Pest Analysis for Egypt

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United Arab Emirates
a. Introduction
Dubai, the most well-known state in the UAE, became a major hub for trade since 1985 with the establishment of the first and biggest free-zone area in the Middle East - Jebel Ali. Since then, it developed as an international business center and a modern tourist destination. Over the past ten years, since 1996, when Dubai Airport Free Zone was established and the first Dubai Shopping Festival launched, the city has positioned itself as the „City of Gold‟ and became a major trading hub for gold and jewellery in the Middle East. Accordingly, at any given time, there are over 25 tons of gold on display in jewellery shop windows in Dubai. On the other hand, the sales volume of imported jewellery in Dubai represents 73% of total market size. With Dubai ranking the third most significant re-export center in the world after Hong Kong and Singapore, re-export trade forms one- third of the entire trading sector in the UAE. In addition, UAE, Lebanon, and Isreal are the only participant member in Kimberley Process in the Middle East and the Gulf; hence, the only point of entry for rough diamonds, with trade reaching $3.9 billion in 2006. b. IndustryStructure

With regards to industry structure and size, Dubai has over 700 jewellery retail shops. The traditional Gold Souk alone has more than 275 shops within an area of 0.5 km square, which is considered the densest concentration in the world. The retail market is also divided into 80% stand alone retail outlets and 20% chain outlets. On the other hand, Dubai has developed its jewellery clusters to be [Benchmarking]Page 135

Egyptian Jewellery Industry Draft Report
in the form of highly designed towers where AU Tower, AG Tower, and Almas Tower are planned to open by end of 2007. First, the AU Tower specializes in gold trade and is designed to meet the specific requirements of a wide range of gold-related businesses including: gold, precious metals and bullion traders, jewellery distributors, financiers, insurance companies, industry-support services, jewellery designers and prestige jewellery brands. Secondly, AG Tower, specialized in silver trade, will provide the ideal setting to conduct business, allowing the world's leading precious commodity businesses an opportunity to capitalize on the growing regional market in the Middle East. Finally, the Almas Tower is a 64 floor landmark building dedicated to serving the diamond trade. It consists of 400 regional and international diamond companies, a business center and retail area, as well as Dubai Diamond Exchange, on an area of 2,000 m2. The average fabrication fees for gold jewellery in Dubai depends on the design, where the highest rate is for Indian made jewellery design at $2.45 per gram for 22K, the best selling variant with the purest caratage due to the high Indian population rate in UAE. Italian jewellery follows with $1.9 per gram. For Singapore jewellery, the average making charge is $1.36 per gram. Finally, the cheapest making charge is for local designs at $1.24 per gram. c.Gold Fabrication and Consumption

Gold jewellery consumption is almost double fabrication, since Dubai imports a significant volume of jewellery and is one of the cheapest places to buy jewellery due to its tax-free status. UAE is ranked as the 6th largest gold jewellery consuming country, and is expected to grow even more in the coming years. With the country‟s positioning of Dubai as a regional and global trading hub, there has been a continuous rise in both fabrication and consumption as of 2003, regardless of the increasing global gold price, to reach its highest consumption [Benchmarking]Page 136

Egyptian Jewellery Industry Draft Report
volume ever with almost 100 tons in 2007, compared to less than 40 tons in 1997, based on Gold Demand Trends and Gold Survey 2007. This was due to the number of tourists who represent a large portion of jewellery sales in Dubai who have been continuously increasing as a...
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