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Malaysia’s Gold & Gems Industry

By Ermin Siow, Advisor, Federation of Goldsmiths and Jewellers Association of Malaysia

Malaysia is a relatively small country, with an area of about 300,000 square kilometres and a population of 33 million. In terms of Gross Domestic Product (GDP), the country ranks fifth in the Association of Southeast Asian Nations (ASEAN), with almost US$1 trillion in 2021. Malaysia also ranks third in per capita income within ASEAN, at about US$11,000. It is a multi-racial country, with Malays being the dominant race (65%), followed by Chinese (22%) and Indians (6%).

Gold Demand

The country’s domestic gold demand ranks fourth among ASEAN countries, behind Indonesia, Vietnam and Thailand. According to Metals Focus, the domestic gold demand from 2017 to 2021 was as follows: 2017: 19.10 tonnes, 2018: 18.90 tonnes, 2019: 18.00 tonnes, 2020: 10.10 tonnes, 2021: 14.9 tonnes (fig.1).

As for retail investment, which is the purchase of gold wafers and gold bars for investment purposes, annual demand from 2017 to 2021 was as follows – 2017: 5.8 tonnes, 2018: 6.0 tonnes, 2019: 5.4 tonnes, 2020: 3.9 tonnes, 2021: 4.4 tonnes (fig. 1).

Fig. 1: Malaysia’s Gold Demand, 2017–2021 (Tonnes)

Source: Metals Focus

The figures quoted above reflect the consumption of “new gold”, not including scrap gold or old gold jewellery. It is common practice in Malaysia for consumers to trade in old gold jewellery for new pieces of gold jewellery. Assuming that 35–40% of the gold retail trade involves trade-ins, domestic gold demand would amount to approximately 25 metric tonnes annually.

Similar to Singapore, India and other Middle East countries, gold jewellery in Malaysia is primarily 22K or 916 gold fineness, with more than 90% of gold jewellery sold being 22K. Locals produce most, if not all, of the country’s 22K gold jewellery. There are more than 100 gold jewellery manufacturers, big and small, located mainly in the northern state of Penang. The country also has 24K yellow gold and 18K white gold on the market, with some imported from mainland China, Italy and Turkey.

Based on estimates, there are 3,500 to 4,000 gold jewellery outlets in Malaysia. Most retailers are single-shop operators, while a few chain-store operators have 40 to 100 stores each. Like other cities across Asia, it is common to find jewellery retail outlets located inside shopping malls. Plain gold jewellery probably takes up about 85%, if not more, of the total gold and gems jewellery market, similar to other Asian countries.

Tranz Jewellery
Happy Love Jewellery

Gems And Gem-Set Jewellery

Like many other countries, the popular gems and gem-set jewellery are diamond, blue sapphire, ruby, and emerald. Jade and pearls are also popular, especially among the more affluent crowd. Based on estimates, the domestic market size for this segment is amounted to approximately US$500 million annually, with most high-end pieces imported from Hong Kong.

On the other hand, semi-precious stones like amethyst, topaz, and aquamarines are not as popular in the country, perhaps due to the lack of publicity or promotional activities. The recent introduction of lab-grown diamonds (LGD), being quite a hit in mainland China and the United States, has not gained popularity here. Most consumers, who are traditional, do not view LGD as a gem, and consider them to have no resale value. There was an initial fear that LGD may impact the diamond trade adversely, but it has not made any headway thus far.

Anggun Jewellery

Gold Jewellery Exports

Not many people, even those in the trade, are aware that Malaysia is a considerable gold jewellery exporter. Interestingly, Malaysia exports more gold jewellery (916) than it consumes locally.

The country has posted strong numbers in annual gold jewellery exports, save for a dip in 2020, owing to the COVID-19 pandemic (fig. 2).

Fig. 2: Value of Gold Jewellery Exports

Source: Department of Statistics Malaysia

Fig. 3: Quantity of Gold Jewellery Exports

Source: Department of Statistics Malaysia

The annual gold jewellery in tonnes is as follows: 2016: 35 tonnes, 2017: 31 tonnes, 2018: 34 tonnes, 2019: 30 tonnes, 2020: 14 tonnes and 2021: 33 tonnes (fig. 3).

The main export markets are the Middle East – mainly the United Arab Emirates (UAE), Singapore and Hong Kong.During the early ‘90s and the year 2000, Malaysia exported more than 50 metric tonnes of gold jewellery annually and was among the top five exporters globally. The decline in tonnage in recent years was caused by 1) more competition from other exporters, and 2) new production bases set up in the Middle East. The introduction of VAT in the UAE in 2019 also negatively impacted the country’s gold jewellery exports.

Trade During The Pandemic

Malaysia had its first lockdown from 18 March till 4 May 2020 – a total of 47 days. During this period, only essential services and businesses were allowed to operate. All gold retail outlets were closed, and factories had to stop their operations. There was another lockdown from 1 June to 16 August 2021, a total of 77 days. Similar to the first lockdown, gold and jewellery businesses were not allowed to operate.

