Rajesh Exports to leverage Valcambi brand equity

Bengaluru-headquartered Rajesh Exports (REL), a gold mining to retail jewellery company, plans to leverage the brand equity of Valcambi, the Swiss refinery it acquired in July 2015.

Despite being the largest gold business company in India by revenue at Rs 1.65 lakh crore in 2015-16, the company’s profit after tax was disproportionately low at Rs 1,070 crore. Rajesh Mehta, chairman, said: “While our top line is good, the share of profit is much smaller; we have decided to increase that. Valcambi has been catering so far to global wholesale customers like bullion banks and central banks by supplying refined bars. We plan to launch Valcambi-branded smaller bars, of 1-100g, to retail customers.”

Valcambi has accreditation to the London Bullion Market Assocaition (LBMA). The $400 million acquisition was part of REL's backward integration. Valcambi's revenue is expected to grow by only around five per cent annually but the growth in profitability will be high due to value-added products, said Mehta.

REL, in a presentation to investors on Wednesday, said it expected the retail contribution to overall revenue to rise to four per cent in the next three years from one per cent currently. The retail business' contribution to operating earnings is expected to increase to 58 per cent from the current 17 per cent. This would be primarily due to the expansion of Valcambi products and expanding of Shubh Jewellers in India.

REL now has 81 retail stores in Karnataka under Shubh Jewellers and plans in three years to expand these to 2,000, mostly on franchise. It also plans to invest Rs 1,200 crore to take the brand outside Karnataka. During the first three years, it will expand in the five southern states, highest consumers of gold in India.

It is also setting up an e-commerce platform to sell Valcambi-branded 999-purity coins and bars from one to 100g. This will be in three phases. In the first, India, Singapore and other Asian countries will be targeted. Deliveries will be direct to consumers, as well as through branches of global banks, through vending machines. “We are in talks with a few leading banks to create delivery points for gold bars,” said Mehta.


In three years, gold and diamond jewellery will also be sold through this e-commerce platform. Mehta said the company was talking to banks to provide gold loans. Another plan is to set up duty-free shops in major airports to sell gold bars and jewellery, and diamond jewellery, as many countries have imposed high customs duties on gold. The company also has a bullion refinery in Uttrakhand and, “our efforts to get LBMA accreditation for gold bars refined here are on. We expect it during the year. Once this is done, we will consolidate refining operations in India with Valcambi, and the Indian refinery will also be branded as Valcambi”.

Growth Plan

  • Rajesh Exports to add more value-added products to increase profitability
  • It will expand its retail brand Shubh Jewellers outside Karnataka 
  • In the first 3 years, it will invest Rs 1,200 crore for retail chain expansion
  • Plans to enter the e-commerce space; to sell Valcambi brand gold bars of 1-100 gms
  • It will set up gold bar vending machines, duty-free shops areas at airports to sell Valcambi brand gold bars

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel