or buy-back hallmark purity gold bars (99.6 per cent purity).
He, however, was quick to add that the company does not certify the purity as it is not permitted to do so. Muthoot said the company has applied for certification permission to the government and an answer is awaited. He said if the government wants to make this scheme successful, it has to take private players into confidence as the 350 BIS-authorised hallmarking centres cannot take the load if the scheme becomes a success.