Rino Sabatino, CEO of Ras Al Khaimah Investment Authority (RAKIA) shares his views about the investment climate in the emirate of Ras Al Khaimah in a one to one conversation with Jinal Chheda, Robust RAK. He also shares his ideas about the developments that will encourage more investors which will generate local development benefits, creating a multiplier effect.
Q: Why and when was the Ras Al Khaimah Investment Authority (RAKIA) established?
Ras Al Khaimah Investment Authority (RAKIA) was originally founded in 2005. The idea behind the foundation was to strengthen the investment climate in the emirate of Ras Al Khaimah. Since its inception, RAKIA played a prominent role in the cycle of growth in the emirate, and in many ways, became the industrial engine of Ras Al Khaimah. Ras Al Khaimah needed a boost in its economy hence the creation of RAKIA. The company attracted a high number of investments and was involved in many developments that secured economic growth. RAKIA evolved over time, from being a multi-functional player in the development of Ras Al Khaimah, to providing a gateway for investment opportunities focusing on industrial and business development.
RAKIA had an influential impact on developing major infrastructure and commercial projects that transformed the emirate to explore its full potential. RAKIA’s investment incentives have also had a positive outcome in attracting investments and projects from foreign investors into its two Industrial Parks, Al Ghail and Al Hamra, in Ras Al Khaimah.
After seeing much success and improvement in the emirate, the company’s key role was transformed and RAKIA began to concentrate solely on reeling in regional and international businesses to Ras Al Khaimah. Attracting small, medium and large multi-national local and international corporations to its Industrial Parks, RAKIA soon became known as one of the major business destinations in the GCC.
Q: RAK Offshore is the fifth largest offshore jurisdiction in the world. What kind of services does it provide to the business community?
RAK Offshore is one of the few offshore jurisdictions accepted with major international financial institutions worldwide. It sets the bar very high in terms of internal, local, federal and international compliance yet keeping customers’ confidentiality at the core of the system.
RAK Offshore offers a combination of distinct but interconnected services and infrastructure such as the International Offshore Business Centre for non-resident entrepreneurs for investors who need an offshore location to conduct business, and outsource back office activities and the upcoming International Offshore Financial Centre for offshore financial services companies and finance professionals. RAK Offshore also benefits from one of the most comprehensive lists of non-double taxation treaties in the world, with China, India, Italy, France and Germany.
Q: Shed some light on your vision as the CEO of RAKIA?
As the CEO of RAKIA, and in line with RAKIA’s and Ras Al Khaimah’s vision, and under the leadership and support of HH Sheikh Saud bin Saqr Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah, I am determined to lead the organization to become the most preferred business destination in the Middle East region for domestic as well as international entrepreneurs and businesses.
The significant growth achieved by RAKIA in 2014 is evidence of the progress that the company is experiencing. The increased interest in foreign investments, international recognition and numerous landmark deals are contributing to our vision of becoming the preferred business destination in the Middle East.
Q: You have diversified experience in real estate development, industrial and manufacturing, banking activities and private equity transactions. What is the idea behind associating with Ras Al Khaimah Investment Authority?
I say with all humility that achieving RAKIA’s vision requires the unique skill set of an individual who can bring to the table a diverse professional background. In my case, having worked in the UAE and internationally for leading real estate, industrial and financial services companies means that I am able to build and position RAKIA focused on the long-term, along with the support of my Chairman and Board Members. I embraced the opportunity to lead RAKIA as a challenge to create an organization that is truly world-class.
Under the guidance of HH Sheikh Saud Bin Saqr Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah, RAKIA has built a formidable position over the years with its portfolio of assets and investments. My focus now is to take the organization to the next level by formulating and executing a sound corporate strategy. To this end, I lead and motivate a talented team of nearly 200 employees to achieve the company’s lofty vision, which is to be the most preferred business destination in the Middle East region for domestic as well as international entrepreneurs
Q: As a Toronto native, have you been successful to implement a ‘pull’ strategy and attract the big institutional players and other companies from Canada to set up their business in the Emirate of Ras Al Khaimah?
Business in our times is truly global. Therefore, I spend my time focusing on markets that consider the Middle East in general and the UAE in particular as attractive investment destinations. One-third of RAKIA’s investors are from the Indian subcontinent followed by another third that are from the Middle East region and then another quarter from Europe. Therefore, as it stands, the Americas region is only a small but growing investor base in RAKIA. Recently, RAKIA signed on a Canadian advanced technology assembly and manufacturing company as a tenant. So, yes, the efforts over the last year to attract Canadian companies are beginning to show concrete results.
