Tag Archives: PAMP

Degussa Singapore Closing its Bullion Store

Just 2 years after opening its first precious metals store in Asia, on Orchard Road in Singapore, German company Degussa GoldHandel has now surprisingly announced the imminent closure of this store.

According to the Degussa Singapore website:

Degussa Singapore will cease its retail operation at 22 Orchard on the 31 October 2017.

A Singapore branch of Degussa was opened by German company Degussa GoldHandel in October 2015 as part of its international expansion strategy, wherein it saw Singapore as a location that it regarded “as having a high growth potential for Degussa.” Degussa Goldhandel is a shortened version of Degussa Sonne / Mond Goldhandel GmbH, the full name of the German corporate parent.

Degussa operates in Singapore as “Degussa Precious Metals Asia Pte Ltd”, and is known as Degussa Singapore. Degussa Singapore had offered Degussa branded precious metals bars, a range of precious metals coins and collectibles, and storage facilities in the form of safety deposit boxes and other secure storage facilities.

Degussa GoldHandel also operates 10 bullion product stores in Germany as well as branches in Switzerland (Zurich and Geneva) and Spain (Madrid). Degussa GoldHandel also fully owns London bullion dealer Sharps Pixley in central London.

Degussa’s exit from Singapore so soon after committing to the Singaporean and wider Asian market is surprising, but may be related to its loss-making financial position. For the full year ended 31 December 2016, Degussa Precious Metal Asia Pte Ltd registered a net loss of SGD 2.8 million on revenues of SGD 59 million. At the same time, Degussa Singapore’s total liabilities exceeded total assets by SGD 4.35 million. This followed its first full financial year which ran from its date of incorporation on 20 November 2014 to 31 December 2015, a period in which Degussa Singapore made a net loss of SGD 2.05 million.

Although Degussa Singapore’s 2017 financial year results are yet to be published, it’s possible that continued financial losses at Degussa Singapore during 2017 were influential in the parent company’s decision to close its Singapore branch. Degussa Precious Metals Asia Pte Ltd (Degussa Singapore) is a wholly-owned subsidiary of Degussa Sonne/Mond Goldhandel AG, incorporated in the Canton of Zug in Switzerland, which in turn is owned by Clair AG, a holding company also incorporated in the Canton of Zug in Switzerland.

Orchard Road
Orchard Road, Singapore

Degussa Customers

Existing Degussa Singapore customers who may be concerned about where in Singapore to purchase their bullion products in future will be interested in learning that BullionStar’s precious metals store and showroom in central Singapore offers a full range of investment grade bullion bars and coins from the world’s most prestigious precious metals refineries and mints. BullionStar also buys all forms of investment grade bullion bars and bullion coins from the public, including Degussa branded precious metals bars.

Degussa Singapore customers who currently use Degussa’s safety deposit boxes or offsite storage facilities in Singapore to store their precious metals may also be interested in now considering BullionStar’s secure vaulting service as a future alternative for continued storage of their precious metals within the Singapore jurisdiction.

BullionStar's Financial Strength

In Singapore, BullionStar (BullionStar Pte Ltd) remains in a very strong financial position, and the company continues to grow strongly in terms of revenues, customer base and corporate presence. For the financial year ending 30 June 2017 (FY 2017), BullionStar recorded sales revenues totaling SGD 186.2 million, which was a 38.7% increase over corresponding revenues of SGD 134.2 million in FY 2016. BullionStar has also been profitable since inception.

BullionStar operates its precious metals shop, showroom and vault in central Singapore at 45 New Bridge Road, a convenient location adjacent to Singapore's Central Business District (CBD) and next to Clarke Quay MRT Station. BullionStar also operates a sophisticated online transactional platform and now has customers from 101 countries around the world.

Bullion Product Range and Depth

One of the peculiarities of the Degussa Singapore bullion bar range was that it only offered a limited selection of gold, silver and platinum bars, all of which were branded with the Degussa logo.

In contrast, BullionStar offers a full range / very wide selection of investment grade gold bars from the world’s most prestigious LBMA accredited refineries and mints including Swiss PAMP, Heraeus in Germany, the Perth Mint, and the Royal Canadian Mint, a full range of investment grade silver bars from leading refineries including Heraeus, PAMP, and the Royal Canadian Mint, and investment grade platinum bars from such well-known refineries as Heraeus in Germany and Valcambi in Switzerland.

In addition, customers can purchase BullionStar’s own branded 100 gram gold bars (produced by Argor-Heraeus in Switzerland), and 1 kilogram silver bars (fabricated by Heraeus in Germany). These BullionStar gold bars and silver bars have no spread between the buy and sell price.

