Gitanjali Gems enters into MOU with Sulieman Al Othaim, Saudi Arabia

Gitanjali Gems Ltd has announced that the Company has entered into a Memorandum of Understanding (MOU) to have a 50 : 50 Joint Venture with Sulieman Al Othaim of Saudi Arabia, one of the leading retail chains in the Middle East.

This JV will facilitate the entry of the Company into mainstream retail in Saudi Arabia leveraging Sulieman Al Othaim's chain of various specialty stores across the region and will augment the profitability considerably. As Saudi Arabia is one of the largest diamond jewellery consuming markets, the Company expects a robust growth from this venture in the following years.

The JV between the Company and Sulieman Al Othaim group is part of the group endeavour to expand to new markets. The JV would provide platform for the Company to create a strong position in Saudi Arabia along with the JV partner.

The Company envisages the following activities under the JV:

1. Create various new branding programmes to market Jewellery in the Kingdom of Saudi Arabia. This would include brands like Rayana, La Baguette, Hart to Hart. These brands will cater to the local population.

2. Market the Indian brands from the Company portfolio like Nakshatra, Asmi and Sangini in Kingdom of Saudi Arabia. The success of these brands in UAE has opened up a huge market in the Middle East as these brands are preferred by Locals as well as Non Resident Indians.

3. Distribution of the above brands in Kingdom of Saudi Arabia by way of setting up additional retail stores in next two years time. Apart flow that brands would also be marketed through other independent retail chains.

4. The JV would also set up the whole jewellery business that would service various independent/ chain stores.

Source : Equity Bulls

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