In the zone

Ras Al Khaimah Free Trade Zone (RAKFTZ) is attracting the attention of the Middle East logistics industry.

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By  Alex Hawkes Published  December 24, 2006

|~|rak_fz2.jpg|~||~|The overwhelming success of Dubai as a logistics hub sometimes takes the shine off the achievements of neighbouring emirates. However, determined not to be ignored, Ras Al Khaimah has announced record figures for its increasingly popular free zone, with 935 companies registering during the first three quarters of 2006 – an impressive 160% increase compared to the same period last year. These growth figures are expected to continue at full pace in 2007, especially with a specialised cargo village being constructed to improve the resources available for logistics activities. “The free zone has already established itself as a popular destination for logistics activities,” says Oussama El Omari, CEO of Ras Al Khaimah Free Trade Zone (RAKFTZ). “To continue this momentum, we are working towards increasing efficiencies for companies wanting to conduct storage and transportation activities in RAKFTZ.” First established in 2000, RAKFTZ is now home to more than 2100 companies from 70 countries across the world. It is divided into an industrial park, a business park and a technology park, which are spread out across the mountainous northern emirate. As the free zone enters its sixth year, El Omari believes that unification of the three is essential. “The parks have increased our logistics strength, as companies have many choices available. We need to make sure they are connected and interconnected to support our clients,” he says. RAKFTZ’s marketing stance has predominantly focused on the relative cheapness it offers companies wanting to operate in the UAE. The cost of registering a business in the free zone starts from only US$6700, 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 Germany, Turkey, Iran and Jordan. “By establishing ourselves as a centre of efficient and high quality logistics services, we can attract even more foreign investment. We are already working with many companies, such as international freight forwarders, to make this happen,” says El Omari. To achieve its ambitions, El Omari feels the free zone must differentiate itself from other alternatives in the Middle East region. “We don’t work ‘within the fence’, which makes us different from other free zones,” he says. “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.” The demand for space at RAKFTZ indicates customers appreciate such an outlook. It has, however, meant the level of development has needed to move quicker than expected. Not every phase of construction has yet been completed, and El Omari is more than aware of the expectation now placed on the site. The cargo village, a multi million dollar investment, is currently being built alongside the other upgrades taking place at RAK airport and this is of particular importance to the free trade zone’s logistics aspirations. “We are trying to attract a lot of airline oriented services, in terms of both commercial airline and cargo, to work along the new Ras Al Khaimah airline which is being established,” says El Omari. The first phase of construction is due to finish by the end of 2008 and will no doubt advance the logistics network. At the moment, logistics providers are mainly located in RAKFTZ’s industry park. The largest of the three parks, it is situated 15km north of the city centre, 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 cargo to be unloaded directly at their facility. The emphasis on cargo and storage is therefore strong at the RAKFTZ’s warehouse facilities. This has led to a large dominance of food industries and construction related industries at the site. Petrol and chemicals make up the rest of the customer base. Access wise, the port may have once been RAKFTZ’s major selling point, but the opening of a road from the free zone to Dubai has altered this. The Emirates Highway has almost halved commuting time as it now, dependant 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. As plans for Dubai Logistics City evolve, RAKFTZ strongly believes business is on such a scale that everybody is set to capitalise. “We don’t have any competition, we complement 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 has taken place in Dubai.” Trying to attract business from Dubai, RAKFTZ made its presence felt in the emirate last year. Targeting construction and IT exhibitions, the free zone’s stand was a strong attraction to customers at GITEX 2006 and the Big 5 show. It also used these events as a platform to launch an exclusive package of $6700 for companies wishing to set up at RAKFTZ; this was inclusive of registration fees, commercial licence, visas, membership fee of the RAK Chamber of Commerce, Industry and Agriculture and the office annual rent. As RAKFTZ continues expansion plans, which are predicted to eventually cover a huge 300 hectares, El Omari’s only concern is that demand will continue to exceed the development. “We are sold out, the demand is exceeding what we have available. We are fighting to get more warehouses and cover area for the demand,” he says. “There is so much demand and it is going to continue. In the next five years there is going to be a lot of demand, so we just have to rush quickly and establish more infrastructure, more warehouses, and more business friendly incentives,” adds El Omari.||**||

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