New firms are setting up shop in Ras Al Khaimah

A factory that will turn used plastic bottles into 100 tonnes a day of fibres to be used for blankets, fleeces and car upholstery opened in Ras Al Khaimah in 2015, following a $100m investment by Asian Fibres, a company that plans to employ 600 staff at its new works.

Al Ghail

The factory was built at Al Ghail Industrial Park, the larger of two free zones operated by RAK Investment Authority (RAKIA). Al Ghail is situated to the south of RAK City and covers a total area of 23m sq metres. According to Gulf Industry Worldwide, 30% of Al Ghail’s land is currently leased to tenants, which suggests another 16.1m sq metres remains available for companies interested in investing there.

The smaller of RAKIA’s industrial free zones, Al Hamra, which is also just south of the city, covers 7m sq metres, and 96% of that land is already leased out. In late 2014 Rino Sabatino, RAKIA’s former CEO, told local media that in that year 350 new companies had leased more than 5m sq metres in its two industrial parks. The Asian Fibres site will occupy 80,000 sq metres, and the week before the company signed, Indian building materials company Everest Industries also agreed to rent a plot.

Manufacturing Centre

The two companies join more than 500 other manufacturing businesses at RAKIA free zones, which have 7000 tenants in all. One of the first manufacturing firms to build a plant at Al Ghail was India’s Ashok Leyland, with production starting in 2009. The plant has the capacity to produce more than 2000 buses and plans are set to boost this to 4500. Ashok Leyland’s manufacturing process relies on just-in-time supply of components, and has helped to create more employment beyond the confines of the free zone. “We are employing 600 of our own staff here, but indirectly we are providing work for another 400 or 500 people who are associated with us, such as just-in-time suppliers and haulage companies,” K.M. Mandanna, Ashok Leyland’s head of international assembly operations, told OBG.

Expansion

Asian Fibres will join more than 30 other firms on RAKIA’s sites that are involved in manufacturing plastic materials. There are companies using plastic to make cutlery, cups, bags, film, packaging, stuffing for mattresses and pillows, bottles, and pipes for use in construction. The raw product in the Asian Fibres process is discarded polyethylene terephthalate bottles. These are sorted, shredded and processed into polyester staple fibre, which is then spun into yarns that can be used to create a range of fabrics and products. The company was formed in 2014, but it has bold plans for development and expects to see production at its RAK plant double to 200 tonnes per day. The company also said it will be the biggest factory of its kind in the Middle East.

Further Investment

If RAKIA can continue to lease out 5m sq metres to new tenants each year, its Al Ghail and Al Hamra industrial parks will be fully let by 2020. The larger of the two industrial parks may be further away from RAK’s main population centres, but transport infrastructure is being improved to ensure this is not an impediment. To the north, the RAK ring road is due to be completed within a year, while from the south the railway is coming. Plans by engineering firm Atkins, which is overseeing the rail design, suggest Al Ghail will have its own freight terminal as part of the rail network. This should increase Al Ghail’s attractiveness, particularly for firms working with heavy commodities. Once Etihad Rail’s network is connected to the GCC’s rail network, freight will be able to reach Red Sea Ports in Saudi Arabia and Indian Ocean ports in Oman in record time, while firms at Al Ghail will continue to benefit from proximity to air and sea ports in Dubai and Abu Dhabi.