UAE-Ras Al Khaimah poised for economic growth 20-05-2010
By David Morgan Thursday, 20 May 2010 00:56
With the biggest quarry in the UAE and one of the largest pharmaceuticals producers in the Middle East, Ras Al Khaimah (RAK) is poised for significant growth, a new report into the emirate says.
Its free trade zones are attracting more attention from both regional and international industrial firms.
Finding new export markets is a key goal for businesses in the emirate and this aim is assisted by its strategic location, according to Oxford Business Group’s new report, Ras Al Khaimah 2010.
The industrial heartland of the Northern Emirates, the RAK economy benefits from a central location, a long coastline and large stretches of open land, while its limestone deposits have made it a natural centre for the UAE’s cement industry.
RAK’s industrial sector performed well in 2008 and 2009 in the face of difficult market conditions and there is currently an excellent base for expansion.
The success of firms already established in the emirate indicates that there is potential for others seeking to set up operations there to use RAK as a base for exporting to the GCC as well as Africa and South Asia, where markets are growing rapidly.
Meanwhile, the report shows that the property and construction sectors in RAK have remained buoyant with most major projects moving forward despite a challenging year in 2009.
RAK Properties, the sixth largest developer in the UAE and the biggest in the emirate, is continuing with work on its $3.27 billion Mina Al Arab development, a flagship project which will be a multi-use resort and gated community on the seafront. Some 94 villas on the development site were released in the first quarter of 2010 with a further 213 expected to be ready by November.
Rakeen, which is RAK’s other major developer, is continuing with its Al Marjan Island project, which features a range of residential, hotel, tourism, commercial and retail aspects.
Many of the new developments under way in RAK are designed to cater for a projected increase in the number of tourist visitors in coming years. With its excellent seafront locations and new investment in mixed-use developments, RAK is becoming a set to attract more visitors and its tourism sector is expected to play a greater role in the economy in the future.
An estimated $5 billion in projects in RAK are currently planned or under way, with the aim of adding 3,700 new hotel rooms over coming years, trebling existing supply. Capacity expansion is a must given the emirate’s ambitious plans to increase tourist arrivals to 2.5 million by 2012.
Cultural heritage, natural scenery and local wildlife all attract visitors and environmental projection is a key priority of planning regulations that govern new developments.
Meanwhile, RAK’s free zones offer a number of advantages: corporate tax exemptions, a lack of foreign exchange control and repatriation of 100% of capital and profits.
It is a testament to the success of RAK’s economic model that during the global recession of 2009, the number of companies registering in the emirate continued to grow through the period of difficulties.
The RAK Investment Authority (RAKIA) is one of the most important drivers of industrial development in the emirate. Since its launch in 2005, it has offered a wide and growing range of services to investors seeking to get established in RAK through free zones and industrial zones. By the end of 2009, some 2,368 companies had registered with the authority.
A broad range of manufacturing companies are now represented in the emirate. A break down by sector shows that in the free zones 36% of industries produce metals; 11% produce chemicals; 11% building materials; 6% rubber and plastics; 6% wood products; 4% electronics; 4% automotive products; and 2% processed foods.
In the industrial zones, those companies producing metals account for 30%; building materials 22%; chemicals 9%; rubber and plastics 7%; electronics 7%; wood products 4%; food processors 2%; automotive and related goods 2%.
Ceramics are an important industrial activity for RAK and, by the end of 2009, RAK Ceramics was on course to becoming the world’s biggest ceramics firm, after only 20 years since its foundation.
RAK is without major hydrocarbons reserves, but is does possess large amounts of limestone in the Hajjar Mountains, which has led to it establishing the biggest quarry in the UAE.
The main player in the industry is Stevin Rock, one of the world’s biggest quarrying firms. It is a major supplier of materials to some key projects in the Gulf such as the Deira Corniche in Dubai, the Dubai International Airport and Burj Khalifa, as well as projects in Kuwait, Qatar and India.
The emirate’s limestone resources also contribute towards RAK’s large cement industry, which comprises seven players. Glass manufacturing in RAK is also a growing sector.
Turning to the emirate’s emerging automotive industry, the first fully integrated commercial vehicle plant in the GCC was established in RAK by India’s Ashok Leyland in 2008. RAKIA is seeking to develop an automotive cluster around the new plant with the manufacturer seeking as a viable and efficient supply chain, drawing in components makers and ancillary service providers.
In terms of pharmaceuticals, RAK is developing as a regional centre for manufacturing of high quality pharmaceuticals products.
Global Arab Network
The new survey of Ras Al Khaimah from which material for the above report has been derived can be obtained from Oxford Business Group. The article appears in Arab-British Business, the bulletin of the Arab-British Chamber of Commerce.
