PNJ General Director: Jewelry industry is facing a 'double storm'

Mr. Le Tri Thong, General Director of PNJ - Photo: PNJ

PNJ faces difficulties due to gold supply

The "double storm" that Mr. Le Tri Thong mentioned at the annual general meeting of shareholders of Phu Nhuan Jewelry Joint Stock Company (PNJ) held on April 26, is reflected in both supply and demand.

On the input side, there is a shortage of raw gold supply due to record high prices and tightening market control activities. On the output side, there is a sharp decline in consumer purchasing power, especially for luxury goods, leading to many businesses continuing to reduce the scale of operations or even closing down.

"The rapid increase in gold prices will reduce the purchasing power of jewelry because the prices of products increase rapidly with the price of gold, while consumers' wallets cannot keep up. Consumers who previously had a budget of 5-7 million could buy a 1-tael piece of jewelry, but now they cannot afford to buy 1 tael, so purchasing power will decrease.

Not to mention, the rapid increase in gold prices makes consumers only want to buy and store, not sell. When there are few sellers, the supply will be greatly reduced. Not to mention, according to the new regulations, when buying and selling, customers must go through customer authentication steps, which also limits the number of transactions," said Mr. Thong.

Also acknowledging this, according to Ms. Cao Thi Ngoc Dung - Chairwoman of the Board of Directors of PNJ Company, the jewelry industry has faced difficulties in recent years due to the supply of raw gold. 2024 was difficult, entering 2025 will be even more difficult due to uncertainties in the global economy .

"The atmosphere of the recent God of Wealth season was not like previous years when the supply of raw materials was extremely difficult. PNJ has switched from selling gold bars to gold jewelry and fortunately, customers' needs have also changed," said Ms. Dung.

Gold bar sales down more than 60%

Ms. Cao Thi Ngoc Dung, Chairwoman of the Board of Directors of PNJ Company - Photo: PNJ

According to Ms. Dung, many people think that when gold goes up, the company makes a profit, when it goes down, the company makes a loss, but the gold business always has a rule that when it goes up or down, it does not affect profits, which is to balance output and input.

37 years in the gold business, the company does not focus on gold price profit in the gold jewelry business.

Responding to a shareholder's question about the supply of raw gold in the context that the State Bank has long not granted licenses for gold companies to import gold through official channels, the general director of PNJ said that the company buys old jewelry and then divides the gold.

"The journey to get raw materials is more difficult, inventory is increasing. Previously, raw materials could be put directly into production, but now it takes longer," he said.

Ms. Dung added that there were times when gold factory workers had to take a few days off because there was no source of raw materials or it was not profitable to buy raw materials at that time. Due to market fluctuations, gold bar sales decreased by more than 60%, jewelry sales increased but could not compensate for the decrease in gold bar sales.

However, the company has found a way to overcome the current difficult period such as exploring new segments, recently jewelry for men. Ms. Dung assessed that this is a potential segment that the market has long neglected.

In 2025, PNJ targets after-tax profit of nearly VND 1,960 billion, down 7% compared to last year's record.

According to Ms. Dung, the company's business strategy at this time is carefully formulated, adjusting the strategic direction to suit the volatile market situation. PNJ also prepares the conditions so that when the wind is favorable, the company can develop.

Previously, at a discussion at the end of March, Mr. Thong proposed that there should be a clear separation between jewelry gold and gold bars - although both are raw gold, their properties and purposes are different.

According to Mr. Thong, due to not being allowed to import raw gold for many years, despite its great potential, Vietnam's gold jewelry industry is facing many difficulties.

"Pressure from exchange rates forces the State to limit gold imports. But if gold jewelry is considered a normal consumer product, it is necessary to allow gold trading enterprises to import raw gold to produce gold jewelry.

The amount of foreign currency spent on importing raw gold to produce gold jewelry is only about 1-2 billion USD/year, compared to the amount of foreign currency spent on importing cosmetics, phones, branded bags, etc., it is not worth much," Mr. Thong analyzed.

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Source: https://tuoitre.vn/tong-giam-doc-pnj-nganh-trang-suc-dang-doi-mat-voi-con-bao-kep-20250426162900305.htm