RAK’s GDP has grown by more than 50 percent over the last four years and the fast growing emirate riding a wave of massive inward investment is expected to clock an annual growth rate of over 15 percent in the next few years. RAK Investment Authority, RAKIA, this is what they have been saying. So I would like to know from your point of view how you assess the RAK economy and also what are the regional opportunities for our investors?
So the question is how the RAK in general as an Emirate would become an important economy as apart of the United Arab Emirates as a whole and a region. The last four years definitely the economy quadrupled because of the accession of the crown prince, his highness prince Saud and since he accessed to the crown prince position he contributed and he designed a vision, and he master planned the whole Emirate. The Ras Al Khaimah emirate started portraying itself as a second option after Dubai or next best position after Dubai. This division was translated in establishing investment agencies, those investment agencies have worked as Ras Al Khaimah free trade zone to establish rules, regulations and legislation where the decree of the RAK free zone has really been established in the year 2000 and to help the investors in the inward investments to understand the opportunities available in Ras Al Khaimah and the location where Ras Al Khaimah is located, with its own facilities such as the ports and the airport. We take advantage of the issues in Dubai and relocating lots of the flow of investments to Ras Al Khaimah. So the last four years has definitely impacted the number of companies from a 300 percent increase, the GDP per capita, also on the gross domestics; these have really improved and increased drastically.
Do you think that, as you mentioned, RAK free trade zone has influence on the general economy of RAK?
Very much, because registering over 4,000 companies for the last seven years has so far impacted the economy of Ras Al Khaimah; from the household to the business to trade. Most of the companies use the ports and the airport; most of the companies have established themselves here. The recent company from Germany has invested handling 50 million Euros, the largest investment in Ras Al Khaimah’s history was through us. Also, we brought the investments in tourism, the ORASCON group, one of the largest groups in the region have invested 5-star hotels that we worked as the RAK free zone to attract them. The unique thing about these investment agencies that we are working for in the RAK free trade zone is opening its arms as a gate to all types of investments, from the tourism to the industrial to the services to trade; to make sure it is defiantly integrating itself into the economy. So the hotels would be used, the exhibition centers…So the RAK free trade zone with a number of companies registered today has definitely contributed to the economy of Ras Al Khaimah. We have various projects, we established a business center in Ras Al Khaimah providing all the services that are needed to respond to the investors or to this flow reaction. As an example, the services we have now are dealership as a group, we have a consultancy from Emirates group, we provide this service because every investor that comes needs the services to establish themselves, get their courier, get their office up before they do the major. So we have to put these things in the heart of Ras Al Khaimah as a supported flow of investments.
To go back in history, The RAK free zone was created in 1996 and if you look towards last year in 2006, the free trade zone has reported 190 percent growth in the number of registered companies and the attracted in 2006 kept an investment of 3.3 billion dirhams. We heard also that now there are 5,000 companies registered and you are even aiming at doubling that in the next 3 years. So I would like to know if you could assess the performance of the trade free zone and how you like to attract new investors.
Of course we have a lot of performance. The key performance indicators are like the number of companies that are registered so far. We have reached over 4,000 companies and then we have increased our revenue and within a very short period of time we have been listed as the best investment agency, the RAK free zone authority, as the best free zone in the region. We are the best and we got the award and of course our number of employees’ revenue will multiply, the number of buildings and industrial parts that we own so far. These are all indicators that an economical boom is happening. By reaching this type of success, we have discovered that there is more success to be attained and achieved. Then we went out and said well the Ras Al Khaimah free zone is the first one that is established in business centers in Dubai and Abu Dhabi. We are the only free zone in the whole country and the region that has a business center in Dubai, and we want to set up a business center in Abu Dhabi. Then again, we have one in New York, we have one in Bombay. What does a business center do for this free zone? It introduces the free zone into those countries and the business men in those countries; like in New York, in Istanbul, in Cologne, in Germany, and in the future we are looking to open in Paris. It is to expand our marketing arm and introduce our services, our business opportunities that are available in the region, expose the construction boom that is happening and welcome and invite all the businesses to come and take a share in this world landmark and a development. If you want to see what the indicators are, it shows that this entity is becoming international. It is no longer local, now we are listed on the world map by my self being the general secretary investment agencies by having offices and business centers around the world. And that is what it shows and indicates that we plan to register by 2015 over 20,000 companies. So there is a plan from the consultancy companies to trade companies to industrial and logistics. You heard about our navigator flagship; so all this shows the drive and we just see that there is a success roadmap.
You just mentioned the navigator flagship; among the large property development that you are having, it amounts to two billion dollars, there is this navigator business campus where there will be schools, a golf course, and shuttle buses. Can you explain a bit more to our readers and viewers what this project is about?
Well this project is about being the best place next to Dubai. We have seen that companies are coming to Dubai internationally and they see this stress of traffic and the costs and the stressful life. All this has given us the opportunity to see what we can do to help get those companies out where they can establish their back office, so if we integrate one project that can be sophisticated as all the telecommunication facilities and the schools. We can bring those people and put them in one area where they don’t have to travel a couple of hours on the road; that will save them money. We are assuming not less than about 40 percent probably, we are saying that there are a lot of companies, more than 80 percent, will save not less than 10 million dollars per year, if we relocate them here. That is what prompted us to say this. We already conducted feasibility studies and the projects are in process to kick start because we see defiantly that the project is feasible and is going to be unique because of the situation that is happening in Dubai. So that does not mean we will not attract companies internationally, we are going to but the product that we are offering is unusual and it will help the business man and the investments from over seas increase their profits and the over heads will be lower and yet they enjoy that they are next to Dubai and they can do their business; they go off and enjoy the beach. That’s what we are hoping for.
