DUBAI, (Reuters) – UAE’s Emaar Industries and Investments and Damas Jewellery plan to build a 1 billion dirham ($272.3 million) jewellery factory in Dubai in February, the companies said on Wednesday.
It will be the largest of its kind in the United Arab Emirates and the latest addition to the rapidly growing gold industry in Dubai, known as the City of Gold.
Around half of the new factory’s output will supply Damas’ retail network in the UAE while the rest will be exported to Damas’ international retail outlets and other companies, Tawhid Abdullah, managing director of Damas, told Reuters.
The plant will also make jewellery for international brands and is a step up from the small workshops Damas currently uses, he said.
“Manufacturing became a necessity for our company given the increasing demand for jewellery in the region,” Abdullah said.
The venture marks the entry of Emaar Industries and Investments (EII) into Dubai’s lucrative jewellery market. The company wants to increase its presence in jewellery, with Saudi Arabia among the list of target markets, said Ahmad Khayyat,
chief executive of EII.
“Going into the jewellery industry is within our core activities…we want to diversify our portfolio,” Khayyat told Reuters.
“We will very shortly set up a similar business somewhere else in the region,” he added.
EII owns 52 percent of the new venture, which will trade as Emirates Jewellery Manufacturing Company. EII is a subsidiary of Emaar Properties , the largest real estate developer by market value in the Arab world.
Both EII and Damas expect a turnover at the plant of about 1 billion dirhams within the first 5-6 years of operation.
“According to the plan we have we will make profits by the middle of next year,” Khayyat said.
Dubai’s goal is to become one of the major trading centres for gold along with London, New York and Hong Kong, capitalizing on its proximity to the world’s biggest gold consumer, India.
Dubai has two gold refiners — Emirates Gold and the smaller Al Ghurair Giga Gold.
Another two refineries are being built, one by the gold and jewellery maker ARY Traders and the second by conglomerate Al Gairth. These are due to come on stream in the fourth quarter of 2007.