Economic Impact

Season 1, Ep.6: Building a successful Free Zone

Episode Summary

Welcome to Economic Impact, conversations from Emirates Development Bank (EDB), the key financial engine for economic development and industrial advancement of the UAE. In each instalment CEO Ahmed Al Naqbi speaks to change-makers and thought-leaders in the UAE to learn how they’re contributing to the nation’s economy and realising the UAE’s economic ambitions.

Episode Notes

This time we're joined by Mr. Ramy Jallad, Group Chief Executive Officer of Ras Al Khaimah Economic Zone, also known as RAKEZ.

Ramy has a wealth of  free zone experience  and now develops and drives the strategic growth of RAKEZ to create a thriving commercial and industrial business hub that attracts and welcomes investors from all around the world. 

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Episode Transcription

EI S01E06 Transcript

Speaker 1: HOST
Speaker 2: GUEST

00:00:00 INTRO V/O

“This is Economic Impact...Conversations from Emirates Development Bank”.

00:00:05 Speaker 1

A’salaam A’laikoom, welcome to Economic Impact, these are conversations with Emirates Development Bank. I'm happy to welcome today, Mr. Ramy Jallad, the chief executive officer of RAKEZ Ras Al Khaimah Free Zone.

So, Mr. Ramy, can we start by maybe talking a little bit about yourself, a little bit about your background, how, how did you end up heading RAKEZ?

00:00:30 Speaker 2

Wow. First, I'd like to thank you for inviting me and hosting me here at your beautiful offices in Dubai. It's an honor to be working with you and your bank as well. I know we have a working relationship, not only this interview, but talking about yourself is a little bit hard, so let me see in, in, in a nutshell. 

Uh, I've been a big part of my, most of my career I've been working in economic development, so I'll go as far back as working with, um…I had the privilege of working, obviously with what's called Dubai Holding today in Tecom and sort of the Media City, Internet City.

I went also and I worked with establishing the free zones and economic zones in Abu Dhabi Airport Company in Abu Dhabi as well, and then now I'm basically in the emirate, beautiful emirate of Ras Al Khaimah, working on economic development there. So, I can say that it's been an honor and privilege working in economic development of the UAE.

00:01:33 Speaker 1

That's great. That's great. So, you've been, you've been basically almost in the entire Emirates from Abu Dhabi to Dubai and then now in Ras Al Khaimah. That's fantastic.

00:01:39 Speaker 2

That's right, that's right. And setting up operating and managing free zones economic zones is my is my expertise. I am a mechanical engineer, by, by heart. So, building and doing things is really a passion of mine.

00:01:54 Speaker 1

Great. Great. Another engineer by trade is the head of the DIC, Mr. Saud Abu Shawareb. So, it seems that that's definitely a key component of what's required to build and set up a successful free zone. RAKEZ as a free zone, er, I've seen a lot of traction with RAKEZ over the last two years

00:02:12 Speaker 1

Actually, could you talk a little bit about RAKEZ, just explain to us what is RAKEZ, what are the objectives and how has that been going over the last couple of years?

00:02:21 Speaker 2

Well, thank God. I mean, this is a reflection of the UAE's economy. So, RAKEZ has really been an integral part of the UAE and the overall strategy of our leadership in terms of developing economic hubs and encouraging more and more trade and encouraging more and more manufacturing supporting SME's in terms of contributing to the economy and growing the overall GDP of the country and, of course, the Emirate of Ras Al Khaimah.

RAKEZ was set up precisely for that.

RAKEZ is the super-powerhouse, I would say, of Ras Al Khaimah in terms of free zones, economic zones we contribute to more than 30 per cent of the GDP of the Emirate of Ras Al Khaimah in terms of manufacturing, in terms of supporting SME's in terms of setting up, setting up ecosystems and the industrial zones, the business parks, the economic parks that actually where a lot of investors from the UAE and from all over the world come to set up and operate in Ras Al Khaimah as well as do their trade and conduct their business globally.

