TheStar Online: The Business of Storing Gold
February 19, 2012, johnni@thestar.com.my | A precious metals exchange has just been set up in Singapore by a Malaysian to help gold, silver and platinum bullion collectors not only to store their hoard but also to buy and sell such physical assets quickly and discreetly.
KEEPING gold bars and other precious items has reached a new level of sophistication in this region, with the launch of a storage facility in Singapore that offers clients anonymity as well as speedy transactions.
“The minimum deposit value in this bonded warehouse set-up is only US$1mil,” said Singapore Precious Metals Exchange Pte Ltd (SGPMX) founder and chief executive officer Victor Foo, 42.
“Of course, our clientele has much more than that to deposit,” added the Malaysian entrepreneur in an exclusive interview with The Star.
“SGPMX is located in The Singapore FreePort a super-secure facility and next to Changi International Airport. Within a free trade zone, the facility is dedicated to the storage and trade of precious metals, gems, artwork and other valuables.”
Safe location: SGPMX offers clients in Asia a bullion vault at an ‘offshore’ facility at a ‘much closer’ location than Switzerland.
Moving 100kg of gold from your house to KLIA is no laughing matter, said Foo.
“To clear a consignment at KLIA takes at least 45 minutes. But at Changi Airport, it takes only three minutes,” explained Foo, who has been involved in the insurance industry since 1991.
His financial planning services include gold bullion investments.
“If you are a high nett worth individual, you wouldn’t want to expose yourself and you don’t want your name to appear in the export papers.”
But the facility is a not a free-wheeling set-up as Foo is fully aware of the stringent regulations imposed by government authorities.
“We are not going to be laundering any blood money. Otherwise, the Singapore authorities will close us down,” he assured.
Temasek Holdings
Before launching SGPMX, Foo established SG Net Pte Ltd in Singapore in 2009. With a paid-up capital of S$1mil, SG Net offers customers a platform to buy and sell physical gold and silver products on a secured online portal.
SG Net works with Singapore companies such as Certis Cisco a subsidiary of Temasek Holdings for security and logistic services and UOB Bank for a secured payment gateway. Certis Cisco offers a bonded warehouse facility where every item is individually “allocated and dedicated”.
As chief executive officer of SG Net concurrently, Foo has also been involved in the design and manufacture of its gold wafers, which depict the Merlion image, with the approval of the Singapore Tourism Board.
Another of Foo’s brainchild is Auruma International Ltd which offers retail customers the opportunity to purchase physical gold and silver online. Launched in September 2011, the company facilitates “door-to-door” global delivery provided by Federal Express International and DHL.
With SGPMX, Foo has teamed up with his fellow Penangite Terry Ghani, 50, executive chairman of MyNet Capital Sdn Bhd, to offer “bespoke” bullion services to high nett worth individuals in the region and beyond.
For now, SGPMX basically offers clients in Asia a bullion vault at an “offshore” facility at a “much closer” location than the traditional Swiss bullion vault.
Besides storage services, well-heeled clients can also buy and/or liquidate their precious metal haul in a secure and confidential location.
Modelled after the Swiss Free Trade Zone, this facility is a sanctioned Free Trade Zone so stored items are exempted from GST.
This highly-secured facility was set up with the collaboration of local authorities, including the Singapore Economic Development Board, Singapore Customs, Singapore Police Force and the Civil Aviation Authority of Singapore.
Said Foo: “To provide a comprehensive service, we have teamed up with logistics provider Malca Amit Singapore Pte Ltd, which has over 20 years of experience in the courier industry involving valuables, specialising in diamonds, jewellery and precious metals.
“With this collaboration we are able to provide secured and efficient door-to-door collection and delivery from almost anywhere in the world.”
Malca Amit acts as custodian for SGPMX secured storage, where each item stored is allocated and dedicated.
“Our insurance coverage is underwritten by Lloyds of London with a sum insured up to US$1.2bil per claim,” pointed out Foo.
“We have an external auditor which audits the items stored as well as an audit-on-demand service for clients.”
The exchange provides “bespoke programmes” to meet the needs and requirements of clients. Each account is treated with the strictest confidentiality. All consignments entering the Freeport do not bear the name of the beneficiary.
Individual meet-and-greet service is available and any transaction can be carried out within the confines of the Singapore Changi Airport terminal.
Alternatively, arrangements can be made for clients who visit with their own jet to use a private service road which connects the Singapore FreePort facility to Changi Airport.
Added Foo: “Part of the exchange’s services is where we make trading easy’. Imagine selling a ton of gold which is stored at home or even a bank?
“Banks operate from Mondays to Fridays, 9am to 4pm, and have limited liability. The FreePort is operated 24/7 and is fully accessible at all times.
“Other than logistics and storage services, we are also able to arrange assaying services at the Singapore Assaying Office or ship to any nearby refinery.
“We are also able to match or provide prospective buyers.”
Clients can easily procure gold from any of SGPMX suppliers, namely the major mints from Australia, Switzerland and the United States.
“As our clients’ accounts are fully allocated and dedicated, SGPMX supports third party collateralising of their assets,” said Foo, “ We have, in fact, been attracting interest from a few banks that are keen to offer this value-added feature to our clientele.”
Like in any other business, there are also other companies that offer similar services. One company that also operates out of The Singapore FreePort bears a “Swiss” name.
“Basically, both (of us) operate out of The Singapore FreePort. What we focus on is the ability to service and identify the needs of our customers coming from Asia. I guess local knowledge is key,” said Foo.
“The Swiss would probably be focusing more on the European market.”
Link: http://thestar.com.my/news/story.asp?file=/2012/2/19/nation/10759027&sec=nation
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