Given the tremendous adverse effects of these lockdowns, the Malaysian government, fortunately, provided some financial support. During these two years, the country provided aid packages that amounted to RM530 billion (US$119.03 billion), including cash handouts and wage subsidies up to RM83 billion. The other indirect financial aid packages came in the form of loan moratoriums, loan guarantees, provident fund withdrawals, grants and soft loans for small and medium enterprises, and tax incentives, among the other measures introduced to support the recovery of the economy.

Moving Forward

The Federation of Goldsmiths and Jewellers Association of Malaysia (FGJAM) is the central and coordinating body of the gold and gems trade. It has 18 state-level associations with about 1,500 individual trade members, including retailers, wholesalers, manufacturers and bullion dealers.

The gold and gems industry will depend, among others, on the recovery of Malaysia and the global economies from the Covid-19 pandemic. As mentioned above, the economic stimulus packages provided by the government aided the recovery of Malaysia’s economy. Barring unforeseen circumstances, the country’s gold and gems industry will rebound in line with the economy, forecasted to grow around 4–5%.

ERMIN SIOW joined Poh Kong Jewellers as managing partner in 1989 and was appointed executive director when Poh Kong Holdings Bhd was listed on Bursa Malaysia in 2004. He was also the president of FGJAM from 2014 to 2018 and currently its advisor. He is also the council member of the ASEAN Gems and Jewellery Association (AGJA).

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Lee Jia Yi

OPERATIONS & ADMIN EXECUTIVE
Before joining SBMA, Jia Yi worked as an Admin & Reporting Officer in her previous role. She holds a Diploma in Business & Social Enterprise from Ngee Ann Polytechnic. Jia Yi is responsible for managing and maintaining physical and digital files in SBMA, supporting invoicing processes, reconciling receivables and payables, coordinating meetings and conferences. Additionally, she will provide support to the team and assist the Business Director in managing the Association’s office operations and general administrative activities.

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Emily Oh

OPERATIONS & ADMIN EXECUTIVE
Emily Oh is the Operations & Admin Executive, a seasoned professional who values teamwork and effective communication. She is skilled at adapting to new challenges and takes a proactive and resourceful approach to every task. Before joining SBMA, Emily had experience coordinating international travel arrangements and spearheading community initiatives. Her role at SBMA will be providing operational and administrative support for projects and other matters to the team.

SECRETARIAT SBMA Clara-Chang

Clara Chang

MARKETING & COMMUNICATIONS EXECUTIVE
Clara Chang joins SBMA as the Marketing & Communications Executive, enriching the team with her extensive experience in content creation, social media management, and digital marketing. Prior to joining SBMA, Clara held the position of Marketing Executive at her previous job. She holds two bachelor’s degrees from the University at Buffalo, one in International Trade and another in Geographical Information Science. Her core duties will include maintaining the SBMA website, managing the quarterly Crucible newsletter, among other responsibilities.

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Mr John Levin

Global Metals
TD Securities
John Levin is the Head of Metal Sales & Trading – APAC at the Toronto Dominion Bank’s Singapore office. Prior to this role, he devoted seven years to leading precious metal sales for the ANZ banking group in his home country, Australia. Notably, from 2009 to 2011, John played a significant role on the management committee of the London Bullion Market Association while serving as the Head of Precious Metals Sales for HSBC Global Banking and Markets in the UK.

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Fabian Lew

MARKETING & COMMUNICATIONS OFFICER

Fabian was a Business Development and Marketing Associate before joining SBMA. He graduated from Singapore Management University with a Bachelor’s degree in Economics.

He has joined SBMA since February, 2022.

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Margaret Wong

BUSINESS DIRECTOR

Margaret Wong, Business Director at SBMA (Singapore Bullion Market Association), brought valuable experience from her previous role at the World Gold Council (WGC). Her tenure at WGC provided her with extensive exposure to the gold community in Singapore and the broader region. This background has been instrumental in establishing strong working relationships within the industry.

Margaret’s role at SBMA encompasses a diverse range of responsibilities. She oversees office management, business support processes, finance, and administrative functions essential for the smooth operation of the team and management committee. Additionally, Margaret handles membership matters, member communications, and addresses public inquiries related to SBMA.

One of Margaret’s key responsibilities is coordinating with the Event Management Company for SBMA’s prestigious annual event, the Asia Pacific Precious Metals Conference. This flagship conference plays a crucial role in the industry, making her involvement pivotal in its success.

Described as resourceful and self-motivated, Margaret Wong brings a wealth of skills and experience to her role at SBMA, ensuring efficient operations and effective engagement within the precious metals community in Singapore and beyond.

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Albert Cheng

Chief Executive Officer

Albert Cheng joined the World Gold Council in March 1993 as a Regional Manager, becoming Managing Director, Far East in 2003. He retired at the end of March 2015 and was subsequently named its Advisor. He has also been an International Advisor to the Shanghai Gold Exchange since 2002.

His marketing career began with Dentsu Young & Rubicam, Hong Kong in the early 80’s. He began gold marketing in July 1985 when he joined the Royal Canadian Mint as a Regional Manager for Southeast Asia.