00:03:29 Speaker 1

Wow, and how old is RAKEZ? When was it originally set up? I'm sure it must have been some, some many years ago, but I think recently there's been more activity around but how long ago was it originally set up?

00:03:38 Speaker 2

Well, it all started out, we used to have two economic zones in Ras Al Khaimah. One was called RAKIA, the Ras Al Khaimah Investment authority. And then there was one called RAK FTZ which was the Free Trade Zone Authority.  

00:03:52 Speaker 1

OK.  

00:03:52 Speaker 2

And you know, we wanted to really focus on no cannibalization, basically, we wanted to focus, give an extreme laser focus to customer sentiment.

So, we combined the two in April 2017 and it became RAKEZ which is today the both the economic zone, which means the free zone and non-free zone aspects of the business…

00:04:16 Speaker 1

Right.

00:04:16 Speaker 2

So, we manage and we create the ecosystem and the services that we give to our clients in free zones and non-free zones as well.

00:04:23 Speaker 1

And some of those services I know are quite innovative. Do you wanna touch on how is it that RAKEZ was about really attracting businesses in an innovative way. What is the different things that you do in RAKEZ to differentiate RAKEZ from other industrial zones or free zones?

00:04:42 Speaker 2

Well, I think you know when you go back to business, we try to keep it simple. But simple is not necessarily an easy thing to do.

One of the most important things that I find in terms of creating a service culture and you know, creating an economic zone, is to listen to the needs and the requirements of who your customers are. What do they want, how what tools and services do they need to grow?

What are their expectations? What's their business like? Because you've got to really know how it clicks. You've got to know all the way from what a media company is to a manufacturing company to a hi-tech company, to an IT company because while a lot of them require the same things when they run their business, they do need specialized services which we call value-added services.

So, going back to that, we listened to our customers.

We listen to the sentiments.We constantly engage with the industry itself so that we can create the right ecosystem, the right level of services and that's what really allows us to attract more investors, and more companies, to come and set up in RAKEZ.

That's one of the areas. Another thing is that the fact that Ras Al Khaimah is always, one of its objectives is to be the right destination, which has a lot of cost optimization.

We're very cost effective. We try to keep the overall costs for the investor, for our clients as optimized as possible, and that doesn't mean only our service fees, it means the entire livability, it means living in Ras Al Khaimah.

It means dealing with other government entities. It means transportation.

All the way from residential component to liveability. And then business operations.

And then lastly, a very strong pillar of ours is really we pride ourselves on customer service, customer-centricity, the experience that our customers have. Every year you see a new kind of trend…

...every year you see different kinds of customers and what they require in terms of service. So, we need to keep our fingers on the pulse in terms of what is the service levels and what are our customers expecting and that's what we really strive to do to really make sure that our customers focus on plug and play and really thrive.

00:07:11 Speaker 1

Right, right. And you touch on liveability and I think that that's one of the most underrated aspects of the UAE in the sense of businesses that come set up here. I don't think we always touch on, you know, ease of doing business.

We always touch on the business-friendly environment that we have in the UAE, the fantastic infrastructure that's here in the UAE. But I think liveability is definitely a key component.

As to why so many businesses want to set up in the UAE and everybody always knows, you know, Abu Dhabi and Dubai and how fantastic it is to live there. But the rest of the Emirates, including Sharjah, Ajman, Ras Al Khaimah, Fujairah are fantastic places to live, Ajman as well, and I think Ras Al Khaimah has made huge strides from what I've seen over the last few years and really making different developments, really setting up the environment for businesses to come set up.

Keeping in mind that these business owners are going to have families, the people working these businesses are going to also be living there. So, that's definitely an interesting and I think very important aspect to shed when it comes to economic development.

00:08:19 Speaker 2

Umm, the UAE is a magnet and the investment in liveability has been happening over the years. Ras Al Khaimah has been investing heavily in terms of uplifting the livability to keep in line with all the investment that's coming in. We are always known as a touristic destination for resorts, beach resorts.