Ok, so when can you put a time frame on that? When are you starting with this one?
The time frame is supposed to be by the end of this year. We are already wrapping up the feasibility studies and everything. We have already tested the samples and checked the few companies, such brands as CISCO and other companies. We are calling and inviting them to come and establish their back office here with us and use this. So at the end of the year is our kick start for the project.
Ras Al Khaimah free trade zone will be one of the largest, most effective and most environmental-friendly free zone in the gulf region. It will become the center of business excellence with operators in infrastructure, aggressive marketing and a keen interest in promotion, commerce, and ownership. I would like to know what the strategy is for excellence. What is your business motto? Can you give us some competitive edge to it?
Ok that is the question. What is going to make us different than the rest; one of the things that we have applied is the customer service of posh. We have already been the best innovative type of investment agencies because we respond in a very quick time to the needs of the clients. We go all the way to their households and we support the relocation of the investments and we support their business. So there is a lot of personal approach from our side that makes us different and because we see that at the end of the day the investments are people, and people have to be paid attention to. And the proof is, as I said, we are the only free zone who have gone and said today investors can bring a business centers to Dubai and we have their activities, factory, storage and everything here and they want to be in Dubai. I can host you as well in Dubai, and maybe I can host you in New York, or Bombay or Tokyo or Cologne. So this gave us the edge so that we are not just bringing or attracting companies with out really staying with them and making sure that their business is growing and they are benefiting from the establishments in Ras Al Khaimah. The environment as you probably know is part of people’s life and we are making sure that every investment is observing and respecting the international rules and regulations by keeping the environment clean. Other wise, like I said, it goes down to people when they come here and they invest, they have to live in a clean environment, in a nice environment. And you know in Ras Al Khaimah and in the whole UAE in general, safety is there from the political point of view. The government is stable and in fact is involved in supporting the businesses. They have very easy legislation and are very responsive to every investor and every person. Safety is very important as well, the crime ratio is zero. All this is a combination of making the excellence of this center because when business men come and say “Well if I am in the UAE in general, Ras Al Khaimah in particular, I am safe, I am with these people. They love to work and we are working together”. This is what makes the place in general in the UAE and Ras Al Khaimah as safe haven for establishing and doing business in a very safe and positive environment.
Another point where you seemed to be strong is also your corporate social responsibility. You have employed people here that are from RAK. Can you explain to us a bit more about how you approached this area, corporate social responsibility?
I think that is the key point again in these types of agencies, the RAK free zone. His Highness the crown prince is the boss and the chairman, Sheikh Faisal. This project will only be good and will help benefit the local community. Our ratio in employing nationals is past 40 percent which is very unusual and very aggressive. We see that there is a lot of learning and developing the skills of the nationals, because the economy is going to boom when the nationals are learning and interacting with the investments and the investors here and they are picking from them. They learn the skills and then they take the skills to the local economy. So we see that the investment agency, RAK trade free zone, is contributing tremendously to the local community; creating jobs and the skills and job opportunities. That is what we see as we are excelled in all the agencies and we see that there is more to offer to the local community by even sending them to the international business centers and sending them to the missions to learn in other countries so they can bring more skills, and that is what adds more value to the country and to the local community.
Now if you look at yourself from the other side, from the companies that are interested to come here or not, what sort of company are you looking for? How do you identify and select these investors? And why should a company think that RAK is for them, to be installed here?
Well it depends. In our philosophy we don’t just go to the investors just to say “look buy our product.” Our drive is to look for the best product for our investors, so that is the approach that we are using. We don’t just say “okay we have one product, let’s go and sell it to anyone”. No, we design, we go out there to the market, we talk to the investors and ask how it is that we can help you establish and improve your business. Then we select by targeting the industries that we see have a lot of potential in. As an example, we are focusing on the service sectors which are very clean and have a lot of value added and are more doable. You can see from the 4,000 plus companies about 85-90 percent of them are mostly service and trade. Those create the mass and that is what we are trying to do, creating the mass. We are targeting the service industries, then the manufacturing industries, we see what is a boom in the country, and then we say the boom is construction and trade. As an example, gold and diamonds: we go to the investors who come and want to set up a gold and diamond industry to manufacture the jewelry, so this is in the industrial part. Then again you have the other sectors like the management and hotels. We even attract schools and education. So that means we are targeting the industries that add value to the local economy and yet the industries will benefit. So we have a strategy where we see what the best products are that we can really offer the investors, like the school hospitalities. We have gone all along and we have introduced them to the hotels that are available here and we showed them where they can train. See, we are opening opportunities to those investors, because we need schools that can provide education to the local community and the expats and produce managers in the hospitality industry. Tourism can excel and become in the future on of the best industries to target according to the vision.
Ok, to sum up this interview, I would like to have your vision looking towards the future, maybe in the next five years: how do you yourself see the RAK free trade zone developing and also how do you see RAK itself developing? And what are your priorities?
Well, how we see ourselves in the future is that the RAK free zone will grow and the future will have many speacialized industries and many specialized management parks that will diversify from logistic parks to business parks to ship yards and the yacht parks. It will be specializing where each industry will have its own management.