The Pivotal Role of Association in the Precious Metal Industry

By ERMIN SIOW, Advisor, Federation of Goldsmiths and Jewellers Association Malaysia (FGJAM)

The precious metals industry (PMI) has evolved significantly over the past few decades, and throughout this evolution, trade associations have played a crucial, often pivotal, role in shaping its trajectory. Drawing from my more than thirty years of experience in the industry, I can confidently say that these associations have been indispensable in fostering growth, promoting collaboration, and enhancing the collective interests of all stakeholders within the industry.

My involvement with trade associations in the PMI began in the late 1980s when I first entered the industry. Initially, I joined as an ordinary member, but over time, I assumed increasingly prominent roles, eventually becoming the president of the Federation of Goldsmiths and Jewellers Associations Malaysia (FGJAM). This journey has afforded me a unique perspective on the transformative impact that trade associations can have, not just on the broader market but also on the businesses of individual members.

While my perspective is primarily rooted in the Malaysian market, I believe that many of the lessons and experiences I’ve encountered can be applied to other markets around the world. The positive influence of trade associations on the precious metals industry can be categorized into several key areas:

Facilitating International Expansion for Local Businesses
One of the most significant contributions of trade associations is their ability to help local players expand internationally. In the early 1990s, for example, the World Gold Council (WGC) played a key role in helping Malaysian manufacturers explore overseas markets. Through organized trade missions, including visits to prominent trade shows such as the summer show in Vicenza, Italy, FGJAM worked with the WGC to connect local manufacturers with international buyers.

These trade missions provided a valuable platform for members to establish new relationships, tap into global markets, and gain exposure to emerging trends. Additionally, these events offered members opportunities to source the latest machinery, as well as to stay abreast of the latest design trends and innovations in the global fashion landscape.

Acting as a Conduit for Regulatory Engagement
Another critical role that trade associations play is serving as a bridge between industry players and regulatory bodies. Associations like FGJAM are often at the forefront of lobbying for favorable changes to trade policies and regulations that directly impact the industry. For instance, the association was instrumental in convincing the government to remove import duties on gold bullion and loose gems—a decision that significantly benefited local businesses.

More recently, FGJAM played a key role in advocating for the government to suspend the Luxury Goods Tax, which would have placed additional financial strain on the industry. These successes underscore the power of a well-organised and proactive trade association in shaping public policy in ways that support the interests of its members.

Expanding Networks and Market Exposure
Trade associations also provide an invaluable platform for members to expand their professional networks and gain exposure to new markets. Through regular exchanges and visits, both within the country and abroad, members can engage with industry peers, learn from international best practices, and explore potential partnerships. These interactions foster a spirit of collaboration and mutual support, which can significantly enhance the competitiveness of individual businesses.

For example, FGJAM regularly organises trade delegations and visits to foreign markets, allowing members to better understand the dynamics of global markets and forge new business relationships.

Supporting Trade Shows Participation
One of the most effective ways that trade associations support their members is by facilitating access to international trade shows. These events are often vital for businesses looking to showcase their products, identify market trends, and meet potential buyers. Many trade show organisers offer hospitality programs to help smaller companies participate in these events. These programs typically include subsidised hotel stays, discounted flights, and other incentives that make it easier for smaller businesses to attend.

FGJAM, for instance, has organised several such trips to major trade shows in locations such as Hong Kong, Japan, Turkey, India, the United States, and South Korea. These visits not only help local businesses gain visibility on the global stage but also provide an opportunity to learn about innovations in design, technology, and customer preferences.

Leadership and Sustainability in Trade Associations

Beyond the tangible benefits of international exposure and regulatory advocacy, trade associations also play a crucial role in knowledge sharing and capacity building within the industry. By organising seminars, workshops, and training sessions, associations can equip their members with the latest industry insights, technical skills, and business management tools. These educational initiatives are vital in helping businesses stay competitive in an ever-changing market, ensuring that members are well-equipped to navigate challenges such as shifting consumer preferences, technological advancements, and regulatory changes.

The success of a trade association ultimately depends on the leadership and commitment of its members, particularly its key leaders.

The success of a trade association ultimately depends on the leadership and commitment of its members, particularly its key leaders. Leading an association is not a glamorous job; it requires dedication, time, and often financial sacrifice. In many cases, the costs associated with running an association are borne by the leaders themselves. However, the rewards-both personal and professional-can be immense. A good leader understands that their role is to guide and support, rather than dominate, the association’s activities. It is also essential for leaders to recognize when the time has come to step aside and make room for new leadership. This renewal is vital for the association’s continued growth and sustainability. No one is indispensable, and by encouraging new ideas and fresh perspectives, an association can evolve and thrive in the face of changing industry dynamics.

Trade associations like FGJAM have been instrumental in the development of the Malaysian precious metals industry, and their impact extends far beyond national borders. They provide vital support to businesses, facilitate international expansion, advocate for favourable regulatory frameworks, and foster a sense of community and collaboration among industry players. As the PMI continues to evolve, it is clear that the role of these associations will remain just as pivotal in ensuring the continued growth and success of the industry.

ERMIN SIOW joined the PMI industry more than 30 years ago as managing partner at Poh Kong Jewellery. He is currently the advisor of FGJAM, having served as president from 2014-2018. He is also the vice president of AGJA, ASEAN Gems and Jewellery Association.