People love to live there. We have the outdoor sports, we've got the mountains, we've got the zipline, we've got adventure sports, but liveability is, as you said, not a lot of people think about, you know, that when they're deciding where they want to go, I think COVID taught us a lot of stuff and the world saw that the UAE handled COVID in a beautiful, in a best in class way.

It should put us even more so on the global map in terms of liveability, in terms of the way people live, the way things are managed, the availability of different options in terms of residential, all the way from beautiful places to live on the beach.

In the city, so you get a flavor that suits everybody. But, I think when the business investor thinks about it nowadays and I see a lot of companies really caring about how their staff live how they work together, play together, live together. And which makes them a lot happier and makes the business run a lot smoother,  

00:09:52 Speaker 1

Right? And much more successful.

00:09:54 Speaker 2

Much more successful. Many companies visions and guiding principles care about their, their staff and their employees and their mental health all the way to their physical health and their liveability.

So, these are things that we really need to invest in more and more to really know about it and what we've been doing in Ras Al Khaimah with bringing in different types of apartments, residential units, more resorts.

We have so many hotels and I think we're in the process of building another 9,000 hotel keys over the next few years. We're redesigning the city. My colleagues in the real estate development really have liveability as a top priority in their agenda.

00:10:39 Speaker 1

Absolutely. And I'm sure that is a strong driver of attracting talent and ensuring that talent stays and, of course, is a key driving towards a success factor of those companies and those businesses that set up in RAKEZ...

00:10:50

Yeah, yeah.

00:10:52 Speaker 1

...as a free zone, industrial zone, is a player in a in a larger ecosystem, a key player, but in a larger ecosystem in Ras Al Khaimah, but also across the UAE.

00:11:02 Speaker 2

Yeah.  

00:11:03 Speaker 1

How, how do you see RAKEZ in the sense of the partnerships that it has, how has that evolved over the last 3-4 years. I've personally seen an evolution in the ecosystem where partners across, you know, government to, to private sector are all working hand in hand really towards this economic drive that we have in the country. But how do you see it from your perspective with RAKEZ and Ras Al Khaimah?

00:11:33 Speaker 2

You know, we can't. We're, we're, we  are not an island on our own. Definitely partnerships are crucial to everybody's success. I think we have the best partners that one can ever ask for in terms of all the way from our government, federal authorities such as the Ministry of Economy, the Ministry of Industry and Advanced Technology.

All of the federal government agencies, such as the customs authorities, the immigration, the the, all of that, we all work together very closely with the same objective and the same passion and drive to make sure that this the UAE is the number one destination for investment in businesses to thrive.

And that's just one aspect of the UAE. So, over the years, RAKEZ has been engaging with them, all of our government entities to adopt and to contribute to some of the pillars that we're working on, such as ‘Make in the UAE’ with the Ministry of Industry and Advanced Technology bringing in more manufacturers in the hi-tech space.

Next Gen. FDI in terms of the IT space we're working with you as Emirates Development Bank, which has really been a key strength to FDI attraction, I mean when investors who want to get into manufacturing have financing capability and options such as working with your bank and Development Bank, Emirates Development Bank and and offering that options to investors, it really strengthens the sentiment for investors that want to come in from outside and the local investors as well who want to expand their businesses.

Expansion is a key component of what we're doing in RAKEZ…we've got more than 900 manufacturers from burrata cheese all the way to automotive components.  

00:13:29 Speaker 1

Interesting.

00:13:29 Speaker 2

So, they expand, markets are expanding. Everybody needs a financial bit of support. So, working with strong banks supported by the government is crucial to our success as well.

And that's how we participate. And not only that, I think we also work. We have dedicated resource that works with our multipliers, our embassies, our commercial attaches from different countries.

In terms of strengthening our relationship and, and exposing our brand and our services globally and worldwide.

