The $1.7 bn star Indian jeweller & what got him there 'I believe in using technology, which is of some actual use to me.'
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Fifty-year-old gold czar Rajesh Mehta is among 100 richest Indians. His humility can been seen from the fact he drives Toyota Innova, uses low-end phones, travels in auto rickshaws at times and doesn't mind eating Rs 50 roadside plate of dosa. Entrepreneur caught up with Mehta, Executive Chairman, Rajesh Exports, to know his lighter side and business as well.
There have been lots of recent happenings, which is the most significant for Rajesh Exports?
The acquisition of Valcambi (Switzerland-based world's largest precious metal refinery) for $400 million in July this year is one of the most significant deals for us because through that we have been able to put India on the global gold map. Most of the gold refineries globally are owned by old European companies while there was no Asian company. This acquisition has not just led us to enter the elite club of gold refiners, but also made us the
biggest gold refiners globally.
You have already made a remarkable achievement. What next?
There is a lot to be done on two fronts – business and personal. As an entrepreneur, I have to ensure of having a major share in the global gold market at the retail level and consolidate our global position across the value chain of gold by at least having 30-40 per cent share in each segment globally. While we are the only company in the world present in all these segments, for example in global refining we constitute around 30 per cent but in retailing we are less than 0.1 per cent.
Personally, I plan to build a kind of a public debate forum to hold people in power or politics accountable through discussions and debates and suggest changes to solve basic problems of the people of India. Those responsible for public welfare will have to bother about these opinions as today social media is very powerful.
Why did you partner with small jewellery retailers?
We are enabling small retailers by partnering with them under our brand of retail jewellery chain called Shubh. It helps these retailers to remain in business and run it with an organised setup that we offer, otherwise they used to feel threatened of getting out of business because of big brands. For us, it becomes a channel to foray into retail segment. So it is beneficial for both of us.
Competition is tough. How prepared are you for that?
Except us, I don't think any of our competitors like Tanishq, Malabar and Joyalukkas are present across the gold value chain. Moreover, there are three areas in gold for businesses to compete. First is quality and purity. While there are brands that sell pure gold but our products are of pure hallmarked gold. Second, the design and workmanship of our craftsmen and customers' comfort of wearing our products is ahead of our competitors. Third is the competitive pricing as our products are priced significantly lower than other brands across the globe. We don't charge extra in terms of wastage or making charges.
What is the global standing of Rajesh Exports?
At present, we are among largest players in gold business globally. We are present in around 70 countries in terms of selling, refining, mining, etc. The global gold consumption is 4,000 tonne; out of which, we refine around 1,200 tonne, which is 30 percent of the annual global gold refining.
This 30 percent is more than the total gold that India consumes. This gives us our mammoth annual revenue of $45-50 billion, which makes us bigger than many companies including Infosys. However, since in refining we sell gold to different sets of customers such as banks, our profitability is low. We expect to close this year at around Rs 1,000 crore in profit.
You are a software engineer but you seem detached from technology.
No, in fact I code programmes for the business. I believe in using technology, which is of some actual use to me. My phones serve my purpose of talking to people. I don't need an iPhone or to surf apps which are of no use. I check my e-mails thrice a day on my laptop, which is enough.
How do you see your firm in next decade?
We have set a target of 12 years where while our revenue will grow moderately to around $55 billion but our profitability will soar to at least Rs 40,000 crore by 2025 as our main focus henceforth will be on gaining profits. The major chunk of that will come from retailing.
(This article first appeared in the Indian edition of Entrepreneur magazine (November, 2015 Issue).