Saigon Jewelry Company wants government monopoly on gold bar production to go

By Minh Son   May 16, 2024 | 11:06 pm PT
Saigon Jewelry Company wants government monopoly on gold bar production to go
Saigon Jewelry Company CEO Le Thuy Hang speaks at a meeting in Ho Chi Minh City on May 16, 2024. Photo by VnExpress/An Phuong
The state-owned Saigon Jewelry Company has called on the government to relinquish its monopoly on gold bar production and allow businesses to import and make bullion.

The government allows only SJC to restore damaged gold bars, but the company gains nothing from it, CEO Le Thuy Hang said at a meeting with HCMC officials Thursday.

"Although people think we benefit from the monopoly, we actually do not gain anything from it even when domestic gold prices surge over global rates."

She was referring to the fact that SJC is a national brand and gold bars carry its logo, but it does not actually produce any bullion.

The government assumed the monopoly in 2012, before which some businesses were allowed to import gold.

But it did not result in any advantage for SJC, which saw its profits plunge from VND400 billion ($15.72 million) a year before 2012 to less than VND100 billion subsequently.

No longer allowed to produce gold bars, SJC switched to making jewelry, and after years of struggling it only started making profits from it six years ago.

Hang said after the monopoly was created the gap between domestic and global gold prices has widened steadily.

At VND89.9 million ($3,532.76) per tael, Vietnamese prices are now 20% higher than the global spot rates. A tael equals 37.5 grams or 1.2 ounces.

Hang said allowing businesses to import gold and make bullion would also help reduce gold smuggling.

The government has tried to intervene in the gold market in recent months to increase supply and slow down the rise in prices.

It has auctioned over 27,000 taels in recent weeks.

Nguyen Duc Lenh, deputy director of the State Bank of Vietnam, said gold prices have been rising due to geopolitical tensions and global central banks buying the precious metal.

Deputy Prime Minister Le Minh Khai earlier this week instructed the central bank to complete its gold market examination report and publish it by Friday.

He also wanted the gap between domestic and global prices reduced.

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