The state-owned Saigon Jewelry Company (SJC) has urged the government to end its exclusive control over gold bar production and allow businesses to import and manufacture bullion.
Currently, SJC is the only company permitted to repair damaged gold bars, but this offers no financial benefit, according to CEO Le Thuy Hang. Speaking at a meeting with Ho Chi Minh City officials on Thursday, Hang explained, “People assume we benefit from this monopoly, but in reality, we gain nothing, even when domestic gold prices soar above global rates.”
Despite being a national brand with its logo on gold bars, SJC does not produce bullion. The government established this monopoly in 2012, ending a period when various businesses were allowed to import gold.
The monopoly has not favored SJC. Its profits dropped from VND400 billion ($15.72 million) annually before 2012 to less than VND100 billion afterwards. As a result, SJC shifted its focus to jewelry production, achieving profitability in this sector only six years ago after years of struggle.
Since the monopoly was created, the gap between domestic and global gold prices has widened. Vietnamese gold prices currently stand at VND89.9 million ($3,532.76) per tael, 20% higher than global rates. A tael is equivalent to 37.5 grams or 1.2 ounces.
Hang believes that permitting businesses to import gold and produce bullion would help reduce gold smuggling. In recent months, the government has attempted to increase supply and curb price rises by auctioning over 27,000 taels of gold.
Nguyen Duc Lenh, deputy director of the State Bank of Vietnam, attributed the rising gold prices to geopolitical tensions and central banks globally buying more gold.
Earlier this week, Deputy Prime Minister Le Minh Khai directed the central bank to finalize and publish its gold market report by Friday. He also emphasized the need to narrow the gap between domestic and global gold prices.