In an interview with Robust RAK, Abdallah Massaad, CEO of RAK Ceramics shares his successful journey at RAK Ceramics – a global hi-tech manufacturer of premium ceramics brand. He says Ras Al Khaimah’s historical DNA is in manufacturing and this sector remains at the heart of RAK’s economic growth.
Q: As a CEO of a hi-tech manufacturer ceramics, share with us your journey with RAK Ceramics?
RAK Ceramics was established in Ras Al Khaimah in 1989 by H.H. Sheikh Saud Bin Saqr Al Qasimi, member of the Supreme Council and Ruler of Ras Al Khaimah, who aspired to have the best machinery, latest technology, and to produce the best products possible for sale in the world. Ceramics were an imported product in the region at that time, but every year we have added capacity and demand continues to grow. We became a leading player in the GCC region in 2000 and from 2000 to 2004 we invested heavily, expanding the company, and exporting to almost 120 countries by 2004. We now have a strong global client base and we continued investing further in customising products to meet the needs of specific markets. We always try to produce something unique, and this has made us one of the largest players in the field. We are pioneers in many ways; we were the first company to produce antimicrobial and luminous tiles which are considered smart tiles. In 2005, we produced the largest porcelain slabs available at that time at 120x180cm, a breakthrough in the industry. We are continuing with our vision. Most recently in 2015, we launched Maximus Mega Slab, a 135x305cm large format tile and are the only factory in the region with the capability to do this.
Q: One of the most reputed brand, what are the products offered by RAK Ceramics? Do you provide any specialized high quality ceramic?
RAK Ceramics is a pioneer in introducing hi-tech innovations that are a breakthrough in the industry. A wide range of technologies are used at the our state-of-the- art plants some of which include continua+, HDD digital decoration, chroma, slim, anti-microbial, glow in the dark, double charge, roll feed and other advanced technologies.
Through its continued investment into new technologies, RAK Ceramics remains a pioneer in the industry. Recent new product launches include the imposing Maximus Mega Slab – standing at an impressive 135x305cm, produced using continua+ technology, it is the largest slab manufactured in the region. Incorporating a “super-compactor” enables pressing of ceramic powders at a pressure of 450 kg/cm2. Continua+ continuously feeds a bed of spray-dried powder and “instantly” transforms it into a firing-ready ceramic material. Using a unique “on-the-move” cutting system, slabs of any size can be produced seamlessly and effortlessly. Completing the line is a COLORA HD 1808 high definition digital decorator using 8 colour inks to produce the very latest designs.
Q: What is the annual production capacity of each product? How frequently you add new design pieces to RAK Ceramics portfolio?
RAK Ceramics is one of the largest ceramics manufacturers in the world, with an annual production capacity of 117 million square metres of tiles, 4.6 million pieces of sanitary ware, 24 million pieces of porcelain tableware and 600,000 pieces of faucets.
In ceramics we have more than 6,000 production models (tiles) and 32 design pieces (bath ware), with new designs being added every week to the portfolio.
Q: What is a success mantra behind making of RAK Ceramics being one of the largest ceramics manufacturers in the world?
When RAK Ceramics was established in 1989, its management had realised the huge potential for the company as it capitalises on the unlimited resources of Ras Al Khaimah’s white clay. Opportunities for supplying building material in the UAE and Saudi were abundant in the 1990’s and exported products were limited which helped RAK Ceramics gain leverage within the building materials industry. With high quality, a well executed sales and distribution strategy, RAK Ceramics gained a prominent position and started expanding regionally and globally. In the next few years RAK Ceramics is expecting major improvements and innovations in its corporate and production strategies. We are focusing on our “core businesses,” identified as tiles, sanitary ware, tableware and faucets, and at the same time scaling down “non-core businesses,” such as joint ventures, construction companies, and less profitable overseas expansions.
The company’s market priorities remain to be in the top three players in focus markets –GCC, India and Bangladesh, to be among the top five exporters to value markets –Europe and MENA, and to strengthen its presence in frontier markers—USA, Africa, South-East Asia and Russia.
Today RAK Ceramics is a truly global company with presence in 160 countries around the world and huge manufacturing capabilities producing up to 117 million square metres of tiles per year. Ultimately, our goal is to become a provider of holistic ceramics’ lifestyle solutions and be the most recognised brand in the world.