He was appointed honorary CEO of SBMA in November 2015. He is responsible for the success and strategic development of SBMA, represents the interests of the Association, and is responsible for all the legal and regulatory aspects of the work of the Association. He is the primary contact for regulators and government bodies on bullion market development.

Ms Pawan Nawawattanasub

Ms Pawan Nawawattanasub

CEO
YLG Bullion Singapore Pte Ltd

Pawan is the CEO of YLG Bullion Singapore and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, the Thailand Futures Exchange’s Arbitration Committee, and the Rotary Bangkok committee. She holds a master’s degree in Political Science.

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Mr Shaokai Fan

Head of Asia-Pacific (ex China) and Global Head of Central Banks
World Gold Council
Shaokai Fan is the Global Head of Central Banks at the World Gold Council, responsible for advising governments on gold matters, and enhancing the gold market through engagement, dialogue, and thought leadership. He works directly with central banks and sovereign wealth funds on investment considerations. Prior to this position, Shaokai held multiple roles at Standard Chartered Bank, including Director for Asia Strategic Initiatives and Associate-Director for Public Sector coverage. Shaokai holds a Masters of Public Administration from Columbia University and the London School of Economics, and an undergraduate degree in finance and economics from New York University.

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Mr Alan Liew

Head of Bullion & Commodities Trading
United Overseas Bank Limited
Alan is Head of Bullion and Commodities Trading for Group Trading in Global Markets, United Overseas Bank (UOB). Alan joined UOB and started the bank’s commodities trading business in 2014, previously he spent eight years in Standard Chartered Bank (SCB) trading both precious and base metals. During his tenure at SCB, he obtained the SGE gold trader licence and was part of the pioneering team for the SGE business and the FX quantitative trading team. Prior to trading, he worked for Monetary Authority of Singapore in the Financial Risk Management Division. He holds a BSc (Hon) in Computer Science at National University of Singapore and a MSc in Financial Engineering at Nanyang Technological University.

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Mr Nikos Kavalis

Managing Director
Metals Focus Singapore Pte Ltd
Nikos Kavalis is a founding partner of Metals Focus. He has over 20 years of experience in precious metals, having previously worked for the Royal Bank of Scotland and GFMS. Since September 2019, Nikos has been based in Singapore, where he also runs the local subsidiary of Metals Focus.

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Mr Nuttapong Hirunyasiri

CEO
MTS Gold Global Trading Pte Ltd
Nuttapong Hirunyasiri is the CEO of MTS Gold Group, one of Thailand’s top 10 companies and top 3 bullion companies. He started MTS Gold Group’s first overseas office in Singapore and has been expanding the group business internationally. He focuses on product development and innovation for gold investment, with the aim of being a leader in providing the full suite of gold investment services in the ASEAN region.

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Mr Raman Walia

Executive Director, Head of Commodities Sales – APAC
JP Morgan Chase Bank N.A.

Raman is Executive Director and Head of Commodities Sales, APAC, for J.P. Morgan. He joined JPMorgan in 2008 in New York, moved to Singapore in 2011, and helped expand the precious metals business in the region. Raman has an MBA from Cornell University, and likes to travel in his spare time.

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Mr Andrew Clarke

Head of Brink’s Global Services
Brink’s Global Services Pte Ltd

Andrew Clarke is the Head of BGS (Brink’s Global Services) for Singapore, Indonesia, Malaysia and Brunei. He has held various leadership positions throughout his career in secure logistics and risk management with Brink’s, which started in Hong Kong in 2010. Andrew relocated to Singapore in 2018 to expand the precious metals line of business along with Brink’s portfolio of services and industries.

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Mr Kazuya Naoki

Head of Metals, Asia
ICBC Standard Bank Plc, Singapore Branch

Kazuya (Kaz) Naoki is the Head of Metals, Asia of ICBC Standard Bank in Singapore and is responsible for the precious & base metals sales and trading in the region. He joined Standard Bank Plc Tokyo Branch in 2008 and was relocated to its Singapore Branch in 2013 whose controlling stake was acquired by the Industrial and Commercial Bank of China in 2015. Prior to joining Standard Bank, Kaz spent 11 years focusing on commodity trading and risk management with Mitsui & Co in Tokyo, Sydney and London. Kaz has been serving on the SBMA Management Committee since 2016.

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Mr Vinh Nguyen

Head of Precious Metals, Asia
StoneX APAC Pte Ltd

Vinh Nguyen joined StoneX Group in Singapore at the beginning of 2008 and responsible for its APAC precious metals activities since 2019 until now.

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Mr KL Yap

General Manager, Singapore Refining Business Unit
Metalor Technologies (Singapore) Pte Ltd
KL YAP is the General Manager of Metalor Technologies (Singapore) Pte Ltd’s Singapore Refining Business Unit. He joined Metalor in 2013, initially in Refining Sales. In 2014, he became Refining Business Unit Manager, leading the development of a new precious metal refinery. KL was Vice Chairman of SBMA from 2017 to 2021, now serving as Chairman. With a degree in business commerce, finance, and marketing, he brings prior experience from refinery and heavy industries.