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Kundan Follows Strict International Due Diligence Guidelines while Sourcing Dore

 

Brief profile of Kundan Care Products Ltd.

 

 

Brief :

Company – Kundan Refinery was established in the year 2006 with state of the art technology installed at Haridwar (Uttarakhand), an area in the foot-hills of Himalayas and in the basin of River Ganga, a pollution free zone. In the year, 2013, the company diversified into refining of Gold as well as manufacturing of Jewellery etc. The Company has certification of ISO 9001-2008 all the products are being manufactured meeting to the norms of ISO Certification.

 

Refining Unit :

It is one of the modern plants with State of Art machinery imported from overseas countries. Company has installed capacity of refining of 72 MT p.a. (6000 Kg. per month) and as permitted by Government of Uttrakhand, Directorate of Industries.

 

 

Accomplishment:

       Kundan Care Products Ltd. is also Four Star Export House – a Govt. of India Recognized Status and its products which is Gold Bars match with those of reputed international SWISS brand.

       Kundan Care Products Ltd. has been designated as Nominated Agency under Foreign Trade Policy of Govt. of India. By virtue of this nomination, Company is permitted to import Gold / Bullion directly in their name- a status enjoyed by a very few organizations in India.

       Company’s laboratory is accredited with NABL Certification which is equivalent to certification of quality issued by international testing agencies. In other way the product certified by the company are taken for its quality contents without any further certification requirement.

       We feel proud to say that we are one of the only seventeen refineries in India approved to ensure recycled domestic Gold by NCDEX.

       The Company also been granted a License by Bureau of Indian Standard to use the standard HALMARK in respect of their products. The certification enables company to sell its products with this mark as sign of Purity and Good Quality.

       Kundan Care Products Ltd. has also been accredited with AEO T2 status by Central Board of Excise and Customs, Ministry of Finance, which enable us to export/import goods at faster speed without scrutiny of Custom authorities and also allow us to pay Custom duty on consolidated basis once in a month. This facility is enjoyed by only 20 entries in India at present.

 

Interview

 

The industry is developing the India Good Delivery Standard. Accepting OECD due diligence guideline is other subject that the industry is talking about. You are one of the largest private refiners in the country. In your opinion, how will these two measures shape the Indian gold refining industry?

       It is heartening to note that Bureau of Indian Standard (BIS) is coming out with good delivery bullion standard for gold bars produced domestically from dore and scrap gold.  Though, at present Bars manufactured at our refinery are well accepted in domestic market as well as acceptable AT NCDEX, yet these Bars are not accepted at MCX Exchange.  Quite often, we loose business opportunity because of non-availability of any acceptable standard on Indian Bars. Indian Gold Refinery Industries will get international recognition and a boost in their production.  In the long run, subject to government policies, India can also become gold hub like UAE & Hongkong. Comparatively, lower labour cost in India vis-à-vis in other countries shall be an added advantage. MCX may also be advised to accept India goods delivery bar, in additional to LBMA standard bars.  

Accepting OECD Due Diligence guidelines:—

India is one of the countries following International Humanitarian Laws and also affected by terrorist activities, money laundering.  Our Company undertakes due diligence for all over supplier and especially, suppliers located in conflict – affected and high-risk areas. The company sent its representative to such areas followed by visit by Company’s top management. Besides that, our banks also call for confidential report of our supplier from independent international agencies such as Dun and Breadstreet etc. Acceptance of OECD Due Diligence guidelines shall also be impetus for the industries as the product shall be accepted world-wide including western countries who insist for strict adherence.

Sourcing Gold dore has always been a challenge for refiners in India. According to you, what policy changes can be initiated to ensure smooth dore supply into India?

        Reducing import duty on Dore – it is well accepted that demand for dore far exceed its supply in international market. One of the reasons for short supply is less availability of dore in the open market for export and refining. Further, growing competition in sourcing this limited amount of dore is a big challenge as global refining capacity has increased tremendously. Sourcing Dore Bar involves lot of cost and as such we suggest that import duty on dore should be reduced, which has been recently hiked twice. Two years back, there was gap of 2% between duties of refined gold & dore which has been reduced to  0.65% at present.  This gap should be increased considering high interest cost in India and other related expenses for refining dore.  Further, there are numbers  of conditions like :

               Goods should come directly from country of produce.

               Minimum 5 Kgs. Per lot

               Maximum 95% purity

               Goods should be imported in accordance with packing list issued by miner

Our suggestions   :   Above conditions should be removed.  The scrap should also be treated similar to dore for duty and other purposes.  This suggestion is keeping in view that India is the largest consumer of Gold whereas it imports only less than 20% of dore. Further increased refining activity shall be a boost to MSME as most of the refineries are categorized as MSME.

       Allowing smaller lot for import at concessional duty :—

As of now there is levy of higher duty if smaller size in Kg. of dore is imported. With availability decreasing continuously it is suggested that duty for smaller lot should also be reduced and made at par with that of import of bigger lot.

BIS is likely to permit self-certification of bullion products by approved refiners when mandatory hallmarking will be introduced. How would this help the industry?

       Our company already enjoys faith and trust of customers who readily accept certification. BIS permitting self-certification approval shall be an added advantage to us. General public shall have confidence in our vouch and it shall increase our product sale.

India's scrap market is highly unorganized and fragmented. What needs to be done so that scrap collection can be organized?

Most of the scrap in India is generally exchanged with new jewellery, which is undertaken at present by small and local jewelers. Although, consumers do not get appropriate rate from them, yet they go for it.

If scrap collection is undertaken by refineries themselves at various locations and in a transparent method the customers may approach those centers. Transparency implies that testing is done under the supervision and in front of customer concerned. Further, the method employed should be trust-worthy, having recognition from Govt. Authority such as BIS. Moreover, the payment in lieu of scrap should be given expeditiously and preferably immediately by digital mode.

 

Disclaimer: Views are personal and not the views of the publisher.