Q: How big is the distribution network and how strong is its presence across the globe and especially in the UAE?
RAK Ceramics’ distribution network spans 160 countries worldwide. Over 70% of our capacity is based in the UAE, where 30% is sold domestically and 70% is exported, mainly to Saudi Arabia and Europe, making the UAE our export hub. We have plans to open regional offices all over the world and we recently opened our first regional office in Singapore. The Singapore office will ensure that RAK Ceramics is strategically positioned to serve the Asia Pacific region, the fastest- growing region in the ceramic tiles market globally, both in terms of production and consumption. New opportunities continue to open up and in Iran we recently acquired the 20% minority share of RAK Iran, thereby making RAK Iran a wholly owned subsidiary of RAK Ceramics. Iran, the fourth largest tile producer country in the world after China, Brazil and India, has strong growth potential both domestically and as a platform for exports to Central Asia.
Q: What makes RAK Ceramics different and unique from others?
Ceramics has always been an essential commodity but has transformed significantly into a design-oriented product. The different uses of ceramic designs by designers, architects and developers alike have pushed ceramics to become fashionable rather than simply functional.
Additionally, advanced digital technologies, rising urbanisation and increased construction projects are considered key driving forces that have led to the development of unlimited flooring options ranging from basic aesthetics and functionality to eco-friendly, hi-tech, and designer-based ones in terms of appearance, feel, finish and touch.
At RAK Ceramics, we try to educate customers about the different types of ceramics and advise them on what best fits their needs. We also get feedback from them on what they would like to see in their houses and what inspires them. This two-way communication process and customer-focused approach helped us to grow into who we are today.
Q: How big is the manufacturing unit of RAK Ceramics? Share with us the survival story of RAK Ceramics between 2008 and 2010?
At its headquarters in Ras Al Khaimah, RAK Ceramics has 12 state-of-the-art plants (10 tiles and 2 sanitary ware) as well as plants in Bangladesh and India. We also have plants in Iran and China. The company employs around 8,000 staff at its headquarters here in RAK and around 15,000 in total worldwide.
In 2008/2009, whilst many industrial companies struggled under the pressure of the financial crisis, RAK Ceramics successfully weathered the downturn through the strength of its balance sheet and sound investment decisions. The company was not forced to lay off workforce or make any redundancies, on the contrary, RAK Ceramics continues from strength to strength as global markets recover and an increase in infrastructure investments and construction is registered globally.
Q: What do you feel about the manufacturing sector in Ras Al Khaimah?
With the early realisation that its economy would not be an oil-based one, Ras Al Khaimah shifted focus to its alternative mineral assets and the development of its industrial and manufacturing sector. From the 1960s Ras Al Khaimah rock, aggregate and cement have been used to construct ports, runways and skyscrapers throughout the Gulf region and beyond, including the Burj Khalifa.
More recently real estate and tourism have significantly grown their contribution to the economy with a number of residential, commercial and hospitality projects completed, and more planned. 2013 saw the launch of Hilton’s flagship Waldorf Astoria hotel, while Al Marjan Island and Al Hamra Real Estate offer investment and lifestyle options.
However, manufacturing remains at the heart of RAK’s economic growth. Significant international companies have chosen to make RAK their manufacturing home, from vehicle manufacturers such as Ashok Leyland and armoured specialists Streit, through to high-end glass producers such as French world leaders Saverglass. Leading the heavier end of industry is RAK Ceramics, now one of the world’s largest ceramics manufacturers. In the 1980s, under HH Sheikh Saud’s direction, Julphar (Gulf Pharmaceutical Industries), the region’s first pharmaceutical company, was formed. Today it is one of the largest pharma companies in the MENA region. Also, in 2012, Innovative Composite Engineering was established in the Industrial Free Zone to manufacture high-end composite products (aerospace, construction parts).
The emirate continues to capitalise on its existing manufacturing capabilities within RAK Free Trade Zone, which is considered the fastest growing in the region and a springboard to more economic diversification in the emirate. RAK FTZ customers come from over 100 countries and operate in more than 50 industry sectors.
Ras Al Khaimah’s historical DNA is in manufacturing and industry, and complements the different assets of Abu Dhabi and Dubai.
We feel that there is very exciting potential for continuing this trend and for more growth as the UAE’s economy continues to diversify.
Q: Share one of the cherished achievements in your tenure as CEO of RAK Ceramics?
