KOCHI, INDIA (Commodity Online): India, the cultural hearland for gold, is now creating billionaires in jewellery trade who now acquire private jets to fly and expand their business.
Two jewellery retailers based in the South Indian state of Kerala- Joy Alukkas and Kalyan Jewellers have bought the Phenom 100 business jet manufactured by Barzil manufacturer Embraer for Rs 30 cr each.
"Our vision is to start showrooms and serve customers in all parts of India and owning our own jet will help fuel our expansion drive," according to T S Kalayana Raman, Chairman and Managing Director of the Rs 8500 cr Kalyan Jewellery, the expanding jewellery chain with outlets spread across Kerala, Tamilnadu, Karnataka, Andhra Pradesh and Pondicherry.
According to Kalyanaraman, a private jet is not a luxury but a necessity and feels he can oversee the operations of his jewellery outlets better, never mind the annual maintenance cost of Rs 2.5 cr that includes the pilot's salaries and expenses at Cochin Airport apart from the high acquisition cost of the aircraft.
The Rs 6000 cr Joy Alukkas group with operations spread out in India and the Gulf region had acquired the Embraer Phenom 100 back in July 2011 and it came to Cochin International Airport to a grand welcoming ceremony and a grandiose water salute. Joy Alukka, Managing Director proudly announced that the Phenom Jet is for his private use.
Joy Alukkas Group with diversified buiness interests in textiles, accessories, money exchange and luxury aviation has its business spread out in India, UK, UAE, Kuwait, Bahrain, Oman, Qatar, Saudi Arabia and Singapore.
The other business interests of the group include textiles and accessories, money exchange and luxury aviation.
The turnover from Indian operations is estimated around Rs. 2,800 crore, with the balance accounted for by business outlets in the UK, UAE, Kuwait, Bahrain, Oman, Qatar, Saudi Arabia and Singapore.
A market analyst said the traditional Indian fascination for gold jewllery, coins and bullion is creating a huge potential for jewellery business to expand their operations and become billionaires. According to World Gold Council in its latest report, China and India remain the cultural heartlands of gold, generating 55% of global jewellery demand and 49% of global demand.
"India remains the largest country for gold demand with 933.4 toms, which is notable considering the volatility of the gold price and the weakness of the Indian rupee against the US dollar during the second half of the year. Gold jewellery accounted for over 500 tons and the investment market demand reached 366.0t. Indian demand accounted for 25% of total bar and coin demand worldwide."
India has a fast growing clientele when it comes to owning business jets. According to Frost & Sullivan a global business research firm,India has the maximum number of private jets in Asia - 142. The country's main economic rival China has just 93. Japanese business men own 76 jets.
Mukesh Ambani owns three planes - an ACJ 319 and two Bombardier Global 5000 jets while younger brother Anil Ambani has two - a Dassault Falcon 2000 and a Bombardier Global 5000. Vijay Mallya owns two jets - an ACJ 319 and an Airbus 133. Gautam Singhania, Chairman and Managing Director of Raymond owns a nineseater Challenger 604 jet.
