According to Ms. Cao Thi Ngoc Dung, a safe favorable business environment will help people trust to put gold in investment and development of production.
Ms. Cao Thi Ngoc Dung – Chairman of BOD and CEO of Phu Nhuan Jewelry Joint Stock Company (PNJ) shared with VnExpress about unexpected developments of the domestic gold price after Brexit event and the ability to mobilize precious metals to create resources for economic development.
Ms. Cao Thi Ngoc Dung – Chairman of BOD and CEO of Phu Nhuan Jewelry Joint Stock Company (PNJ)
- What is your opinion on the proposed mobilization of 500 tons of gold among the population to generate capital for the economy?
– The mobilization of hoarded gold as economic development funds is essential. To attract capital from the citizens, the State should have a plan to effectively use, implement risk management and preserve gold when giving back to the people, and ensure funds for inflation etc. In case of mobilization without considering a specific business plan, risks will be very high on interest rates and the value when the price of gold changes constantly.
In my opinion, the most radical is to create a favorable business environment in order to stimulate the local people to offer gold rather than feeling worried to store. If people have confidence of the market rebound, they will voluntarily invest funding into business development. Investment here is too large, it comes from stimulation of consumer purchase, pouring into real estate, business expansion, business establishment etc.
In addition, the State should build a professional gold exchange, consistent with international practice, executive management team with capacity, specialized technique. This will help the gold market to be standardized and centralized, ensuring the circulation, easy to monitor and regulate. This channel is also attracting people to put gold into exchange when the market has transparent operation and fair competition.
- The Brexit event has a strong impact on the world price of gold, causing many experts say the price could hit a record of 1,400 USD an ounce. How will this impact act on the domestic gold market in the coming period?
– The world evolutions have not much impact on domestic gold price because we have long cut off communication with the outside. So, there are times when the international gold price gets higher but the domestic price fails to catch up, or when their price decreases rapidly, our price falls down slowly because of not operating under the rules of “communicating vessels”. We have a habit of “buying at rising price, selling at falling price,” but this is largely influenced by the psychology of people.
Whenever a sudden change happens, people rush into purchases following the crowd rather than based on economic analysis. People rush to buy, gold companies due to lack of gold supply sell in drops or create far distance between selling price and buying price to curb demand. But when people find it scare and have to write a promissory note to buy gold in drops, they are getting worried, fighting to buy causing the “virtual” fever.
If we build a gold exchange, this will help solve this situation thanks to a link with the world market. With a rising demand of people, businesses immediately buy gold outside to meet their demand. Thus, supply and demand are ensured of balance, reducing scarcity which affects prices.
The recent market volatility is just for a while, this cannot be said to have a long-term impact. Moreover, the readiness to stabilize the gold market of the State Bank also helps people feel more secure. Therefore, consumers should avoid rushing into transactions, should analyze multidimensional information to make rational trading decisions.
- In addition to not accessing the world’s raw gold, what difficulties do businesses of precious metals in the country still face?
– Recently the Vietnam Gold Business Association has sent a letter to the Prime Minister to propose to solve the difficulties in accessing the capital of gold businesses.
Namely it is necessary to change the Circular 33 of the State Bank regulating credit institutions not to lend businesses to buy gold for production and business. Enterprises of gold jewelry and fine art can get loans only when approved by the Governor of the State Bank. However, since this decree took effect, the Governor of State Bank has not approved any gold businesses to borrow funds to buy gold for production and business.
This regulation on credit restrictions makes gold companies to meet many difficulties due to lack of funds. To solve this problem, businesses must promote to use their equity, maximize loans to buy more raw materials rather than gold such as silver, diamonds, precious stones etc.
Quy định hạn chế tín dụng này khiến những công ty sản xuất và kinh doanh vàng gặp nhiều khó khăn vì thiếu nguồn vốn. Để giải quyết vấn đề này, doanh nghiệp phải tăng cường dùng vốn tự có, tối đa các khoản vay để mua những nguyên liệu khác không phải là vàng như bạc, kim cương, đá quý…
Also the State should also allow enterprises to import raw gold to ensure the input quality, increase competition, take the initiative in production, and meet the domestic demand and exports.
- So where does PNJ’s main revenue now come from?
– In order to optimize funds, we reduce trading of gold bars, 24K jewelry, non-core divestment, focus on core capacity of jewelry production (14K, 18K, silver jewelry, precious stones etc.). Besides, the company focuses on retail development, cost reduction and development of a distribution system, improvement of management system, selection of segment of profitable products with least gold material, offering many products with high added value such as diamond jewelry, gemstone.
For the first 6 months of this year, the company has had gross profit of 699.6 billion VND, increased by 30% over the same period, completing 54% of the calendar year plan. Total revenue is 4,046 billion VND, of which revenue of jewelry increased by 15%. Profit before tax reached over 116% over the same period, increasing to 304.5 billion VND, accounting for 66% of the calendar year plan.
Ms. Cao Thi Ngoc Dung in a community activity.
- Recently, Forbes magazine honored you as one of Asia’s powerful businesswomen. Can you share your experiences in operation, especially in the field of gold with rare businesswomen?
– I do not think that I am a woman with power. I only have a role to affect businesswomen, young entrepreneurs or college students, helping them add passion, motivation of enrichment, business development. The awards bring joy but also increase the pressure so that I can complete my responsibilities, worthy of recognition by the business community and society.
I just make every effort with my best partners and a solid team from top to bottom. Thus, PNJ has earned many “sweet fruits”. PNJ highlight from early 2016 to date is opening 13 new stores and branches.
The company now has a total of 204 stores in more than 45 provinces and cities with the unified visual identity, luxury sales space with a team of professional counselors. The PNJ-branded jewelry centers have prime location in shopping centers in the big cities.
Casual image of PNJ’s woman leader
- Regularly picking up rubbish with employees, calling for environment cleanup, giving homes to the poor, how can you act in many different roles?
– Since its establishment PNJ has always followed the principle “Put the customer benefits, social benefits into business benefits.” Therefore, in addition to efforts to gain sustainable business growth, raising the prestige and brand value on the fashion map, international jewelry, I always try to arrange to participate in social activities, volunteer work. Luckily, I have my family’s support, sharing, encouragement so I can dedicate myself to the company, participate in community activities for environmental protection.