The Ras Al-Khaimah Investment Authority (Rakia) has signed a cooperation agreement with the Middle East subsidiary of Japan’s Takenaka Corporation to set up a joint venture for a manufacturing plant for anti-rust materials.

The Japanese company’s subsidiary, Takenaka Seisakusho, specialises in anti-rusting and anti-corrosion products for hardware fasteners such as bolts and nuts used in various industries primarily construction and manufacturing.

The plant to be set up at the Ras Al-Khaimah free zone is understood to use the highest standards in precision technology.

The cooperation agreement between Rakia and Takenaka was formalised during the signing of a broader memorandum of cooperation between the UAE Economy Ministry and its Japanese counterpart to promote joint initiatives and knowledge and technology transfer on innovation and small and medium enterprises (SMEs).

The initiative is in line with the UAE’s national agenda to support the SME sector and raise the UAE’s regional and international competitiveness, a statement from the Economy Ministry, said.

The UAE is keen to increase the SME sector’s contribution to the overall GDP from the current 60 per cent to 70 per cent by 2021, according to Sultan bin Saeed al-Mansoori, UAE Minister of Economy. Innovation is seen as a key driver for the SME sector apart from being one of the key pillars identified for the country’s long-term sustainable development.

Enlisting Japan as a partner is key due to its vast experience in the SME sector, which employs approximately 80 per cent of the Japanese people.

Al-Mansoori said the UAE wants to capitalise on Japan’s leading position in advanced industries and its unique experiences in developing sectors related to innovation and scientific research.

Japan was the UAE’s sixth largest trading partner in 2015, with their total bilateral non-oil foreign trade valued at $14.7bn. Non-oil foreign trade during the first half of 2016 stood at around $7.1bn. Japan is also the fifth largest exporter to the UAE and 19th among importing countries in 2015.

Al-Mansoori also cited the importance of public-private partnerships (PPPs) between the two countries to find new ideas and explore other sectors for joint development. These sectors include renewable energy, infrastructure, construction, transportation, space and high technology, tourism, aviation, financial services, healthcare and education industries.