Many of the companies investing in Ras Al Khaimah (RAK) do so for the reason that they want a centre of operations from which to serve not only the United Arab Emirates but the wider Gulf Co-operation Council and Middle East, and increasingly, Africa and south Asia. It is vital to them that such a hub has the right kinds of logistic facilities.
Trade has played a major role in the development of Ras Al Khaimah for centuries – unsurprising given its position at the northern tip of the peninsula, jutting into the Strait of Hormuz – and RAK, which has the longest coastline of any of the United Arab Emirates, likes to boast it is based on the location of the medieval port of Julfar, birthplace of the navigator Ahmed bin Majid.
Bin Majid, whose fearlessness earned him the moniker of ‘Lion of the Sea’, is said to have shown early European sailors the passage from the coast of Africa to India, opening up the trade in oriental luxuries and exotic spices. He also wrote a guide to navigation that remained current in the Arab world for several decades after his death.
The Strait of Hormuz remains one of the world’s great shipping lanes – and a bridge between the Arabian and Persian worlds. Ras Al Khaimah is also just a few hours’ flight from India and Pakistan, easing the pangs of separation that must be felt by the many South Asian workers and managers employed in the emirate.
Of course, there are sensitivities in this part of the world and a number of islands in the Strait of Hormuz, including Abu Musa and the Tunbs, are not only rich in oil but are contested between Iran and the UAE. Iran’s increasing isolation, not to mention the sanctions placed on the country by a host of countries, renews the focus on commercial and trading relationships in the Gulf region – as well as that of security. RAK’s government is adamant that its maritime border security and customs services are vociferous in upholding the UAE government’s legislation regarding trade.
Today, the old dhow routes have been, if not entirely superseded, very much augmented, and RAK enjoys excellent connectivity to the Middle East and beyond.
Most visitors travel via Dubai, whose airport is about a 50-minute drive to RAK City, which is linked to the other northern emirates via two free-flowing dual carriageways, one of which follows the coast and the other in the direction of Khatt, Fujairah and Dhaid. The Emirates Road (the E311), which begins in the Jebel Ali Free Zone in Dubai and ends in RAK, is also likely to be extended to the border with Oman.
RAK does, however, possess its own international airport, which has been in operation since 1971 and regards itself as a ‘catalyst’ for the emirate’s economic expansion and boasts that it has the capacity to handle freight of any kind.
Of course, 2008 and 2009 provided challenging conditions for all aviation sectors, including freight and passenger flights. RAK airport moved almost 11,000 tonnes of cargo in 2008, down on the year before. But a dip in demand has not prevented investment in facilities at RAK International. In 2009, the airport authorities opened a new cargo terminal and say they managed to double freight capacity to 60,000 tonnes a year without increasing the environmental footprint (although the airport has recently acquired two significantly sized parcels of land to allow the airport to expand in future years and decades).
A state-of-the-art air traffic control radar system has recently been fitted, enabling air traffic controllers to identity and maintain contact with aircraft and to provide threedimensional positional information.
RAK airport enjoys a number of advantages over others in the country, including a lack of congestion and excellent pricing, positioning it as a ‘low-cost airport with competitive pricing’ – which could attract sun-seeking tourists. The Ras Al Khaimah Investment Authority (RAKIA) considers tourism to be just as important as business for putting the emirate on the map, and predicts an increase in the footfall of passengers as well as cargo tonnage. The airport’s identity bears its leisure visitors in mind as much as it does the suits and the freight.
RAK’s national carrier, RAK Airways, took to the air in 2007, but suspended operations in 2009 due to the financial crisis. It has recently announced it will be up and away before too long and, in the midterm, is anticipating footfall of 2.5 million visitors a year by 2012.
Port of call
For many businesses looking at logistics, it is RAK’s four ports that carry the greatest clout. Disproportionately over-endowed, given the size of its population, RAK is one of the major exporters of raw materials, livestock and, increasingly, manufactured goods in the UAE, and each port has its own technical strengths.
Saqr port is the largest bulk commodity port in the whole of the Middle East. Located in the Khor Khuwair industrial area, close to cement works and quarries, it exports limestone, aggregate and bulk cement. Some of the raw materials used in the ceramics industry are imported.
Typical destination locations for exports include south Asian ports such as Mumbai, but also Kuwait, Bahrain and Qatar. Despite the slowdown, or factoring this in, Saqr’s activities have grown rapidly in the past five years, handling 1497 outward- bound and 1505 inward-bound ships in 2008, almost double the equivalent figures for 2006. In 2009, Saqr handled 27.5 million tonnes of bulk and assorted cargo.
As with the airport, the port company is investing in Saqr’s future, installing new ship loaders and a mobile harbour crane, and looking closely at the potential of other, non-bulk cargos. The port currently has 12 berths with a draft of 12.2 metres. Forthcoming projects include a $900m expansion plan with a view to creating 13 berths with a draft of 15.5 metres.
RAK enjoys excellent connectivity to the Middle East and beyond
Arguably, an even more significant development is the creation of the RAK Maritime City, adjacent to the port. This new industrial park and free zone will, once completed, have a footprint of some 800 hectares and will be zoned into areas designated for retail, warehousing, general cargo handling and manufacturing, in addition to shipbuilding and repairs. Some of the plots available will give direct access to the quayside.
The RAK authorities are hoping that the provision of the right kinds of facilities will attract companies in the automotive components sector, in addition to shipbuilding and related service providers.
Saqr is the biggest port in RAK but it isn’t the only one. Al Jazeera Al Hamra port, which is mostly devoted to loading smaller and mid-sized vessels for export and which handled some 13 million tonnes of cargo in 2008, is opening a new dry dock. The port’s ambition is for about three-quarters of business to be generated by dry-dock activities and the remainder from exports of aggregates and minerals.
Further north up the coast is the Al Jeer port, a specialist livestock seaport with the capacity to import about 2 million goats per annum, mostly arriving from Iran and Somalia, and which is now looking to diversify.
Closer to the centre of RAK, Khour port is also expanding, and over the past five years has seen the construction of new warehouses and the dredging of eight-metre berths. The port mostly imports materials such as gypsum and diesel, and exports aggregate and general cargo.
The Union Railway will be seen as indicative of RAK’s desire to stay at the edge of the curve
First train on track
If there is anything missing in the UAE’s logistical make-up it has been the absence of a rail network. Up until now the road has taken the strain of goods moving up and down the coast between the UAE’s various commercial and industrial centres. But the promise of a train suggests all that is about to change – even if its benefits are still a good 10 years in the future.
The UAE government passed a bill for the creation of the Union Railway last year, after several years of feasibility study undertaken by the German state railway company Deutsche Bahn. Stretching from the Abu Dhabi in the far west to Fujairah and connected to the northern emirates (including RAK), it is estimated the Union will require about $8bn in finance and will complete by 2020.
It might be some way off but the Union Railway will be seen as indicative of RAK’s desire to stay at the edge of the curve. In an ever competitive world, logistics – the business of getting goods and materials from one place to another – is going to remain an important marketing differentiator – no less in RAK as in many other competing locations.