The Ras al-Khaimah Investment Authority (Rakia) has overhauled its strategy to concentrate purely on attracting foreign investment into the emirate.

With the appointment of Rino Sabatino as its new CEO in January this year, the authority has streamlined its focus to solely develop and promote its two industrial parks in Al-Hamra and Al-Ghail.

What Dubai and Abu Dhabi have done is put the UAE on the map. They are the benchmark. We owe them a lot

Rino Sabatino, Ras al-Khaimah Investment Authority

Previously, Rakia had actively pursued overseas investments, acquiring stakes in the Port of Poti in Georgia, mines in the Democratic Republic of Congo and power stations in India over the past 10 years.

Any of these overseas assets that remained on Rakia’s books have since been transferred back to Ras al-Khaimah’s Investment Development Organisation, an entity now charged with the emirate’s outbound investment.

“Our mandate is very clear… make Rakia the industrial engine of Ras al-Khaimah. We are concentrating on educating the world on the benefits of Rakia and attracting foreign direct investment into the emirate,” says Sabatino.

Global profile

Ras al-Khaimah is relatively unknown outside the Gulf, generally overshadowed by the larger emirates of Abu Dhabi and Dubai.

Yet the emirate is slowly beginning to boost its global profile, thanks in part to the success of its neighbours.

“What Dubai and Abu Dhabi have done is put the UAE on the map. They are the benchmark. We owe them a lot. They have put the concept of free zones here,” says Sabatino.

Ras al-Khaimah is also home to several major companies. RAK Ceramics is the world’s largest producer of ceramic products and recently attracted the eye of private equity firm Samena Capital, which has an office at Dubai International Financial Centre. In consortium with two sovereign wealth funds, Samena acquired a 30.6 per cent stake in the firm in June this year.

High rating

International ratings agencies have recognised the creditworthiness of the emirate.

In October, the US’ Standard & Poor’s revised the emirate’s outlook from negative to stable and reconfirmed its rating of A/A-1, a high rating the emirate was able to maintain even during the height of the global financial crisis of 2008-09.

Rakia’s role is to build on these success stories and attract more foreign investment.

It does this by leasing land and warehouses in its industrial parks to companies that can then develop the land as they wish.

Currently, Rakia hosts approximately 9,000 companies covering a diverse range of sectors, including glass and industrial equipment manufacturing and bus and truck production. It administers both free zone and non-free zone areas.

About 25-30 per cent of the companies are Indian firms. A further 25 per cent come from Europe, with at least half from the UK, and another 25 per cent are local GCC companies.

Gaining popularity

Sabatino aims to increase the number of licences granted to companies by 50 per cent in the next three years. 

“We are getting on people’s shortlists. People are starting to know what Rakia is,” he says.

One of the latest companies to lease land at Al-Ghail is Indian building company Everest Industries, which signed a deal in November to set up manufacturing facilities at the park.

The growing reputation of Rakia is also helping to improve the authority’s bottom line. “Our financial performance is significantly better than last year. We are about 30 per cent over last year on all major numbers,” Sabatino says.

Both of Rakia’s industrial parks were opened about a decade ago. Al-Hamra is the smaller of the two, covering 7 million square metres. It is currently 96 per cent leased.

The second, much larger park, Al-Ghail, is located further from the centre of Ras al-Khaimah and covers 23 million square metres. This park is currently 25 per cent leased.  

Al-Ghail is where most of the planned future investment will be directed and has been dubbed the jewel of Rakia or the future of Rakia, says Sabatino. In the long term, Rakia may explore building a third park, but currently the authority is focusing on its existing assets.

Infrastructure projects

Since the two parks were opened, more than AED1bn ($272m) has been invested in infrastructure, such as warehouses and electricity supply. This year alone, Rakia has earmarked more than AED100m-worth of investment in infrastructure projects to be executed at the Al-Ghail industrial park.

This investment covers three main areas: road works; lighting; and warehousing projects. These services are required to attract more companies to the park.

The authority is in the process of setting up a new tendering process for the projects and is planning to launch tenders for consultants first, followed by contractor tenders in the next few months.

Although Sabatino is wary of over-promising, he appreciates the significance of Rakia’s highly focused mandate. “Rakia has to drive the industrialisation of Ras al-Khaimah,” he says.