Poh Kong eyes Asean marts

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/19EMAS/Article/

Published: September 20, 2012
By HAMISAH HAMID

POH Kong Holdings Bhd, the country's largest jeweller by revenue and size, plans to open overseas outlets in Asean before 2015.

Executive director Ermin Siow said the company may establish outlets in Indonesia and Vietnam, to take advantage of the setting up of the Asean Economic Community (AEC) by 2015.

He said when the AEC is in place in three years' time, companies in the region will benefit from the free movement of goods, services, investment, labour and capital.

"Currently, there is a 5 per cent Common Effective Preferential Tariff on gold within Asean, which for jewellers, is quite high," he told a media briefing here, yesterday.

In Asean region, Indonesia, Thailand and Vietnam are among world's key gold markets.

Poh Kong, which will announce the results of its financial year ended July 31 2012 next week, is on track to report better performance.

Siow said by the third quarter, the company had already surpassed its 2011 results. For the year ended July 31 2011, Poh Kong reported a record net profit of RM41.21 million on the back of a RM692.42 million revenue.

He said based on an annualised basis, the company's revenue would be about 25 to 30 per cent higher than last year's.

The growth in sales was contributed by the opening of new outlets, high gold price and expansion of sales in existing outlets.

Poh Kong, which currently has 101 outlets in the country and will open one more in December, is cautiously optimistic of the outlook in 2013.

Siow said the company has survived previous economic crises and if there is no major change in the upcoming general elections results, Poh Kong can expect quite a rosy outlook next year given the anticipated increase in gold price.

On the global gold trend, Siow expects demand to increase for the next few years due to expectations that the US dollar and the euro will fall and that people will diversify their investments into gold.

Gold price is expected to reach US$1,800 to US$2,000 per ounce by end of this year from US$1,571 per ounce as at end of 2011.

"Demand is still more than supply, because even if the consumption of gold falls, the official purchase (by central banks) is likely to increase. So, I don't think the price will collapse," he said.

Malaysia exports between 50 and 60 tonnes of gold jewellery annually while domestic gold consumption is between 20 and 30 tonnes.

Siow said about 10 per cent of gold consumption in Malaysia is for investment and this figure is expected to increase.