Made-in-Malaysia exquisite gold jewellery glitters in international markets as gold loving foreigners make a beeline to snap up the uniquely designed high-fashion ornaments.
Designed purely by Malaysian craftsman, elegant contemporary gold bangles, pendants and ear rings, make it way to classy showrooms around the globe from Dubai, Germany, Hong Kong to Japan.
Yearly, local goldsmiths export approximately 60 metric tonnes (MT) of finished gold products that has helped Malaysia squeeze itself into the crowded elite exporters club.
Traditionally, a handful of family-run businesses had controlled the trade and a generation later enterprising entrepreneurs turned around these cottage industries into luxury retail outlets, a sector now worth approximately RM7 billion.
With rising gold prices and soaring demand, Malaysian goldsmiths are now laughing all the way to the banks.
Federation of Goldsmith and Jewellers Associations of Malaysia deputy president Ermin Siow Der Ming said locally designed and manufactured gold ornaments are popular, largely due to the intrinsic beauty and this he attributes to Malaysia’s rich mixed-ethnic culture.
“Malaysia’s jewellery designs are unique because of our diverse cultural background.
Malays like floral designs, Chinese prefer geometrical and Indian customers prefer lot of handiwork on the products.
“This jewellery is gaining a reputation worldwide,” Siow told The Malaysian Reserve in an interview recently.
According to the International Trade and Industry Ministry statistics, gold jewellery, silver and platinum exports are growing year-on-year — from RM5.4 billion in 2010 to RM6.2 billion last year.
In the first six months of this year, exports touched RM3.7 billion compared to RM3.3 billion over the same period last year.
Penang Goldsmith chairman George Lo Siew Cheong said the weakening ringgit against the greenback could further push up exports in 2013.
“The lower exchange rate will favour exporters of jewellery.
I foresee the export volume will increase during the second-half of the year, also due to the relative lower gold prices,” he said.
Malaysian gold ornaments are of high quality, made of 20 carat or 24 carat gold, and comply with international standards, making it more salable at the international market.
At least 80% of the exports are enroute to Dubai, in the United Arab Emirates, where it is redistributed to other international markets.
Local reputable players like Tomei Group, Niche Capital Emas Holdings Bhd (formerly known as Yikon Corp Bhd), DeGem Bhd and Habib Jewels Sdn Bhd have gone global with their superior quality products.
However, the maturing domestic industry needs to compete with giants like China, India and Italy, and close to home Thailand — all famous for their cutting-edge branded jewellery.
Gold-adoring India, the world’s top in the business, exported jewellery and gems worth US$38 billion (RM122.89 billion) in 2012, China was second with US$30 billion and Thailand ranked 12th globally with exports totalling US$13 billion.
“There is recognition in Asia now, but a long way to go to be a global player like China or India. Branding is still lacking,” said Mercury Securities analyst Edmund Tham.
At the domestic end, outlook has been a rosy for the industry over the last decade when the yellow metal’s price started to increase, which witnessed more Malaysians going on a gold-buying spree.
Many consumers started procuring gold items as a safe investment product and a good hedge against inflation.
Malaysian retailers are bracing for another six-month bullish run, largely fuelled by the festive mood.
“We are quite optimistic nationwide retail sales will increase in the region of 20% to 30% (from June to December) over the first-half of 2013, both in finished gold jewellery and investment bars,” said Siow, also the executive director of reputed jeweller, Poh Kong Holdings Bhd.
Meanwhile, Lo says the gold jewellery business is economic sensitive and a seasonal oriented trade.
“Sales will be good during the last two weeks before Hari Raya Puasa, Deepavali and some wedding season’s months of the Chinese calendar,” he added.
The current price of gold is hovering around RM136 per gramme (24K).