BullionStar also stocks a very extensive precious metals coin range spanning investment grade gold coins, silver coins, and platinum coins from the world’s major mints including the Royal Canadian Mint, Royal Mint, Perth Mint, US Mint, and Austrian Mint among others.

Nearly all precious metals bars and coins in the BullionStar bullion product range are exempt from Singapore’s Goods & Services Tax (GST) since they qualify for GST exemption under the Inland Revenue Authority of Singapore (IRAS) exemptions on Investment Precious Metals (IPMs).

BullionStar also stocks a very wide range of precious metals coins and gifts in the form of numismatics, collectibles, and gold bullion jewellery.

BullionStar's Online Store

Degussa Singapore online store users will also be interested to know that BullionStar operates a sophisticated online transactional platform for buying and selling precious metals online.

This platform transparently quotes bullion product prices in Singapore Dollars, Euros, US Dollars, and Bitcoin. Opening an online account with BullionStar is a short and simple process. and payment can be made in SGD, EUR, USD and Bitcoin. Payment mechanisms are flexible, including bank transfer, cash, NETS (in Singapore Dollars), and cheque, and of course, Bitcoin. For each product on the BullionStar website, the product's price premium compared to the world gold price is displayed, as well as the product's spread between buy and sell price.

Precious metals purchased online on the BullionStar site can be delivered to a customer's home address, picked up at the BullionStar store, or else stored in BullionStar's secure vault storage facility, using the BullionStar "My Vault" storage option. As always, customers in Singapore can walk into the BullionStar shop and showroom and buy investment precious metals bars and coins, and also sell precious metals bars and coins and scrap gold to BullionStar.

New Bridge Road, Singapore
New Bridge Road, Singapore

BullionStar's Secure Storage Vault

Degussa Singapore had offered its customers safety deposit boxes facilities on site at its 22 Orchard Road location in Singapore, as well as other offsite storage facilities in Singapore.

A primary motivation for storing physical precious metals in Singapore is safety and security. There is a strong rule of law in Singapore and virtually no crime. There are strong property rights in the Singapore jurisdiction, and no reporting requirements on buying, selling, or storing precious metals. Additionally, there are no sales taxes or GST on transacting in investment grade precious metals in Singapore, nor are there any capital gains taxes. All of this means that investors currently storing their bullion in Singapore should continue to do so, and not need to face the prospect of having to have their bullion transferred for storage outside Singapore.

Customers of Degussa Singapore who currently avail of a safe deposit box at Degussa in which to store their precious metals may be interested in now availing of BullionStar's secure storage vaulting service which utilises a high security vault integrated into BullionStar's New Bridge Road facility in downtown Singapore.

All customer bullion bars and coins stored in BullionStar's secure vault are held in allocated storage, with customers at all times holding full unencumbered legal title to all their stored bullion. All BullionStar customer bullion products are handled under camera surveillance and this handling is meticulously documented. BullionStar is insured by insurance underwriter XL Insurance against all risks at full replacement value for all precious metals stored in the vault.

BullionStar employs no less than 5 levels of auditing to verify and confirm the existence of all bullion products under secure storage in its vault facilities. This includes a Live Audit Report which lists all customer owned bullion stored in the BullionStar vault, with which a customer can verify online his/her bullion in the vault by vault account number. BullionStar vault customers are also welcome to inspect their bullion via a personal customer audit on site at BullionStar's Singapore shop and showroom. BullionStar's vault auditing furthermore includes twice yearly physical auditing of all customer owned bullion by LBMA approved independent auditor Bureau Veritas.

Singapore's Retail Bullion Sector

Overall, BullionStar is a key player in the retail gold bullion sector in Singapore and has a growing presence. According to data from the World Gold Council (WGC), overall gold demand in Singapore in 2017 totalled 17.1 tonnes, slightly lower than overall gold demand of 18.1 tonnes in 2016. WGC figures also show that demand for gold bullion in Singapore in 2017 totalled 5 tonnes, down from 5.9 tonnes in 2016.

With BullionStar having sold approximately 2.3 tonnes of gold in 2016, this represents 46% of all gold bullion sold in Singapore, and 13.5% of all gold sold in Singapore over the same period.

During financial year 2017 (FY 2017), of BullionStar's total sales of SGD 186.2 million, 60.3% by value represented gold bar sales, the lion's share of which comprised 100 gram gold bars and 1 kg gold bars. By value, 12.6% represented gold coin sales, the majority of which were Gold Maples from the Royal Canadian Mint and Gold Kangaroos from the Perth Mint. Silver bar sales represented 21% of FY 2017 revenues, the majority of which were 1 kg silver bars, followed by 100 gram silver bars. Silver coins sales represented 4.6% of FY 2017 revenues, with Canadian Silver Maples being the top seller followed by Perth Mint Silver Kangaroo coins.

