RIYADH, 13 July — Only Saudi citizens will be allowed to work in shops that produce and sell gold from next month, Interior Minister Prince Naif announced here.
The move is part of the Saudization of jobs involving the sale and production of gold and jewelry to be implemented on July 22, (Jamad Al-Awwal 1), Prince Naif said in a letter sent to all provincial governors, ministers of commerce, industry, labor and the governor of the General Organization for Technical Education and Vocational Training.
The decision will allow 20,000 citizens to work in 5,000 shops Kingdomwide.
In another development, a Saudi businessman has invested SR720 million in the gold and jewelry market to meet the increasing demand for jewelry in the Kingdom which has an estimated annual consumption of 250 tons worth SR10 billion ($2.6 billion).
Al-Othaim Group for Industry and Trade has been attracted by the promising trend in the gold and jewelry market. The company’s factory with an investment of SR720 million ($192 million) employs more than 1,000 technicians, workers and administrators, said chairman of the board of directors of the group, Ahmad Al-Othaim.
The rising demand for gold and jewelry by Saudi families has prompted his group to invest in the sector, Al-Othaim said. He also noted the recovery of the gold market after a sharp fall in prices in 1999.
With an annual production of 18 tons of jewelry in the first year, his group will take 4.8 percent of the total market volume.
According to a recent study, 60 percent of the buyers are men while 40 percent are women. Saudis accounted for 70 percent of the consumers with a market share of SR6.7 billion while other Arab buyers came second with 25 percent and non-Arab foreigners 5 percent.
The market sources said the market registered a fall at the end of academic year but it has almost recovered now. The sales pick up at the start of the summer vacations when the season for weddings and engagement ceremonies commence.
According to Omar Al-Kabdi, an official of the Al-Romaizan for Gold and Diamonds the fluctuation in the sales is a seasonal feature.“The market will peak in the vacation season,” he said. On the other hand a large number of people will sell their used jewelry for low prices to raise money for their vacations abroad or to cover the high cost of weddings.
He added that during the vacation there would be a 30 percent increase in sales compared to normal times.
The sources, however, expects a 60 to 70 percent rise in sales this year because of the better economic condition prevailing in the country compared to last year.
Saudi Arabia is the largest gold consumer in the Middle East while its position internationally is third after India and the United States, according to a report of the World Gold Council. The annual gold consumption in the Kingdom, with population of 17 million, is estimated at 174 tons which in turn means a per-head monthly average of 15 grams.
The annual spending per individual is SR5,250 ($1,400) according to the report. Sixty percent of the total demand, worth between SR10 billion and SR11 billion, is locally met.
