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AngloGold Ashanti explores Saudi gold market to boost its exports

According to Thero Setiloane, executive officer, marketing, AngloGold, who visited Saudi Arabia to get first-hand information on the gold market, there is a tremendous capacity for growth in the gold market as per capita consumption of gold in the Kingdom is one of the highest in the world. "The per capita gold consumption in Saudi Arabia is about 5 to 7 grams, which is much more than in some other countries," he said.

AngloGold, which has the biggest gold refinery in the world, is headquartered in South Africa and listed in South Africa, Australia and New York, with shares trading at around $42 lately.

"We are trying to boost our gold exports to the Kingdom as there is a pickup in religious tourism which is open throughout the year," he added.

He said they had held discussions with industry leaders, with jewellers here and they believe there was a lot in common. "We have seen interest in improving the quality of the manufacturing side and also consumer experience when they are buying the gold," Setiloane said.

"We are looking at the demand side of our business in the Kingdom for gold jewellery, gold investment products and gold bars. We spend some time with L'azurdi, which is a partner of the World Gold Council (WGC) in a project. We also visited the National Commercial Bank (NCB) office, gold importers in Saudi Arabia to explore more avenues to boost gold exports into the Kingdom," he added.

Rian Raghavjee of AngloGold's, marketing department, said that nowadays consumers are becoming brand conscious so the gold industry needs to modernise to meet the expectations of the consumer. According to him, three objectives are applicable throughout the world in gold projects — the creation of brands within gold jewellery, design quality of the product to make gold products fashionable and trendy and marketing.

"How many retailers spend money on gold advertisement? If you pick up any magazine, you will find ads about perfume, cell phones, watches and so on. But what about gold?" he asked.

Raghavjee said that there are two types of consumers in the gold market in the Middle East and India. One is the traditional consumer who buys for traditional ritual use such as weddings, and the other is the modern consumer who buys for fashion and style.

He said industrial application of gold grew 9 percent last year. There are four take-off sectors, which WGC focuses on in terms of promoting demand for gold. Jewellery takes the major chunk of demand of about 70 to 75 per cent, followed by investment coins and bars. Then the official sector — central banks that buy and sell gold, and the industrial sector.

Setiloane, who is currently chairman of the Rand Refinery and is also a member of the executive committee of the WGC, said they were teaming up with industrial companies around the world and looking at research for other uses of gold in order to spread demand for the precious metal.

"India is a very important market for the gold sector. It is the largest single gold consuming country. We are trying to modernise the industry in India in terms of design, branding and quality," he said.