Dubai aims to stamp mark on designer jewellery
The lustre of gold has attracted mankind from time immemorial and Asia in particular has always been partial to the yellow metal, with it forming an integral part of its culture and tradition.
How deep-rooted these traditions and the fascination for gold are can be gauged by the fact that despite the price of the precious metal hitting all time highs due to geo-political tensions, short supply and increasing oil prices, people are still buying gold.
And with good reason too. In the past eight years, gold has already proven to be a very successful hedge against both inflation and deflation fears. This is one reason why it is in a secular bull market and has outperformed the Dow hands down for the past five years.
While earlier it was mostly Asians who used to buy gold for hoarding as a nest egg, the West has also warmed up to it. Due to the global economic downturn, investors are again looking to gold for the protection of their wealth.
Like the rest of the world, the UAE also loves the precious metal, if trade figures are anything to go by. Experts say the volume of gold traded in UAE is worth $19 billion (Dh69.7bn) with 559 tonnes of gold being imported each year and export touching 287 tonnes. Dubai, which until recently was mainly a trading and export hub for the Middle East and North Africa region, also wants its share of the golden pie and is aiming to position itself as the 'City of Gold' and the 'Gold and Jewellery Destination of the World'. It is being aided in this effort by the Dubai Gold and Jewellery Group (DGJG) and the International Gemological Institute (IGI).
The two held a three-week jewellery designing programme for professionals and jewellery enthusiasts to give a boost to Dubai's nascent jewellery designing business. Emirates Business spoke to them to find out the trends, jewellery designing in the UAE and what is being done to position Dubai as a jewellery hub.
Talking about the changes in trends, both in terms of jewellery buying and investments, Lata Manghnani, general manager, IGI said: "With residents from 180 nationalities, Dubai is probably the only destination with an international jewellery collection to suit every taste and budget.
"Dubai caters to an international consumers, so various designs are available here – ranging from international designs to Arabic and traditional Indian jewellery. While novel designs also do well in the market, the primary gold consumers from among the Arabs and the sub-continent have stuck to their traditional favourites, which are usually in demand during wedding seasons.
"Over the years, we have seen the emergence of light-weight contemporary designs endorsed by young Arab celebrities which have proved to be runaway hits with the youth."
Swapna Nair, general manager, DGJG said: "A lot of people in the UAE still buy gold as an investment. Especially since with its increasing price it has established itself as a hedge against our inflationary times. We do not see the investment aspect of gold diminishing but we also see a trend for gold jewellery as a fashion statement, especially among the younger generation."
According to figures provided by the DGJG, the volume of gold traded in UAE is worth $19bn. As far as local demand is concerned, as per figures released by the World Gold Council, the investment in bullion is 250 tonnes and in jewellery 100 tonnes.
Earlier in the year, in an exclusive interview, Dr David Rutledge, CEO of Dubai Multi Commodities Centre, told Emirates Business that gold trade through Dubai reached Dh19bn in the third quarter of 2007, an increase of 55 per cent from the same period in 2006. In the third quarter of 2007, a total of 174 tonnes of gold was imported into Dubai, 47 per cent higher than the 118 tonnes in the same period in 2006. During the same period, a total of 68 tonnes of gold was exported from Dubai, 28 per cent higher than the 53 tonnes in the same period in 2006.
Nair said: "Positioned between the East and West, Dubai has long been a major regional centre for gold bullion and jewellery, catering to the strong demand from the Arab world and India. The amount of gold jewellery consumed locally in the UAE is 100 tonnes annually. The tax-free jewellery in Dubai also attracts Western tourists.
"With more than 1,000 gold and jewellery outlets, including more than 275 shops in the Gold Souk, Dubai is truly the 'City of Gold'."
And the emirate is doing whatever it takes to maintain this reputation and establish itself as the 'jewellery destination of the world'. The city offers international jewellery companies a huge number of benefits – an open and tax-free economy, ownership of businesses, a state-of-the-art infrastructure, Dubai-based Gold and Diamond Exchanges and secure transport of valuable cargo to the main jewellery retail centres through Emirates Transguard.
As part of these efforts the world's largest independent diamond and gemstone certification institute, the IGI was brought on board 10 years ago and has successfully pioneered the concept of certification in Dubai and the region.
The DGJG, which is a trade association with more than 700 members representing all sectors of the trade, including bullion trade, manufacturing, wholesale and retail, was set up in 1996 with the support of the Dubai Department of Economic Development. It was set up with the aim to support the Dubai Shopping Festival and other government-supported marketing activities that benefit the retail sector.
DGJG is the UAE representative at the World Jewellery Confederation, which represents 36 countries.
Through its association with international bodies such as Diamond High Council, Antwerp and IGI, DGJG has set world-class standards in creating product knowledge among its members.
Nair said: "As the reputation of Dubai grows internationally, DGJG actively promotes Dubai as a 'jewellery destination' through active participation in international jewellery shows to promote. It also encourages international counterparts to consider Dubai as an ideal location from which to expand any jewellery businesses operations.
"DGJG also works closely with Dubai Municipality's Dubai Central Laboratory to ensure the purity and quality of the jewellery available in Dubai. We hold the annual City of Gold Conference which brings together the leaders of the international jewellery industry in Dubai to discuss the main issues facing the business."
Another key task the group undertakes is providing extensive training to its members in various aspects of the jewellery business. The IGI's School of Gemology also complement's DGJG's work by imparting intensive training in Rough Diamond Grading, Polished Diamond Grading and Colour Stone Identification programmes and has trained more than 2,000 professionals from the UAE and neighbouring countries.
The IGI and DGjG recently conducted a three-week jewellery designing programme that was aimed at meeting the needs, requirements and design standards of the international jewellery industry. "As customers become increasingly fashion conscious, there is a strong demand for unique and beautifully crafted designs," said Nair.
Manghnani said: "Unfortunately, despite the fact that jewellery designed in the UAE is getting very popular with residents and tourists alike, there is definitely a shortage of professional jewellery designers, as Dubai is just burgeoning as a manufacturing hub.
"With local manufacturing gaining importance in Dubai and the jewellery businesses being on the constant lookout for fresher designs, the future for jewellery designing definitely seems bright," said Manghnani.
"Out of the 10 students who finished the jewellery designing programme conducted by IGI in association with DGJG, four found placements immediately after the course. Our jewellery designing programmes that were initially available only in India, have proved to be exceptionally successful in Dubai and we are happy at the positive response we have got.
"Today, Dubai has become the centre of our educational programmes for students from the UAE, Saudi Arabia, Egypt, Jordan, Sudan, Nigeria and many others. This further cements Dubai's position as the regional industry hub," said Manghnani.