A major portion of the company’s output is exported with most shipments going to North Africa and with an expansion coming prospects look particularly good for overseas sales
The UAE’s RAKtherm, a manufacturer of plastic pipes and fittings, has made its first inroads into Indonesia, the latest development in a series of overseas market penetrations in recent years.
RAKtherm, whose production facilities are in Ras Al Khaimah and is part of Saudi-based Tahweel, has seen output steadily increasing over the past few years and is in the process of raising production capabilities through setting up of a new plant in proximity to its existing one.
The company makes PP-R (polypropylene random) and PE-X (polyethylene cross) pipes and fittings to supply the construction sector. Its products help deliver pressurised hot and cold drinking water as well as under-floor heating in residential, commercial and industrial buildings.
The company offers a wide range of PP-R and PE-X piping systems and aluminium composite pipes.
Production in 2014 was 800 tonnes monthly compared with 650 tonnes in the previous year, said plant manager Ehab Sharaf. “This year we’re producing at 1,000 tonnes,” he announced.
“We have a new plot of 20,000 sq m in the same area and propose to build a new plant by the end of 2016 that will have capacity of 200 tonnes per month. In a three-phase configuration we hope to achieve 1,000 tonnes in four years.”
Some 60 to 65 per cent of output is exported to markets including the GCC region, the wider Middle East and Europe.
“A new market for us this year was Indonesia after having stamped our footprint in Algeria and Libya in 2014,” said Sharaf.
While the Gulf accounts for the largest segment of export income, 42 per cent, Egypt is the number one individual market, making up 40 per cent of all exports, said the official.
“The Egyptian market is large; the sizable population gives us the opportunity to capture a higher share. Sales there are also helped by a strong agent we have posted in Cairo,” said Sharaf. “The Egyptian market surged 20 per cent in 2014 over the previous year.”
Shipments to Egypt began in 2010 but suffered a setback in the next two years because of major political unrest in 2011 but picked up significantly in 2013 and the following year.
Eighteen per cent of exports go to markets including Morocco and Europe. Saudi Arabia accounts for 25 per cent of GCC shipments out of the UAE.
Sharaf said exports to Africa and Malaysia will be stepped up next year. It was keen on India but saw meagre prospects there because of high import taxes and large-scale use of old-fashioned pipes made from cPVC.
The plant manager highlighted that RAKtherm products are designed to withstand constant temperatures up to 70 deg C. They enjoy good compression strength and elasticity and offer strong resistance to corrosion and chemicals.
The Ruwais (Abu Dhabi) firm Borouge supplies raw material and useful research material. Sharaf said Borouge sees RAKtherm as an indicator of how products manufactured from the raw material it supplies are faring in local and international markets.
In 2009 RAKtherm developed a multi-layered sunlight protection reinforced pipe which has been well-accepted by markets. It is selling particularly very well in Bahrain as “Bahrain knows the product well” and has also registered good sales in Egypt and Kuwait,” said Sharaf during the gulfBID exhibition in Bahrain.
“A product we developed this year was one that integrates UV material with brass threads for attachment to pipe accessories; it was well-received by plumbers, contractors and consultants,” said Sharaf.