Ras Al Khaimah has a reputation for its rugged beauty but it is increasingly gaining prominence as a burgeoning business hub with two of the region’s leading manufacturing firms operating in the construction and pharmaceutical sectors and several new companies having been set up in the past decade.

One of the seven emirates constituting the UAE, it has been developing its infrastructure at a robust space with an eye on attracting investments from within and outside the region.
Not known to have oil and gas reserves, Ras Al Khaimah is intent on making up in trading and manufacturing and seeks to capitalise on concentrations of minerals such as limestone, gabbro and silicon that exist on its territory and which could spawn related industries.
Indeed, it is the base for the world’s largest ceramic tiles producer, RAK Ceramics. It was also in Ras Al Khaimah that the UAE’s first cement factory, Union Cement Company, was set up in the early 1970s.
The industrial base is diversifying as it expands. A good example is the company Knauf which is investing Dh500 million ($136 million) to set up a plant to produce gypsum boards, metal studs, channels, drywall accessories and plaster for use on construction sites across the region. It will have capability to produce 50 million sq m of gypsum boards per year.
Saudi Arabia’s cable company MESC is setting up a $40-million manufacturing facility and RAK Steel is investing $15 million to boost its manufacturing capacity for deformed steel reinforcement bars by 50 per cent.
As well as RAK Ceramics, the emirate is home to Julphar, one of the Gulf’s first pharmaceutical companies and among the biggest in its field.
 
Industrialisation initiatives
But with the local government launching industrialisation initiatives so it does not lag far behind other emirates in the federation, much progress has been witnessed.
A significant initiative was the RAK Investment Authority (Rakia) launched in 2005. The move has paid off as the emirate has been registering double-digit economic growth year on year.
Within two years until 2008 Rakia was able to attract close to $1.2 billion in investment from all over the world in diverse industrial segments including glass and tableware, float glass sheet, renewable energy, pharmaceuticals, vehicle assembly and the hospitality business.
This year, notwithstanding the global financial meltdown, Rakia issued 289 business licences.
“The emirate’s economic diversification strategy has remained firmly on track   with licences issued to a diverse range of businesses,” says Dr Khater Massaad, CEO, Rakia.
Licences issued by the authority since 2006 now total 1,983 with the largest chunks going to commercial (529) and industrial (507) ventures. As many as 450 licences were issued to consulting and services companies, 288 to trading firms and 209 to media operations.

Flourishing hub
A flourishing hub is the RAK Free Trade Zone, which grown continuously, closing 2008 with 1,541 newly registered companies. This year, during the first six months, it attracted 931 companies, with 211 companies registering in June, the highest number of joiners in any month since the free zone opened in 2000, according to Oussama El Omari, CEO of RAK Free Zone Authority.
“Our target for 2009 is to have 2000 new companies. With 931 companies already registered in the first half of 2009, we are confident that we will have that,” he says.
“These positive results tell us that we have the right strategy in place to counter the current economic slowdown,” says El Omari.
“As for clients, we try to minimise the impact of the slowdown by being flexible and trying to find creative solutions so they can continue with their business.
“We help them cut cost by providing a portal where they can view the status of their application instead of travelling all the way to RAK.  We also have offices in Dubai and Abu Dhabi and internationally where they can start applying without travelling all the way to RAK or the UAE,” the official says.
To offset the effects of the economic slowdown, the free zone authority is encouraging clients to use the services of companies within the free zone instead of looking outside.
“This way they are supporting each other, which is good for business,” says El Omari.
The free zone will focus its efforts in the coming months on small and medium size businesses and entrepreneurs. 
The RAK Free Trade Zone plans to invest Dh7.3 billion on expansion and development projects over the next five years.

Satisfied with growth
“With respect to the ongoing global economic challenges, we are very satisfied with the growth rate we have achieved,” says Dr Massaad.
“The continued influx of foreign investors and the growing level of international interest in the emirate have been achieved primarily because of the proactive support of the government in terms of infrastructural development and establishing pro-investment policies,“ he says.
The official pointed out that RAK’s growth strategy also hinged on an excellent range of “economic benefits and strategic advantages” offered to all investors which made Ras Al Khaimah an “incredibly popular destination for foreign capital.”
“Moreover, while investment markets in other parts of the world have succumbed to the downturn, Ras Al Khaimah has been relatively successful in shielding its investors and the economy in general from being adversely affected, which has further improved the emirate’s reputation as a sensible, practical and strategic location for establishing a business hub,” Dr Massaad added.
One of the advantages investors can expect is in logistics. Rakia is building 186,000 sq m of ready-to-occupy warehouses, of which almost 88,000 sq m is ready for occupancy and another 60,000 sq m is under construction. About 85 per cent of the completed area has been leased out with more than 80 companies occupying the units.
Also hard to miss are some of the other incentives and advantages including 100 per cent capital and profit repatriation, easy availability of labour, easy licensing procedures, good port and transportation facilities  and the absence of foreign exchange controls, trade barriers and quotas.
The recent establishment of the Rakia Real Estate Regulatory Agency (Rera) by an Emiri Decree has created a new layer of protection for real estate investors in Ras Al Khaimah, as the agency will oversee the implementation of the escrow account law for freehold projects.