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Bank of China

The Swiss gold refiner working to make Bank of China (Hong Kong)’s centenary celebrations that little bit special

BOCHK has commissioned three sizes of gold bar to mark the occasion. The heaviest is 1kg, which will go on sale from next month, while the two smaller sized ones have been available since April

PUBLISHED : Wednesday, 27 September, 2017, 8:29pm
UPDATED : Wednesday, 27 September, 2017, 11:03pm

The Swiss gold refiner responsible for minting the Bank of China (Hong Kong) centenary gold bar is already busy on its next Chinese order – bars with puppies on them, to celebrate the next year’s Year of the Dog – underlining just how important the Chinese gold market has become globally.

PAMP, part of MKS PampGroup, has been in business since 1977 and claims to be the first to put artistic images on small bullion bars, instead of the tradition of simply stamping them with makers’ marks and weights. It will also custom design bars to order.

“We have received a lot of orders for dog designs to celebrate the Year of the Dog,” said Marwan Shakarchi, chairman of MKS (Switzerland), at his office in Geneva.

The firm offers a full range of animal gold bars, depicting each of the 12 animals representing the Chinese Lunar calendar.

BOCHK also launched a banknote this week to celebrate its 100th birthday and commissioned Shakarchi’s company to design and make three sizes of bar to mark the occasion.

The largest is 1kg, which will go on sale from next month, while the two smaller sized ones have been available since April.

PAMP’s client list is certainly varied, including Unesco, Formula One, and some Indian banks, but individuals also commission them for special occasions, such as weddings and births.

“We are completely flexible – our biggest order was from an Indian bank which wanted its own small gold coins made, ranging in size from 1 gram to 5 kilos,” he said.

The gold maker is often the designer too, working from themes suggested by customers – in the case of BOCHK, the bullion bars are dominated by the iconic Bank of China Tower.

PAMP needs about two weeks to make a sample for client approval, and can then start minting.

“The most challenging part of the whole process is to create a model which can show clearly the very delicate designs often needed on gold bars,” he said.

The company also designs its own products, with its most famous the “Lady Fortuna”, which Shakarchi says have sold in their tens of thousands, and are still selling well.

The firm has also produced a Lady Fortuna gold watch in the past for Po Sang Bank in Hong Kong, now part of BOCHK.

“Previously, gold shops sold bars without any design, but it was PAMP which first considered decorated bars could become strong sellers. This has proven a good way to add value to a gold bar, turning them into art products and collectors’ items,” he said.

MKS was founded and named after his late father, Mahmoud Shakarchi, who was a Lebanese gold wholesaler who handled gold sales for central banks, including in the Middle East.

Shakarchi Snr and his family moved to Switzerland and set up MKS in 1979 to continue to trade gold, but he passed away in 1983, aged 62.

Shakarchi was just 22-years-old at the time and joined his elder sister Karma to run the company and has since expanded it internationally to offer a range of gold-related businesses from trading and refining, to mine financing and gold storage, as well as acquiring PAMP, as its wholly owned subsidiary.

Nowadays the company has 800 staff spread mainly across Asia-Pacific and the Middle East, including operations in Istanbul, Kuala Lumpur, Dubai, Singapore, Hong Kong, Shanghai, Delhi and Sydney.

But 55 per cent of worldwide gold sales are now to India and China, with its Hong Kong office opened last year to handle the bulging China market.

When he first ran the company, China had only just started its economic reform, and was not considered a valuable gold market, and India was also yet to take off.

When Saudi Arabia was the largest gold buying country in the 1980s, the country bought about 200 tonnes per year. This is now equal to an average one month’s purchase from China, with December the most popular month
Marwan Shakarchi, chairman MKS (Switzerland), which owns PAMP the gold refiner which has produced BOCHK’s centenary gold bars

But the growing wealth of both countries has boosted demand, as traditionally people like to buy gold for investment, or for presents to family and friends.

“When Saudi Arabia was the largest gold buying country in the 1980s, the country bought about 200 tonnes per year. This is now equal to an average one month’s purchase from China, with December the most popular month,” he said.

And Shakarchi believes the internet will prove a further fillip to the industry, with online gold sales growing.

The firm recently teamed up with PayTM, an Indian e-commerce platform, to sell chunks of the yellow metal as light as 1 gram – the equivalent of 1 Indian rupee – and now the team is looking for a partner to replicate the business model in China

“Even in this digital era, we still see a lot of people wanting to buy gold for investment, or just for pleasure,” he said.

“Whenever there is international political tension, gold is a safe haven. The quarrel between North Korea and the US, as well as other economic factors, will continue to drive the gold price up long term.”

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