Warehouses at the enclave

Warehouses at the enclave

Business-friendly free zone advances

Ras Al Khaimah Free Trade Zone’s chief Peter Fort tells Mridula Bhattacharya the hub plans to expand its infrastructure and broaden its geographic reach

01 September 2013

Ras Al Khaimah Free Trade Zone (RAK FTZ), one of the fastest growing free zones in the UAE, has had an excellent H1 2013, achieving a 70 per cent surge in new company registrations compared to a 13 per cent increase during the same period last year.

“In the second half of the year, we are expecting a normalisation in the growth rate as we integrate and consolidate the substantial number of new clients we have registered earlier this year,” commented Peter Fort, CEO, RAK FTZ.

A record-breaking 1,994 new companies have joined the free zone, a substantial increase over the 1,170 companies registered in the same period last year. At the end of 2012, new company registrations totalled 2,297 reflecting a 13 per cent increase from the previous year.

Revenues from new company registrations have also risen 23 per cent year-on-year in the period under review.

The number of licences renewed increased from 2,298 in H1 2012 to 2,696 in H1 2013, marking a year-on-year growth of 17 per cent.

Reflecting on the results, Fort said, “We are extremely happy that RAK FTZ has achieved such exceptional growth in new company registrations in the first half of 2013. This growth reflects investor confidence from across the globe in our cost-effective free zone and business-friendly approach, and re-emphasises the world-class facilities and services we offer. Businesses are increasingly realising that RAK FTZ is less than an hour from the logistical hub of Dubai and offers the same advantages as the other free zones in the UAE. Our full commitment to quality, excellence and customer satisfaction will, as usual, be the driving force for our continued growth this year.”

The new companies registered this year include businesses from the UK, India, Turkey and Germany, among others. A broad range of industries are represented in the new registrations including consultancy, general trading, logistics and industrial manufacturing.

“We will continue to follow our growth strategy that has been successful in the past, but my goal is also to further expand our geographic reach by attracting more companies from the East and Southeast Asia. The UAE is an important player on the global stage and there is a lot of interest from businesses around the world. With our cost-competitive investment solutions supported by a fast and efficient registration process, we are able to attract an increasing number of companies from outside our historical core regions,” said the chief executive.

Large tenant base
There are over 7,000 companies currently operating at the different parks of RAK FTZ. The free zone provides a full and flexible spectrum of facilities for small and medium enterprises (SMEs) and for large businesses, and supports a broad range of industries including consultancy services, general trading, logistics and industrial manufacturing.

“SMEs currently account for approximately half of RAK FTZ revenues, but we are also seeing a growing interest in the large-scale manufacturing activities in the industrial and technology parks of the free zone. In recent times, besides raising the numbers of SME registrations and renewals, we have seen larger multinational companies operating their businesses under the RAK FTZ banner, utilising our offices, warehouses and industrial land,” Fort said.

“RAK FTZ has always had one simple goal: to be the most preferred and the most cost-effective free trade zone in the region. To accomplish this, we aim to create products that business people, whether start-ups or established companies, would want and would choose to be a part of. Our strategy this year, as it has always been, is to build on the foundation of RAK FTZ to provide the best business environment possible. Each year, since RAK FTZ was created, we have built on this foundation, and we build on success upon success with our unique business ideas, cost-effective and diverse selection of facilities, and excellent support services.

“We will accomplish our goals by employing the latest customer service technology innovations, which make conducting business with us seamless, as well as further improving client support, such as having multilingual client coordinators and promotional offices in Dubai, Abu Dhabi, India, Turkey and Germany. In addition, we negotiate agreements and packages with financial institutions and other service providers to support our clients’ growth, which for us translates into an ever-growing family of RAK FTZ companies.”

RAK FTZ offers the same highly attractive advantages as the other free zones in the UAE, including 100 per cent foreign ownership, a zero-tax regime, wide access to a qualified labour force and a stable and secure administrative environment as well as world-class facilities including offices, warehouses, industrial buildings and labour accommodation.

The Business Park at the free zone

The free zone is strategically located less than an hour away from Dubai and its clients are able to take full advantage of the logistics facilities in both Ras Al Khaimah and the broader UAE.

“However, we offer these advantages on a very cost-effective platform with a very business-friendly approach,” said Fort. “Our pricing is very competitive and the overall cost of living in Ras Al Khaimah is substantially lower than the UAE average. This is extremely important in today’s economy, as businesses face escalating cost pressures, which squeeze the bottom line. We also pride ourselves on treating our clients as business partners and do everything possible to make the registration and set-up process as fast and efficient as possible.”

Investing for growth
He further remarked, “To maintain the high levels of growth, we will require substantial investment over the coming months to expand our facilities. To cater to this ongoing demand, we are looking to expand the number of warehouses and offices by approximately 50 per cent over the next three years, which will require an investment of Dh200 ($54.4 million) to 300 million, just to support the growth that we have in the pipeline. The expansion will be funded via a combination of self-financing and possible bank lending.”

In line with its growth strategy, RAK FTZ has also launched a bevy of new client services in the H1 of the year to enhance the free zone’s already business-friendly environment. These include the re-launch of the Government e-Services Portal with more features such as the Arabic language option and easier transaction flow, the introduction of the pre-approval applications online through e-Services and providing Establishment Cards for the companies in the free zone through the RAK FTZ office, among others.

An industrial unit at RAK FTZ

RAK FTZ also successfully promoted the cost-effective value proposition for clients through various online and offline marketing initiatives. These include a number of marketing outreach activities in the UAE and GCC, participation in exhibitions and events, hosting business delegations from across the globe, and reaching out to prospective investors around the world. RAK FTZ also undertook a number of initiatives in Europe and Asia to generate awareness about the advantages of RAK FTZ as a cost-effective and business-friendly investment location for foreign investors.

Commenting on future plans, Fort said; “We are gearing up to even better serve larger businesses from around the world that are looking to set up operations in the UAE to serve the Middle East markets or the other rapidly growing nearby emerging markets in Africa and South Asia. We will apply the same flexible, cooperative and business-friendly approach to work with these potential clients to ensure that all of their needs and requirements are met, including providing them with suitable land for development.

“My goal is to ensure that when potential clients come to RAK FTZ, they feel that they are dealing with a professional service provider. That is a very important distinction, which is part of our heritage, and I aim to strengthen this distinction further.”

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