Conclusion

The retail bullion market in Singapore remains in robust shape despite the recent surprising closure announcement from Degussa. Clients of Degussa Singapore who have previously transacted in bullion products can rest assured that they can now access a full range of the world's foremost bullion bars and coins from BullionStar's shop and showroom in Singapore and through the BullionStar online transaction platform. Degussa storage customers who wish to retain precious metals storage facilities in Singapore can also have future piece of mind by considering the use of BullionStar's secure precious metals vaulting facilities in central Singapore.

The World’s largest Precious Metals Refineries

There are many precious metals refineries throughout the world, some local to their domestic markets, and some international, even global in scale. Many, but by no means all, of these refineries are on the Good Delivery Lists of gold and/or silver. These lists are maintained by the London Bullion Market Association (LBMA) and they identify accredited refineries of large (wholesale) gold and silver bars that continue to meet rigorous proficient standards of refining and assaying, and that are, at the same time, financial viable and stable companies. Currently, there are 71 refiners on the LBMA’s gold Good Delivery List and 81 refiners on its silver Good Delivery List, or which just over 50 of these refineries are accredited to both the LBMA’s gold and silver lists.

But within the top echelons of the world’s precious metals refineries, a number of names stand out due to their sheer scale and pedigree, as well as their global brand recognition in the production of a wide range of investment grade gold and silver bullion bars. These names include PAMP, Argor-Heraeus, Metalor Technologies, Heraeus, Valcambi, Tanaka Kikinzoku Kogyo, and Rand Refinery.

5000 Tonnes of Gold

Together these seven refinery groups have a combined gold refining capacity approaching a mammoth 5000 tonnes per year. And that’s not even taking into account their refining capacity for other precious metals such as silver and platinum. Valcambi has a gold refining capacity of 1600 tonnes per annum, Metalor 800 tonnes, Heraeus 400 to 500 tonnes, PAMP over 450 tonnes, Argor-Heraeus over 400 tonnes, Tanaka 500 tonnes, and Rand Refinery 600 tonnes.

Notably four of these refineries are based in the gold refining powerhouse of Switzerland, of which three, PAMP, Valcambi and Argor-Heraeus, are clustered literally within a few kilometres from each other in the golden triangle of Swiss refineries centred within the very south of the Swiss canton of Ticino near the Swiss-Italian border. Metalor Technologies is the exception, as its Swiss headquarters facility is based in Neuchâtel, in the north-west of Switzerland. Of the non-Swiss refineries, Heraeus, Tanaka and Rand Refinery, these are headquartered in Germany, Japan and South Africa, respectively.

crucible
Gold Refineries, Heraeus, PAMP, Valcambi, Metalor, Argor-Heraeus, Tanaka, Rand Refinery

International in Scale and Ownership

Although three of the four giant Swiss refineries have historically each been owned by a Swiss bank, and although groups such as Heraeus and Tanaka are still privately owned and controlled by founding shareholders, its important to note that none of these giant refineries are purely local concerns, so their headquarters locations are to some extent a secondary concern. From operating facilities, to metal supplier networks, to customer bases, all of these refineries are now absolutely global in nature.

For example, Metalor operates four precious metals refineries globally, in Switzerland, Hong Kong, Singapore and Massachusetts (US). Heraeus runs gold refining and gold bar production facilities in Hanau (Germany), Hong Kong, and Newark (US). In addition to its Swiss refinery, PAMP, part of the Geneva-based MKS PAMP group, runs a joint venture refinery in New Delhi, in conjunction with MMTC, a large state-owned Indian trading company.

In many cases, the ownership of these refineries is international and cross-border in nature, and increasingly so over the last few years. Agor-Heraeus is owned by the Austrian Mint and two German entities Commerzbank and Hereaus. In 2015, Valcambi was acquired by Indian jewellery producer Rajesh Exports, with one of the selling shareholders being US-based gold mining giant Newmont. Indeed, just last month, Tanaka announced the acquisition of Metalor Technologies, a development which has initiated an upcoming major Japanese - Swiss precious metals refinery combination. Metalor was already international in ownership, as its controlling shareholders are French and Belgian private equity companies. While Rand Refinery of South Africa is  exclusively owned by five of the largest South African gold mining companies, some of these owners, such as Anglogold Ashanti and Goldfields, are vast international concerns. Rand Refinery has also increasingly had to cast its new wider for sourcing gold to process in its refinery as South African gold mining output has declined. Rand Refinery now refines over 75% of the gold mined on the African continent (excluding South Africa), and is also increasingly tapping into gold mining output from the US and Asia.

