A deal is going to be finalized between Jeweller Rajesh Exports Ltd (REXP.NS) and Valcambi, the Swiss company, in which Rajesh Exports, the largest gold jewellery maker of the world, is going to buy the largest gold refiner of the world, Valcambi. The deal is said to be finalized at $400 million and it will help Rajesh Exports in getting raw material at lower cost and also help Rajesh Exports in increase their business at home using the technology of Valcambi.
On Monday, Rajesh Mehta, chairman of Rajesh Exports told Reuters that the output of Indian refinery will be increased to 200 tonnes per year from next year in comparison to 80 tonnes at present, making the proper use of Valcambi’s technology. Rajesh said that 30-35 percent cost of acquisition will be borne by Credit Suisse, which owned Valcambi once, and the remainder will be paid by Rajesh Exports.
Rajesh also said in a press meet “Valcambi can fulfill entire gold requirement of India.”
India’s annual consumption of gold is approximately 900 tonnes per year and Valcambi can refine 1600 tonnes gold per year, which is almost two times to what is India’s demand.
Analyst of B.N. Vaidya Associates, Bhargava N. Vaidya said, “Valcambi has world class refining technology. So it will help the Indian company in setting up or expanding refining capacity if it wants.”
Michael Mesaric, Valcambi Chief Executive told Reuters, “Nearly 50 percent of our gold bars lands in India through direct and indirect channels like banks. Now we can sell gold bars to many more customers directly.”
Michael also said that Valcambi would like to utilize Rajesh’s technical know-how to produce new gold goods in the European markets.
Shares of Rajesh Exports closed at Rs.540.85, which was 1.6 percent higher; it has also achieved Rs.549.70 as its all time high in the day. In 2015, the share value has increased four times.
Isn’t it something every Indian should be proud of? Indeed, it is! What is your opinion in this regard? Share your views about it in the comments section below.