Interview: Oussama El Omari, RAK Free Trade Zone

With billions of dollars being invested to develop the logistics infrastructure in Dubai, Abu Dhabi and Sharjah, it would appear a challenge for other emirates to compete for a lucrative share of the market. However, with an apparent fondness for defeating the odds, Ras Al Khaimah has successfully marketed its RAK Free Trade Zone (RAKFTZ) to a growing community of regional and international businesses over the years, with over 7000 companies now based at the industrial complex.

Even the global recession has failed to make a dent in revenue figures, which increased by 14.5% during the second quarter of 2009, compared to the same period in 2008 – an achievement that RAKFTZ’s chief executive officer Oussama El Omari credits to a flexible business model that easily adapts to market changes.

 

“The slowdown has impacted everyone in some way. We have been fortunate that despite the ongoing economic crunch, our free zone has continued to attract new business and maximize its long-term growth prospects, which shows that we have the right strategy in place to counter the slowdown,” he explains. “As for clients, we have tried to minimize the impact of this global recession by remaining flexible and trying to find creative solutions so they can continue with their business.”

First established in 2000, RAKFTZ is divided into an industrial park, business park, technology park and academy zone for universities and colleges, which are spread across the mountainous northern emirate. A variety of plots are available for those interested in basing their supply chain operations in the free zone, ranging in size from 2500 meter square to 500,000 meter square, with each tenant also benefiting from incentives such as 100% foreign ownership and tax exemption.


“As we approach our 10th anniversary in May, the free zone has achieved a lot and truly established itself as a popular destination for logistics activities,” states El Omari with a humble sense of pride. “In particular, the industrial park has increased our logistical strength, as there are several choices available for companies there. However, it’s important to continue this momentum and we are working to increase the efficiency of companies that conduct their storage and transportation activities in RAKFTZ.”

Despite its focus on the future, it was actually RAKFTZ’s past achievements that were honored at last year’s Supply Chain and Transport Awards (SCATA) in Dubai, where it received the trophy for Industrial Area of the Year. “It was a great honor to be recognized as the best in such a vast pool of resources. Receiving this award showed that our dedication and hard work are paying off. There is vast potential in this market, but there is also tight competition, so highlighting the benefits that make us different from the others is essential,” says El Omari. “For example, we don’t work ‘within the fence’. Instead of operating as a conventional free zone, the government wants RAKFTZ to distinguish itself as an investment agency. This is a new concept for a free zone and we attract customers by offering a very flexible solution.”

RAKFTZ’s marketing stance has predominantly focused on the relative cost effectiveness it offers companies wanting to operate in the UAE. The cost of registering a business in the free zone starts from only US$5000, which is a sharp contrast to the rising cost of business in Dubai. Indeed, the price advantage has attracted a great deal of interest from offshore investors, which is something RAKFTZ is determined to develop further in the future. A recent international marketing campaign already received a strong response at industry events, especially from the United States, Germany, South Africa, Lebanon, Syria and Pakistan. “By establishing ourselves as a centre of efficient and high quality logistics services, we can attract even more foreign investment,” says El Omari. “We are already working with many companies, such as international freight forwarders, to make this happen.”

At present, the vast majority of logistics service providers are based in RAKFTZ’s industrial park. The largest of the four parks, it is situated 15 km north of the city center and covers around 6 million square meters, offering direct access to Saqr Port; the first port available when entering the gulf. This gives tenants the option of building their own docking facilities for shipments to be unloaded directly at their facility. In addition, the opening of a road from the free zone to Dubai has become a major selling point. The Emirates Highway has almost halved commuting time as it now, dependent on traffic, takes just 45 minutes drive to reach Dubai. The proximity to Dubai, the logistics hub of the Middle East, has been perceived as a blessing not a curse by El Omari. As plans for Dubai Logistics City evolve, RAKFTZ strongly believes business is on such a large scale that everybody is set to capitalize.

“We don’t have any competition, we compliment each another. There is so much business out here that everybody has a big stake, you can do so many things,” enthuses El Omari. “We are expecting a lot of companies to establish themselves with us to get out of the crowds that have taken place in Dubai.”

Trying to attract business from Dubai, RAKFTZ made its presence felt in the emirate last year. Targeting logistics, construction and IT exhibitions, the free zone’s stand was a strong attraction to attendees at SITL Dubai, GITEX Technology Week and the Big 5 show. It also used these events as a platform to launch an exclusive start-up package of $5000 for companies wishing to establish a base at RAKFTZ; this was inclusive of registration fees, commercial license, visas, membership fee of the RAK Chamber of Commerce, Industry and Agriculture and the office annual rent.

As RAKFTZ continues its expansion plans, which have been valued at a staggering US$2 billion the next five years,
El Omari’s only concern is that demand will continue to exceed the development. “We are sold out. Demand is exceeding what we have available, so we just have to rush quickly and establish more infrastructure, more warehouses, and more business friendly incentives,” he says.

“Our developments include the second phase of our industrial park, in addition to container port and dry dock initiatives. Another project that will cement our position in the logistics industry is a forthcoming Aviation and MRO Park. The Middle East is projected, post recession, to remain one of the fastest growing regions in the world for both passenger revenue and cargo traffic. Therefore, a significant business opportunity exists to competitively satisfy this market, especially since Ras Al Khaimah has such a good airport.”

PROFILE: RAK FREE TRADE ZONE

RAKFTZ business incentives: 100% tax exemption, 100% foreign ownership, residence visas, competitive labor,
office and warehouse rates.

RAKFTZ Industrial Park: Caters to heavy industries sector, distribution companies and logistics providers with a variety of warehouse facilities.

RAKFTZ Business Park: Caters to the service sector and general trading with a world trade and business innovation centre and range of business center services and offices.

RAKFTZ Academy Zone: Caters to the education sector with seven universities from countries such as France, UK and India.

RAKFTZ Technology Park: Caters to the light industries and automated manufacturing projects with a combination of warehouses and office space.

Transportation links: Saqr port (the first port when entering the Gulf), RAK airport, dual carriage way links to Northern Emirates such as Khatt, Fujairah and Dhaid. Emirates Highway links to Dubai, Sharjah, Ajman, Umm Al Qawain and Ras Al Khaimah.

Companies currently operating in RAKFTZ: Straight Line Cargo Services, Dux Logistics & Marine, Eagle Maritime, Sea Crest Marine.

Forthcoming RAKFTZ developments: Container port and dry dock initiative, aviation and MRO (maintenance, repair and overhaul) park, navigator business campus.

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Adress: PO. Box 16171, Ras Al Khaimah, UAE
E-mail: ceo@oussamaelomari.com
Tel: +971 7 2041403

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