The World's Refinery Referees

Another indicator of the esteem within which these select refineries are held is their membership of the exclusively small panels of good delivery list referees which have been appointed to run the LBMA’s good delivery lists, and similar good delivery lists maintained by the London Platinum and Palladium Market (LPPM) for platinum and palladium bars.

The LBMA’s good delivery referee panel is a five refinery member panel made up of Argor-Heraeus, Metalor Technologies, PAMP, Rand Refinery and Tanaka Kikinzoku Kogyo. The LPPM’s referee panel also comprises five refiner members, namely Metalor Technologies, PAMP, Valcambi, Tanaka Kikinzoku Kogyo and platinum specialist Johnson Matthey. So not only are these refineries listed on these LBMA and LPPM good delivery lists, they actually help run the entire set of good delivery standards and processes. With the upcoming acquisition of Metalor by Tanaka, these LBMA and LPPM referee lists may need some adjustment, since Tanaka and Metalor are members of both referee panels.

Overwhelmingly, the gold and silver bars of these refiners are all also accepted as good delivery for the COMEX gold 100 oz and gold kilo futures contracts, the gold contracts of the Tokyo Commodity Exchange (TOCOM), the Dubai Good Delivery gold list maintained by the Dubai Multi Commodities Centre (DMCC), and the good delivery standards of the Shanghai Gold Exchange.

Investment bullion bars

Although all of these precious metals refineries, to various extents, supply semi-fabricated precious metals, alloys and industrial precious metals suppliers to a diverse set of industrial and jewellery sector clients, it is perhaps the investment grade bullion products of these giant refiners that they are best known to a global audience.

PAMP fabricates a vast range of cast and minted gold and silver bars which are extremely popular across Asia and the Middle East, in fact, the premier brand in those regions. Valcambi manufactures a wide range of gold, silver and platinum / palladium investment bars, as well as precious metal coins and medals, and has become well-known as the international supplier of Combibars. Heraeus, Metalor and Argor-Heraeus produce a wide selection of gold and silver bars ranging from large wholesale (good delivery) bars through to smaller cast and minted gold and silver bars. Tanaka’s gold bars dominate the Japanese market and notably, Tanaka is also the sole distributor in Japan of gold and silver bullion Maple Leafs coins from the Royal Canadian Mint and gold and platinum Philharmonic coins from the Austrian Mint. Tanaka's acquisition of Metalor will be interesting in terms of how the combined group markets and distributes its investment bullion products going forward.

It's also not widely appreciated that Rand Refinery has refined over 50,000 tonnes of gold since it first opened in 1921, which is a staggering nearly one-third of all the gold ever mined. Rand Refinery large gold bars are held widely by central banks across the world. Rand Refinery’s flagship gold bullion Krugerrand coin is also held very widely, with over 60 million Krugerrands minted since 1967.

This article has not touched on the Perth Mint, Royal Canadian Mint or Royal Mint, which its important to remember, each operates its own precious metals refinery facilities in addition to being a sovereign national mint.

In summary, the seven refineries featured above are truly giants of the industry, and their longevity and customer trust attest to the authenticity and quality of their investment bullion products.

To learn more about the world's top precious metals refineries featured in this article, please see the full refinery profiles which have now been published on BullionStar's Gold University pages:

Heraeus: https://www.bullionstar.com/gold-university/heraeus-refinery

PAMP: https://www.bullionstar.com/gold-university/pamp-refinery

Valcambi: https://www.bullionstar.com/gold-university/valcambi-refinery

Metalor: https://www.bullionstar.com/gold-university/metalor-refinery

Argor-Heraeus: https://www.bullionstar.com/gold-university/argor-heraeus-refinery

Tanaka Kikinzoku Kogyo: https://www.bullionstar.com/gold-university/tanaka-refinery

Rand Refinery: https://www.bullionstar.com/gold-university/rand-refinery

In addition, the refining activities of the Royal Mint, Royal Canadian Mint and Perth Mint can be consulted in their respective profiles, also on BullionStar's Gold University pages:

Royal Mint: https://www.bullionstar.com/gold-university/the-royal-mint

Perth Mint: https://www.bullionstar.com/gold-university/perth-mint

Royal Canadian Mint: https://www.bullionstar.com/gold-university/royal-canadian-mint