The ‘Vienna Philharmonic’ is a globally renowned gold bullion coin, and it has top market share in Japan as well. It is minted by Austrian Mint, and we interviewed the organization’s CEO Mr. Gerhard Starsich and asked about such matters as the various conditions related to gold and the organization’s sales strategy going forward.
―This is the first time in 5 years for you to visit Japan. What is the main objective of your visit?
“I was originally scheduling to visit Japan in 2020 since we were the sponsor of Austria House, which opened for the Tokyo Olympics/Paralympics, but I unfortunately had to cancel my visit due to the COVID-19 pandemic. Since things have calmed down with regards to the pandemic, I visited Japan to meet with our trusted partner Tanaka Kikinzoku Kogyo, which is the sole agent of the ‘Philharmonic’ in Japan, to discuss various matters regarding the Japanese market and future strategies.”
―Gold prices have been trending at record high levels, and this has lead to growing interest in gold.
“Austrian Mint’s precious metal products have been performing well in terms of sales, and our average sales during the 2-year period spanning 2021-2022 was close to 3 billion euros. Most notably in 2022 our sales reached a record high 3.3 billion euros. We believe that various factors had a positive effect on sales, including the COVID-19 pandemic, Russia’s invasion of Ukraine and the global inflation trend. However, the growth in sales slightly slowed down in 2023. We believe that the increase in people having already purchased enough gold for the time being and also the central banks of Western countries keeping interest rates high had a negative impact on sales. Having said that, we are not pessimistic about the current situation. This is because we believe that gold prices will continue to see a rising trend over the long-term. The supply of gold is becoming limited due to such factors as the declining grades of gold found in mines, and also due to regulations regarding mines being strengthened, including those related to work conditions at mines and various social/environmental regulations. We believe these factors will lead to increasing the scarcity value of gold. Although there may be a certain level of fluctuations in prices, we still predict that prices will continue to see a rising trend over the long-term.”
“While sales decreased in 2023 in comparison to 2022, we still earned 1.2 billion euros. Considering that our sales in 2019 was 700 million euros, the 1.2 billion euros we earned is a respectable number. Personally I am predicting that in 2024 we will achieve the same levels of sales as in 2023.”
―Has there been any changes in your business, for instance the purchasers of Philharmonic?
“There have not been significant changes in the purchasers and market share of Philharmonic. Europe, Japan and the US are our 3 core markets, and in Austria, our largest market, we have a market share of around 85%. We have top market share in Japan as well. I think we have the fourth or fifth highest market share in the US. However, we will not sell the coins at a discount just to increase market share. We would like to provide coins of the highest quality at steady prices. Even during early spring of 2020, at the height of the COVID-19 pandemic, Austrian Mint was able to continue to supply coins. This stable supply operation is one of our advantages.”
―How do you regard the conditions related to gold?
“After Russia’s invasion of Ukraine, emerging countries began to move away from the dollar, and some countries including China and India have been increasing their purchase volumes of gold. It is predicted that the central banks of Western countries will end their high interest rate policies by the latter half of 2024 or by the first half of 2025, and once they return to cutting interest rates, we believe we will see capital move back to gold.”
―You also provide a platinum coin variant of the ‘Philharmonic’. Platinum prices have not changed as much in comparison to gold, in part due to the slowdown of the global economy. However, demand for platinum is expected to grow as countries move toward becoming hydrogen-based societies in the future.
“I agree with that prediction as well. Adding to that, 50% of gold is used for jewelry, 30% for investments and 10% for industrial purposes, but platinum is mostly used for industrial purposes and only 10% of platinum is used for investments. Therefore, as progress is made toward hydrogen-based societies, or if new industries emerge, platinum will see an increase in demand for use as catalysts and raw materials and also see an increase in prices. In the past, platinum was nearly double the price of gold, but currently platinum is close to only half the price of gold. Since demand for platinum will begin to grow going forward, now is the time to purchase platinum. The trends regarding silver can serve as a precedent. As with platinum, a high ratio of silver was used for industrial purposes and was traded at low prices, but most recently their prices surged around the time when there was an extraordinary burst in demand for use in solar panels. We are predicting that a similar trend may occur for platinum as well.”
―What is your sales strategy going forward?
“Sales in Japan remain steady in part due to our organization having a trusted partner in the country. Since we already have a high market share, rather than working on increasing our market share we would like to work on expanding the market. As part of this measure, we are planning to increase online sales in cooperation with Tanaka Kikinzoku. In Europe, apart from Austria, we would like to improve our business in Germany, but we face stiff competition from the South African gold coin, which has a long history similar to the Philharmonic and has high market share. Unlike our strategy for Japan, our strategy for the US is to pursue increasing our market share. In the US, the country’s Eagle coin and Canada’s Maple Leaf coin have high market share, but we believe we can increase our market share in cooperation with local partners.”
“90% of our platinum coins are for the Japanese market, in part due to the fact that we started minting the coins upon request from Tanaka Kikinzoku. Going forward, we would like to continue to increase our sales volume in Japan, and we have a plan for increasing our supply capacity. We would like to establish the necessary operations that will enable us to supply enough coins even if there are increases in demand.”
―What are plans going forward in terms of your activities in Japan?
“We are interested in the World Expo to be held in Osaka next year. While we are still at the stage where we are considering various matters, we would like to participate in some way through chambers of commerce or other means. We believe the World Expo provides a good opportunity to present Austrian Mint’s products.”
“The Japanese people have similar temperaments to Austrian people. For instance, they are dedicated to quality, respect manufacturing and working by hand and they also love music. Therefore our countries have been able to form good relationships, and Austrian Mint has developed a strong trusting relationship with Tanaka Kikinzoku through our cooperation spanning 35 years. Going forward, we hope we can continue to maintain our steady cooperation and trusting relationship for many years to come, and we believe this relationship will enable both of our organizations to achieve growth.”
