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Mr. Erman Dönmez, CEO of the Istanbul Gold Refinery

Interview - December 13, 2011
The CEO of the Istanbul Gold Refinery explains that gold is integral to Turkish culture
In general terms Turkish imports of Gold have been quite high – the official import has been 76.64 tons which is double the import from 2009 and 2010 respectively. Can you give an overview of Turkey’s enduring relationship with gold?

Let me start from the beginning. From even our smallest cities, if the householder requires money, he will look to the wife to provide it. If his wife doesn’t have the funds then he will go to the neighbor. This is the first time that people can deposit gold into the bank directly. Our products can help to protect investors from inflation and from various other aspects of the economy. We exported about 250 tons in 2008 and then again in 2009. People are now paying back their debts and people are reclaiming their gold. In terms of Jewelry production alone, Turkey is the world leader only second to Italy.

During the refining process, how do you ensure the highest quality?

We implement the latest techniques to ensure that our Gold is of the highest quality and thanks to this we are now registered with Dubai and London (LMBA). We have the duty to ensure that we are accredited from London good delivery and that we are now in a situation where we can deal with the international community. We are assisted with our experience within the sector that is over 40 years.

Can you expand on how Gold has always been integral to Turkish culture?

Gold in Turkey is a tradition. A few years ago many people had too much money invested in Gold. Turkey has been the fourth largest consumer of gold products. This year, most of the mining companies are working with us so they are now boring around 24 tons per annum. Turkey is highly competitive in terms of the global market. Our company, while new in the business, has gained a good reputation over the last decade at doing our job. If you don’t give your word then you have no integrity. The word of our fathers means something. There is a production and consumption within this region that dates back almost 2000 years. This cultural heritage makes us competitive. We can produce a range or products, which suit all investors. Many of these products are suitable for the macro investment market, for clients such as various central banks. These are products that we are currently promoting.

Where are your target markets?

Germany specifically and then Europe. These are the areas that we are looking into. At the moment we are still considering Europe as a market that we need to hedge against in terms of inflation so we consider Gold as a solid reaction to the markets. The substitution is Gold. We are increasing our Gold export to Europe year by year. This has been assisted by the transparency of the quality of our products.

We discussed you signing with Real Madrid, one of the most profitable football clubs in the world. What does this mean to you in terms of business recognition?

We started by seeing the promotion of Manchester United and Barcelona and felt that we needed to become involved with the European market. Now we’re considering China as a consumer market. China has a huge amount of supporters and now is a nation that has the capacity to invest in diversified products. We were producing for a number of football teams including Beşiktaş, Fenerbahçe, two of Turkey’s largest football teams. When people watch Real Madrid, an estimated 120 million people will watch the match, to put in perspective, this is more than the population of Spain.

We are proud to work with Real Madrid – they have an excellent reputation and we have forged a serious relationship. Both our companies produce products only of the highest quality and I believe this is why we work together.

Can you expand on the products that you offer to your private clients?

We produce Gold Bars and coins that vary in size – each of our products is certified from London good delivery and Dubai. We produce the highest standards of purity. When volatility goes up the price of Gold goes up. We are now looking to increase our export productivity to Europe. We also sell various other precious metals and chemicals, but mainly for the industrial sector.

The visionary of the Istanbul Gold Refinery was that of the late Ömer Halaç, who sadly passed away three years ago – his vision and passion still live on through his family and of course the refinery itself. His motto being “The secret of success is integrity, moral, patriotism and work, work, work.” What do you think his opinion would be of the company today?

He was a true visionary. At the moment we are following him. It is his vision. You had to have met with him. He opened everyone’s mind within the sector. Even our competitors say this. Now we export Gold as opposed to import. This was his vision and he is the reason behind why Turkey’s market has changed.

Looking east, the IAR has been awarded the Dubai Good delivery Status (LMBA) making it the first Turkish refinery to achieve international ranking and good delivery status from September 2011. Can you mention any other statuses that you’d be keen to obtain?

At this stage we just need to continue along the same path. We need to promote selling the physical asset that is higher placed in terms of a consumer product.

You are expanding your business in Germany. Can you highlight on the nature of this business and your final message to our readers?

In 2012 we will be marketing this company that is sourced from scrap. This is a business for us that is most important for the German Market, as they are intelligent consumers. The German people should continue to invest in Gold. I do not wish to give comments about the price of gold. According to me, the precious metals market can go up and down. If you want to save, keep 25% in precious metals – every time you need it, it is there.