Going Cheap

Picturesque Ras Al Khaimah might not be such a sophisticated address like neighbours Dubai and Abu Dhabi. But with all costs being a fraction of what they are anywhere else, Ras Al Khaimah is attracting investment fast.

The cost of living in Ras Al Khaimah is lower than Abu Dhabi and Dubai

Everyone knows billions, maybe trillions, of dollars are floating around Dubai and Abu Dhabi, but most would be surprised to learn that Ras Al Khaimah Investment Authority (RAKIA) has brought in over AED 7.3 billion (US$Two billion) in investment since 2005.

The government body responsible for Ras Al Khaimah’s socioeconomic growth is aiming to further develop the emirate’s industrial sector, already strong from
major players like RAK Ceramics and RAK Cement.

RAKIA’s first development – Al Hamra, a 2.4 sq kilometre free zone and three sq kilometre industrial zone – is completely leased out.

RAKIA is now developing the 21 sq kilometre Al Ghail Industrial Zone, made up of 3.7 kilometres of free zone and 17.3 kilometres of industrial zone. Since its launch in January, 2007, investors have already snatched up half of the free zone and a third of the industrial zone.

Notable players include American glassware company Guardian, French tableware maker Arc International, India’s Pioneer Cement and Ashok Leyland, and RAK Global logistics.

Executive Director Serge Guillaume says he’s not surprised Al Ghail is filling up.

“The first reason that comes to mind is the cost. It is definitely cheaper to lease land with RAKIA,” he says. “The cost of living in Ras Al Khaimah is also lower than other emirates.”

Land with RAKIA sells for AED 70 US$19 per sq metre, and leases for between AED 12 and AED 15 (approximately US$4) per sq metre, and office rents are Going cheap Picturesque Ras Al Khaimah might not be such a sophisticated address like neighbours Dubai and Abu Dhabi. But with all costs being a fraction of what they are anywhere else, Ras Al Khaimah is attracting investment fast. Kathryn Semcow has the details SPECIAL about AED Nine (US$2.5) per sq metre. The electricity rate is only 18 fils (five cents US) per KWH.

“Another reason to come here is the location,” adds Guillaume, explaining that
Al Ghail is equidistant to three ports: the shallow Jazeera Port and Ras Al Khaimah port, as well as Saqr Port, which is 12.2 metres deep, with 12 berths, four container terminals, three cranes and eight bulk material handling depots.

“We are 40 kilometres to Saqr Port,” he says. “That’s not very far.”

Al Ghail is also 60 kilometres to Sharjah, 55 kilometres to Fujairah and 43 kilometres to Ras Al Khaimah International Airport.

“It actually takes less time to go from here to Dubai International Airport than to go to the airport from most of the parts of Dubai,” says Guillaume. “Despite the distance in kilometres to travel to Ras Al Khaimah from Dubai, the trip is not much in terms of time.”

RAKIA’s free zones offer 100 per cent foreign ownership and are customs-bonded, but its industrial zones require 51 per cent local sponsorship. RAKIA, says Guillaume, will sponsor selected companies in exchange for an annual fee.

“We are screening very seriously, not only for legal purposes, but also in order to select companies that fit the long term strategy of the emirate and its development.”

Ras Al Khaimah is striving for “balanced development”, he says. “We are
developing the industrial sector, but it fits into a larger view, which includes
education and research. It also takes into account the very important tourism sector, since we are by far the nicest emirate, with our mountains, lower temperatures and beautiful beaches.”

COMPETITION

 Ras Al Khaimah Free Trade Zone

Ras Al Khaimah Investment Authority (RAKIA) is up against Ras Al Khaimah Free Trade Zone (RAK FTZ) for attracting business. While RAKIA secured 21 sq kilometres in Al Ghail Industrial Park, the government has given RAK FTZ six sq kilometres of its own.

RAK FTZ has 4,500 companies registered in its projects, which include:

Business Park Located in the central business district of the city, close to the RAK Exhibition Centre, the Business Park gives investors an opportunity to start a business with furnished and ready-to-use offices, shared offices and shared desks.

Industrial Park Located approximately six kilometres from Saqr Port, the Industrial Park’s 300 hectares are developed for construction of heavy industries and warehousing.

Technology Park Covering an area of 100 hectares not far from Ras Al Khaimah International Airport, the Technology Park is devoted to light industries and automated manufacturing, as well as capital intensive quality lifestyle projects.