00:13:58 Speaker 1

Fantastic. You touched on a few of the companies that have set up in RAKEZ and some of those sectors. What are you seeing in the sense of the sectors that are really being set up currently in RAKEZ and in the UAE in general?

00:14:15 Speaker 2

Uhm, again uh, we all lived through COVID. I think. Uh, that really was a major catalyst and a kickstarter for uh, uh, the life sciences and putting that on the priority all the way and also lifestyle goods. So, I see a lot of e-commerce as well has mushroomed and really exponentially grown in the country.

And it's not only just talking about e-commerce, it's talking about the entire value chain and supply chain that comes with it, from logistics to last mile delivery to warehouseing, um, F&B is growing in a very rapid way.

00:14:58 Speaker 1

And food security? Definitely.

00:14:59 Speaker 2

Food security’s on the agenda, as you may, as you rightly said, so F&B, consumer goods…all of those sectors then that sectors that support those sectors are like packaging, industrial equipment, storage, we've got a big automotive cluster, a big chemical cluster.

We have clusters from about nearly fifty different types of industrial clusters that exist in rockets, let alone the SME's and the supply chain and the value chain and the vendors and the suppliers who who revolve around all of those industries to really conduct trade and trade with other Emirates you know, myself, my colleagues, and other free zones and economic zones around the Emirates always collaborate and communicate.

If something doesn't really fit well in one emirate or another, we talk to each other to send them clients, to send them other types of businesses that would better fit in one place or another to really create that marketplace in the UAE.

00:16:05 Speaker 1

Right, right.

00:16:07 Speaker 1

That being said, I'm sure just like with any progression and evolution, there's challenges that that we face.

There was the challenges that you obviously mentioned during COVID, which were handled beautifully and I think the UAE definitely was one of the countries in the world that gained momentum post-COVID.

As RAKEZ, what have you seen with regards to the challenges, whether it's to attract businesses or for the businesses to set up in the country and what are you doing in order to tackle those challenges?

00:16:37 Speaker 2

Uhm, I think the challenges sometimes are good things to have because it actually puts you in a, on a drive and momentum to really mitigate those challenges and put in those solutions.

Maybe it's a good challenge to have, but we're not building fast enough.

00:16:57 Speaker 1

Right?

00:16:57 Speaker 2

You know, that's a good challenge to have, but you know the…

00:17:00 Speaker 1

Right, right. So, a lot of demand…

00:17:01 Speaker 2

A lot of demand…

00:17:03 Speaker 1

And you need to meet the time to get that done.

00:17:05 Speaker 2

Time frames, demand to build our industrial zones. Many of the vertical real estate assets such as warehousing built-to-suit commercial offices. We, we forecast and definitely this is something but I think we, that's a challenge that we are dealing with a lot and that's really as a result of a good thing to have high demand...

00:17:28 Speaker 1

Right.

00:17:28 Speaker 2

...and right showing really the resilience and the strength of the economy.

00:17:32 Speaker 1

Right.

00:17:33 Speaker 2

Again, in line the, it's not only the economic zones that need to build facilities for their customers, but what comes in is the liveability aspect. What comes in as the we're, for example, you know when you have an industrial zone and when you're attracting companies, whether they're mega-corporates or, or industrial companies, they have employees, they have staff, they have children, they need schools, they need medical facilities. 

So, all of that is really great for us and what we're building and what we're doing right now as we speak, we have a lot of development programs we're building where new 40,000 square metres of warehousing.

00:18:13 Speaker 2

We sold out last year on the our last 40,000 square metres of warehousing. We're building a blue-collar accommodation to satisfy all of the development and all of the workers that come, state-of-the-art sustainable facilities we are building, we're adding another five million square metres of industrial land right now, as we speak to cater to our manufacturing companies that come to build their own facilities, and we're building new business centers. We're building new commercial office space. So, you can see that that's really a big part of my day job…

00:18:53 Speaker 1

Right, right

00:18:53 Speaker 2

...to make sure that these really these assets are developed on time...

