Dubai’s Pure Gold to invest US$ 50 mn in Sri Lanka
Pure Gold, the reputed and awardwinning multinational jeweller based in Dubai presently in Sri Lanka, is planning to invest US $ 50 million in the country.
“Pure Gold Group’s entry to Sri Lanka strongly enhances our gold industry profile. Pure Gold’s initial investment here is $ 50 million,” revealed Industry and Commerce Minister Rishad Bathiudeen in the aftermath of his meeting with Firoz G. Merchant, Chairman of Pure Gold Group (PGG), Dubai in Colombo yesterday.
Sri Lanka’s current gold needs are totally met by gold imports and the annual gold imports are in the range of $ 30 million (and upwards) and the more than 6 metric tonnes imported are used for domestic consumption as well as in export manufacture.
No clear estimates are found on the domestic retail sector value but the gold pawning industry in Sri Lanka is estimated to be (cumulative) around $ 52 million (Rs 7 billion).
Commercial Bank and Bank of Ceylon are among top importers of gold to Sri Lanka and the two banks have come to be known as suppliers to the domestic market and jewellery industry ‘at competitive rates’.
Out of US $ 10.9 billion of Sri Lanka’s total exports in 2011, “diamonds, gems and jewellery” sector claimed 4.9% at $ 531.57 million registering a strong 30.04% growth in comparison to 2010 exports ($ 408.77 million).
Minister Bathiudeen, addressing Pure Gold Chairman Merchant said that Sri Lanka has a goal of achieving $ 20 billion exports in 2020 and gem and jewellery will play a key role in achieving that.
“In 2011 we exported $ 28.& Mn jewellery which rose by 55% from 2010 and the US, Hong Kong and Belgium being our top three buyers out of 39 countries buying from us in 2011. We are pleased that Pure Gold joining the supply chain for our jewellery export industry sector so that the export jewellery manufacturers get their gold at competitive prices,” he said.
Merchant PGG is ISO9001:2008 certified retail jeweller of the Middle East, has more than 100 stores across UAE, Oman, Bahrain, Kuwait, Qatar and India.
Revealing his entry strategy, Merchant said that they are planning to start immediately in Sri Lanka.
“Our first round investment proposal for Sri Lanka is $ 50 million to enter Sri Lanka’s gold retail sector first, followed by wholesale and manufacturing and manufacturing for exports thereafter. In Sri Lanka, we will be setting up 30 sales outlets by 2015/2016 –this includes duty free shops and shopping mall-based outlets. We will also be introducing our trademark “Pure Gold 18 carat gold jewellery with diamonds” which is widely sold in the EU markets to Sri Lankan market,” he said.
Merchant noted that they get all their supplies via Switzerland.
Merchant had already announced that PGG is on a $ 272 million expansion drive during the next five years and would enter Saudi Arabia, Sri Lanka, the Maldives and Malaysia with new stores.