Jewellery chains make push for ‘Made in UAE’ stamp

Dubai: The ‘Made in UAE’ imprint is to feature more prominently in jewellery sold both in the local market as well as shipped out to the other Gulf markets and even beyond. Two leading jewellery chains have confirmed they will be installing new — and massive — capacities to push this through.

Malabar Gold & Diamonds will set up a Dh75 million facility at Dubai TechnoPark (part of Economic Zones World and a subsidiary of DP World) to design and make up to 2,000 kilograms of jewellery (18-karat, 22k and studded pieces). A second phase of expansion will follow immediately, with the estimated cost at Dh25 million. These will be over and above the two facilities the retailer operates in Sharjah, with a combined monthly capacity of 500 kilos.

“The UAE already has multiple gold refineries — such as those from Kaloti, Emirates Gold and Al Etihad Gold — and Dubai, I believe, has already emerged the principal distribution hub for the global trade in rough diamonds,” said M.P. Ahmad, Chairman of Malabar Group. “What’s been missing is a strong base to create ‘Made in UAE’ stamped jewellery manufacturing, which we now hope to fill. New capacities, from us and others, will make sure the UAE’s gold and jewellery sector takes care of the entire value chain.

“Currently, Turkey can claim to be the regional hub for the jewellery making side of the business. Dubai and the UAE can easily claim that title in future.”

Meanwhile, Kalyan Jewellers said a decision on a second jewellery design plant in Sharjah will be taken in its next financial year, starting April 1, 2016. “It was just four months ago that the first base was commissioned, and which has been achieving a capacity of 150 kilos a month,” said T. S. Kalyanaraman, Chairman and Managing Director of Kalyan.

“The output is already utilised for our UAE and Kuwait stores ... but we already need to start thinking of a second base as and when we move into Qatar [with six stores] and other markets. Plus, we are adding more locations in the UAE from the current 10.

“Compared to last year, which was when we launched our stores, we have seen a 50 per cent plus volume gain at our UAE stores in the year-to-date. Those volumes require us to invest in local production.

“Also, having our own production base removes any issues we might have in ensuring continuous supply of inventory for the stores. Relying solely on third-party sources can often be tricky.”

Other factors too — from a longer term perspective — will influence jewellery retailers’ decisions to set up production facilities in the UAE. The Gulf states should, at some point, move towards an unified customs tariff.

“At such a point, localised production in any Gulf state will ensure customs duty exemptions will apply within the Gulf economic bloc,” said a jewellery industry source.

“Currently, Dubai offers a very low duty structure on gold imports, while most of the other Gulf states have it at 5 per cent. Even if these were unified under a customs union, there will be overall benefits for the industry in the longer term.”

Notwithstanding the well-publicised financial issues the owner of a jewellery store operator has been facing in recent weeks, gold and jewellery category continues to be among the better performers within the local retail sector. Domestic shoppers continue to make their regular trips to the stores, and in greater numbers if gold prices slip below Dh130 a gram as it did during late July.

“Our Dubai store, which opened earlier this year, was the first international exposure for us and there are plans to add to more,” said G.R. Ananthapadmanabhan, Managing Director of GRT Jewellers.

“It has nothing to do with any saturation point being reached in India — far from it. The key attraction being in Dubai is the way it allows us to reach out to a different kind of consumer. It raises our game.”