00:18:57 Speaker 1

Of course.

00:18:57 Speaker 2

...in the best way, sustainable.

And other challenges, I think is that, you know, I would say it was an older challenge where we've learned how to promote our brand. 

But it's not only the brand that we're promoting. We have to promote what services, facilities, value added services and what the brand delivers and its, and its brand promise to our clients. So, we're getting a lot better at that in terms of promoting the UAE, Ras Al Khaimah globally, internationally and during COVID, we had to shrink that because we couldn't travel as much. But now we're back into fifth gear and it's all positive and uphill for us.

00:19:52 Speaker 1

That's great. That's great. You touched on sustainability and this being the year of sustainability for the Country, COP 28 being hosted here in the UAE, renewables is obviously on everybody's mind, tip of the tongue.

What is RAKEZ doing in order to support and move in the direction of sustainability and maybe some initiatives that are happening alongside COP 28? How's RAKEZ positioning itself and, and what initiatives are being put forth to be in line with the year sustainability?

00:20:26 Speaker 2

COP 28 Sustainability is on top on our agenda. Our leadership have advised that this is a key strategic focus for us and Ras Al Khaimah in line with the rest of the UAE.

Actually, it’s so funny I was just in a meeting before I came here on COP 28 and our participation. RAKEZ has many companies, many manufacturers who are working to top standards, international standards in terms of their sustainability programs within their manufacturing processes or within their businesses.

Us, ourselves are looking at how we build our ecosystem with all sustainable materials. So, we've got our Barjeel program by the Ras Al Khaimah Municipality that encourages real estate development with sustainable material.

So, RAKEZ a leader in terms of energy efficiency in terms of the government entities as well. We started out by a pilot program where we're saving more than four or five million dirhams a year in electricity bills and are using the sustainable and renewables that we are putting in terms of energy and water efficiency.

We're, we're, we are, encouraging… we're we've got a working committee for COP 28 that's looking into even how our schools and universities will participate in sustainability.

We have recycling programs all across our industrial zones which are led by our public works department that recycles all of the materials that goes back into our whether it is a power generation, we've got our companies now with our HSE programs putting in more measures for how our manufacturers reuse their goods and we give incentive programs as well for companies that can prove and show what are their sustainability drives in their line of business.

We have obviously the energy efficiency, we are focusing also on attracting new FDI that is really in that space, whether it's EV, whether it is solar, whether it is solar power storage.

And also allowing our customers to put in alternative energy sources rather than just power generation from electricity through solar on their own facilities, so there are many initiatives that we've, we've we're involved in.

00:23:07 Speaker 1

So, the companies now are capable of installing solar onto their factories or onto their…

00:23:12 Speaker 2

Some of them do, yes they are, if they want to use it for their own use.

And many of them have opted. Obviously the new ones. We have some companies that are doing for example computer recycling, right, one of the largest companies in the world that brings in computers, laptops from all over the world, recycles them and gives them to NGO's. It's an English company from the UK. They're using a lot of solar panels to generate that power requirement that they need in their in their factories.

00:23:41 Speaker 1

Fantastic.  

00:23:42 Speaker 1

Yeah.

00:23:42 Speaker 1

Fantastic.

00:23:44 Speaker 1

Thank you so much, Mr. Ramy Jallad for joining us today. Thank you for joining Economic Impact, conversations with their Development Bank.

00:23:50 Speaker 2

Thank you. Thank you. It's been a really a pleasure to be here and thank you for allowing me to give you a little snippet of what we do in Ras Al Khaimah and with RAKEZ.

00:23:58 Speaker 1

Pleasure to have you. Thank you so much.

00:23:59 Speaker 1

Thank you. 

00:24:00 OUTRO V/O

“Economic Impact. Conversations from Emirates Development Bank”.