Krugerrand aims to regain glitter
SOUTH Africa's Krugerrand is looking to a fresh lease of life as the country savours its new-found acceptance abroad, and as gold regains its shine as an investment.
The gold coin's worldwide sales have, in 27 years, doubled those of all competing coins combined, but sales promotions ceased when trade sanctions and other anti-apartheid curbs were imposed on South Africa in 1985.
As the new South Africa dawns, however, it is again being promoted and its backers expect it to regain its former appeal.
''We're convinced that when the market for consumer gold products picks up, the Krugerrand will again be at the forefront of bullion coins,'' says Daniel Pollnow, gold marketing consultant to the Chamber of Mines of South Africa.
The scrapping of sanctions and an improving gold price enabled the chamber to resume its international marketing drive for the Krugerrand last October, after an eight-year suspension.
The campaign was relaunched in Germany and, following the country's first all-race elections, it will next month turn to the United States - once a top market.
The Krugerrand, originally launched in 1967, accounted for seven tenths of world coin sales between 1970 and 1989, which totalled 2,000 tonnes. But foreign sales dried up with sanctions.
Yet Mr Pollnow is encouraged by research undertaken to support the relaunch, in spite of the advantage competing coins from Australia, Austria, Britain, Canada, China, Mexico and the US enjoyed from sanctions.
''It's South Africa's best known product, its only world brand name,'' he said. ''In terms of awareness, no coin comes near it.'' Before active promotion resumed in Germany, for instance, 56 per cent of adults knew of the coin without having to be prompted and nearly 20 per cent of the population owned at least one Krugerrand.
He said the new sales drive had met significant interest in Germany, where it was estimated the Krugerrand accounted for half the total gold coin trade.
However, because promotions had been on hold for years, demand since October had been met from stocks which had built up in the trade during that time.
Chamber of Mines officials believe that prospects for gold, and hence sales of new coins, are improving after a decade of slack interest among investors.
''Now we think that cycle's changed,'' said Chamber of Mines chief executive Tom Main, adding investors were again turning their attention to the metal. ''I think we're moving into an exciting phase for the gold market.'' Even so, the chamber expects no Krugerrand sales miracles.
Other coin manufacturers had exploited the Krugerrand's low profile, the range of gold and gold-related products had expanded, and it would have to compete fiercely with other consumer goods ranging from designer clothes to electronics.
''There's just so much disposable income out there and we're competing for part of it,'' Mr Main said.
But at the same time, widespread liberalisation of markets in recent years had removed constraints on ownership or purchases of gold in countries ranging from France to China, India and Indonesia.
''At this stage, we are positioning ourselves for the day the market becomes buoyant again. We'll be in place. We'll be ready to go,'' Mr Pollnow said.