Shree Ganesh to set up 2 gold refineries

Kolkata-based gold jewellery maker, Shree Ganesh Jewellery House, plans to set up two scrap gold refineries at its proposed jewellery making facilities in Mandalpada and Donjur near Kolkata. The combined investment in the two projects, each of which will have a small capacity of one-two tonnes, is estimated at Rs 90 crore.

Primarily, these refineries will process scrap gold jewellery collected from all the company’s 10 retail shops to produce pure gold. The capacities will be expanded later to process the additional scrap gold expected from a proposed 40 additional shops to be set up in two years. The company also plans to expand its retail presence across all Tier-I and -II cities and has earmarked Rs 50 crore for the exercise.

Additionally, the company, which is entering the capital market on Friday to raise Rs 360 crore, proposes to expand its manufacturing base in Manikanchan Special Economic Zone (SEZ) with an investment of Rs 56 crore.

When pointed out that other refineries are operating at 35-40 per cent of their capacities, Managing Director Umesh Parekh said the company would process scrap sourced from its own retail shops and serve them. The process would add at least three-five per cent to the company’s bottom line in two years, he said.

Shree Ganesh Jewellery exports to three major gold jewellery consuming markets – Hong Kong, Singapore and Dubai – that account for 90 per cent of the company’s turnover. Retail operations contribute five per cent of the Rs 2,150-crore annual turnover and, hence, has a lot of room for expansion. Retail shops will facilitate as scrap collection centres, buying the yellow metal at the prevailing market price. The company is currently focusing on the setting up of purity checking machines at each of its sales points so that sellers will get the correct value of their gold.