When I joined RAK Ceramics in 2005, it was an exciting time. I was lucky to be surrounded by visionary entrepreneurs and was privileged to become part of a highly driven and ambitious team. I witnessed the development and the vast growth of the ceramics industry in general and RAK Ceramics in particular which grew from manufacturing close to 1 million m2 of tiles in 1991 to a world-wide market leader, which has supplied 1 billion m2 worldwide.
One of my proudest achievements was to be part of the team who led RAK Ceramics through the downturn and financial crisis of 2008-9 and emerge unscathed. We have managed to maintain our global operations and keep the number of employees while other businesses were downsizing and laying off workers. We have positioned the company at a very strong financial and operational level of strength and profitability, which made it so attractive to investors that in 2014, 30.6% of our shares were acquired by SAMENA Capital. That investment in RAK Ceramics’ future consolidates its reputation and allows the company to continue investing in new technologies.
Q: What message would you like to convey to the young entrepreneurs, starts-ups and SMEs?
Businesses today face many challenges. Trends rise and fall and innovation and technology continue to be key drivers in the success of any business. Here at RAK Ceramics we have seen a rise in some trends and a fall of others. RAK Ceramics has always managed to stay ahead of the game and provided its customers with cutting edge designs. I think we do need to continue our investment in innovations and new technologies. As a leader in the business, your job is always to analyse the needs of the market and the changing tastes of consumers, then provide them with appropriate products. I have learned, and continue to learn in my position, to invest in the company’s future and keep striving for more success especially in our business where competition is fierce and new developments in technology are always around the corner.
Q: Does Ras Al Khaimah have good infrastructural facilities to foster a thriving business community? What do you feel about the business community in this Emirate? How you rank RAK as a business hub in comparison to the other Emirates?
We are blessed to be based in a region that has developed at a phenomenal rate. The business infrastructure in Ras Al Khaimah itself has also grown rapidly in recent years, making it well connected to the rest of the UAE and international markets. RAK is served by five ports, amongst them the largest bulk carrier port in the Middle East. The international airport serves as a hub for low-cost carrier Air Arabia and will welcome daily direct flights from Qatar from this October. It also has a thriving cargo operation and has significant infrastructural development plans. In the near future Ras Al Khaimah will be connected to the Gulf Rail Project giving more efficient access to its regional markets.
In terms of comparison, Ras Al Khaimah is extremely competitive and flexible in terms of its free zone offerings (RAK FTZ and RAKIA), which now host over 15,000 companies. There is a keen focus on new business from China and India. From RAK Ceramics’ own perspective raw materials are delivered directly to the port in RAK City. We are uniquely positioned to sell to the entire GCC with no barriers. Each of these factors contributes to our success.
Q: How does RAK Ceramics adhere to CSR activities?
We were the first ceramics company to produce a sustainability report based on the Global Reporting Initiative (GRI) framework. As a company, we do not just produce and sell, but we contribute to society. RAK Ceramics has more than 8,000 employees locally. We are committed to doing things in a sustainable way. In tiles, we were the first to produce RAK Slim, an environmentally friendly tile, which has the same finish and features of a standard tile but consumes 50% less raw materials. We also work hard to make our manufacturing processes environmentally friendly and our factories are installed with water recycling and heat recovery systems. RAK Ceramics is a founding member of Emirates Green Building Council, which supports the development of sustainable buildings in the UAE. The UAE Ministry of Environment and Water (MoEW) awarded the company with the Environmental Performance Certificate (EPC) in recognition of its successful efforts to comply with environmental protection standards and regulations. RAK Ceramics was also honoured by the Emirates Securities and Commodities Authority (ESCA) for complying with good governance and transparency according to best international practices.
Q: Is RAK Ceramic, a technology driven company? If yes, then how?
We have always invested heavily in research, development and the latest technologies to ensure that we remain at the cutting edge of ceramics’ production in the region and to follow the UAE’s footsteps in technological innovation and diversification.
Being a technology leader means staying ahead of the curve, and to be competitive in the global marketplace, we must continue to drive innovation in our products. For us at RAK Ceramics, innovation means cutting edge design and state-of-the-art technology and we will continue to keep an open mind regarding the latest developments in ceramics. We possess a deep passion to become a lifestyle brand that is a first choice for everyone in the business. Innovation is what drives and inspires us and I believe it will ultimately help us to remain an industry leader.