Dubai: The UAE’s jewellery scene is sporting a richer golden hue — not just by being a prime retail market but also by being the destination of choice to make high-end pieces and branded collections.
India’s Kalyan Jewellers, which earlier this year launched its operations with a six-store network, has confirmed it is committing to a design and production facility at the Sharjah Free Zone. The facility is to have an initial capacity to handle 5-8kg of gold jewellery processing a day and will thereafter be scaled up. Investments will top Dh50 million and go up to Dh100 million, according to a top official, with the value of the bullion inventory making up a major share of the cost.
“The retail network expansion will see Kalyan touch 18 stores by March next and 30 outlets in 2015,” said T.S. Kalyanaraman, Chairman and Managing Director. “That immediately creates a captive need for trending jewellery collections across our network, and that immediate turnaround of stock required can only be achieved by having a production plant here.”
Even at the time of its first retail stores rollout in January, the group had looked at options to locate its plant before finally deciding on Sharjah Free Zone. (With the ongoing Gulf-wide network expansion firmly on track, Kalyan Jewellers has sights on a Dh2 billion turnover in these markets. It hopes to close the financial year ending March 31, 2015 with regional sales of Dh600 million.)
Sharjah, in fact, will also be hosting a new jewellery making plant from the Malabar Gold & Diamonds Group. The latter is awaiting the final set of approvals from the authorities before the commissioning expected by late next month or early January. An existing property was extensively modified to meet the needs of the plant, which would have an initial capacity to handle 30kg a day.
The plan is to supply its own network as well as clients such as Dubai Duty Free, according to Abdul Salam K.P., director at Malabar.
In the past, it was reckoned the cost of acquiring skilled labour and the wages and benefits for them will make committing such investments in the UAE too expensive for jewellers. But, now, they are seeing multiple benefits that outweigh the higher wage factor.
“The biggest advantage is the time factor — we will be able to have our products reach the market here in 48 hours if the jewellery is produced here,” said Salam. “That compares with procedural delays in India of seven to ten days from procurement of bullion to reaching the export stage.
“Plus, another major benefit from a plant here is the customs duty exemption shipping to the other GCC markets on goods made here.”
In the recent past, the local market has seen other major investments flowing into the gold and jewellery sector. The Kaloti Group last year announced a $60 million gold refinery in the DMCC cluster and one of the largest such with a capacity to handle 1,400 tonnes a year.