Q:When people hear UAE, Dubai is the first thing that strikes in their mind. So, is it easy or a challenging task to attract foreign direct investment into this part of the Gulf i.e. RAK?
Dubai has transformed itself by setting the benchmark for ‘best-in-class’ in all aspects. This has influenced the UAE’s image, leading it to be one of the most attractive FDI destinations. The UAE is unique for its well-developed infrastructure, talent base, ease of doing business, and its strategic location, giving international investors easy access to many of the world’s fastest-
We are not striving to compete against Dubai; we are striving to be the leading destination for business investments in the region. Although Dubai has its unique traits, Ras Al Khaimah also has its own favourable traits in terms of setting up business as well as living standards; affordable residences, recreational activities, scenic landscapes, and 5-star hotels.
Q: Share with us your journey from Dubai to Ras Al Khaimah? Why did you leave one of the richest and focused emirate that is Dubai and join RAKIA?
Ras Al Khaimah is the Middle East’s hidden gem. RAK Ceramics, Stevin Rock, RAK Bank, Julphar Pharmaceuticals, and Gulf Cement were some of the companies that drew my attention. There is a good blend of modern and traditional features in Ras Al Khaimah. HH Sheikh Saud bin Saqr Al Qasimi’s challenge to all of Ras Al Khaimah to offer extraordinary services to prospective investors inspired me and, as such, we are focused on educating the world on the attractive prospects here in RAK.
Q: What are your strategic plans to develop RAK and RAKIA? What are the challenges that an enterprise encounters to seek stability in RAK?
RAKIA has initiated a 7-year plan with several objectives such as continuing to target SMEs, increase the Emiratisation rate, and increase business opportunities for the local community. RAKIA also plans to expand the number of warehouse units in the industrial parks and enhance the road connectivity within the parks. We have reduced the power/electricity tariff recently and are currently seeking to build a new power plant to help assist all the new development.
As part of RAKIA’s services to improve its facilities for its clients, RAKIA is currently working on an online platform to increase and ease business transactions. The user-friendly portal will allow clients to engage with each other and external parties creating an interactive marketplace. RAKIA aims to remove boundaries between professionals within the business community using this portal.
While working on the development of RAKIA, we are also playing a role in the development of Ras Al Khaimah. The developments will encourage more investors which will generate local development benefits, creating a multiplier effect.
Q: Which are the biggest manufacturing companies settled in RAK? Which sectors are you focusing on to have them establish their base in RAK?
RAKIA accommodates a variety of industries ranging from metals to automobiles to plastics to FMCG to construction materials and many more. RAKIA’s efforts have led to investments from several global corporations including Guardian Glass (USA), Arc International & SaverGlass (France), Zamil Steel (Saudi Arabia), Falcon Technologies International (UAE), SeAH Steel (South Korea), Ashok Leyland, JBF, Dabur & Mahindra Motors (India), Duscholux (Germany), Vesuvius and Ahmad Tea (UK). Furthermore, at the end of last year RAKIA added Asian Fibres LLC to its tenant list, which plans to build the single largest production facility for Regenerated Polyester Staple Fibre (RPSF) in the MENA region and India’s Everest Industries, which signed a 750,000 square feet lease in RAKIA’s Al Ghail Industrial Park.
RAKIA’s client list includes companies from over 100 countries, and neighboring countries as well as Europe have shown a strong interest in investing with RAKIA. Recently, RAKIA has been speaking to organizations from countries such as Germany, Turkey, Belgium, Nigeria, Switzerland, India, Luxemburg, Bulgaria and Eritrea on the advantages of operating out of RAKIA.
One sector with high potential for growth is the automotive sector. The market size is estimated at over 150,000 commercial vehicles in the GCC and North Africa for 2013. The market is expected to grow by 8.4% and, as of now, there are only two commercial vehicle manufacturers, Ashok Leyland (RAKIA) and Isuzu (Saudi Arabia), in the GCC and MENA region. The market size for passenger vehicles in the GCC and neighbouring countries are estimated at 2.1 million units in 2013 and is expected to grow at 8.7%. There are no passenger vehicles manufacturers currently present in the GCC region, a perfect opportunity for foreign investors.
Q: How do you think RAKIA supports the small and medium businesses to grow in Ras Al Khaimah?
SMEs are the backbone of any economy hence our focus on targeting SMEs. RAKIA accommodates a variety of industries, which opens the doors to countless market opportunities for SMEs. We offer both free zone and non-free zone facilities. The types of licences we offer includes: industrial, trading, general trading, commercial and licences for companies who offer consulting and other professional services. The relationships with our clients is valuable, so we try cater to their needs to assist them on their path to success.