Dubai - The local gold fabrication industry, which accounts for less than 30 per cent of UAE's annual jewellery demand of some 250 tonnes, is geared for a major leap this year to cope with a predicted heavy surge in jewellery offtake, industry sources said.
With the jewellery demand in the UAE, the world's fastest growing market for the yellow metal ornaments and diamonds, poised for an annual 12-15 per cent growth - a trend consistent since 1992 regardless of gold price fluctuations - the local production is set for a 25 per cent jump to 75 tonnes this year. Last year, the local jewellery manufacturing sector, the third largest in the Middle East after Saudi Arabia and Egypt, boosted its production level from 45 tonnes in 2003 to 60 tonnes. And over the next few years, this is bound for a sustained growth given the increasing demand driven by a cash-surplus economy, big spurt in tourist inflow and a vibrant population growth, according to Tawhid Abdullah, Chairman of Dubai Gold & Jewellery Group.
Abdullah said the local jewellery manufacturing industry, making mostly generic hand-made jewellery vis-a-vis machine-made jewellery imports from the Far East, the Subcontinent and Europe, got a boost with the opening of the purpose-built premises - The Jewellery & Gemplex - at the Dubai Metals & Commodities Centre (DMCC). Open to international and regional jewellery manufacturers, the facility has been offered to members on a freehold basis and expected to support the jewellery industry and its international integration objectives.
Dubai, currently the highest per capita consumer of gold in the world and the world's second largest re-distributor of bullion, imported 503 tonnes and re-exported 260 tonnes of gold in 2004. At the peak of its gold trade in 1997, Dubai imported 660 tonnes of gold bullion and re-exported around 600 tonnes worth $ 6.5 billion. In 2003, the value of its imports of diamond, gold, pearl and other gems by the USE exceeded Dh25 billion.
"There is a real need for increased local output supported by an established production base given the continued buoyancy forecast for the jewellery trade in the coming years," Abdullah said. Although the USE jewellery products, made of scrap gold and bullion bars, provide an important complement to imported jewellery, local fabrication accounts for only 25-30 per cent of the USE jewellery market. The rest of the requirements is met by imports.
With more than 250 small and large fabrication units now offering a combined production capacity of 100 tonnes in the UAE, and several more expected to start at The Jewellery & Gemplex, the local jewellery production is set to flourish on quality and innovative designs.By Isaac John
© Khaleej Times 2005
