RAK: Smooth industry

The already busy glass industry in Ras Al Khaimah (RAK) is set to expand even further in 2013 with yet another overseas company setting up production facilities in the emirate. Indeed, RAK’s central location and low costs have become desirable for numerous companies looking to set up in the region.

The industrial sector is one of the pillars of the emirate’s economy, contributing around 30% of GDP in 2011, well up on the 23% at the end of last decade. While a detailed breakdown of each sector’s contribution is not available, the input of the glass sector is growing and is likely to continue to do so.

France-based Saverglass, the latest entry into the emirate’s industrial sector, announced on August 6 that it would be investing $93m to build a new production facility in RAK. The plant, which will cover 100,000 sq metres and have a staff of 180, will be located in one of the industrial zones managed by the RAK Investment Authority (RAKIA). Saverglass expects its new facility to be operational by the beginning of 2013. When at full capacity, the plant will have a production output of some 150m bottles annually.

Saverglass, which specialises in designing, producing and decorating luxury bottles and glassware, intends to use its new Middle East base to better access markets in the region, as well as in Asia and Africa. The company primarily produces coloured bottles for commercial use, in particular for wine, perfume and food products. Saverglass stated that easy access to raw materials and energy, as well as low labour and construction costs, were key to the decision to set up shop in RAK.

A number of glass producers have set up shop in the emirate in recent years. Another French firm, Arc International, a tableware manufacturer, began production in RAK in 2004, and doubled its capacity in 2011 when it commissioned a new furnace in December. Prior to the new furnace coming online, Arc’s plant was able to turn out 16,000 tonnes of opal glass and 48,000 tonnes of clear glass.

Speaking at the commissioning of its new furnace, Guillaume de Fougières, the chairman of Arc International, said being based in RAK was core to the company’s strategy of regionalisation. “We must have a local presence in growth regions in order to adapt our products to consumer usages and needs, while limiting transport costs,” he said.

This strategy seems to be bearing fruit, with the firm posting double-digit growth in sales annually, with expectations that by 2015, 50% of Arc International’s turnover will be generated in the Middle East, Asia and Africa – the markets served by its RAK facility.

Another producer is RAK Ghani Glass, which has been producing a range of items for the pharmaceuticals industry at its plant at Jazeera Al Hamra since 2010. Since beginning operations in the emirate, the company has established itself as a leader in the region, exporting to some 30 countries. A joint venture among Pakistan-based Ghani Glass, RAKIA, the Pakistani JS Group and Saudi Arabia-based Swicorp, RAK Ghani Glass has a capacity of 44,000 tonnes of glass products per year, the equivalent of 600,000 bottles.

Other players in the sector include Global Glass Solutions (GGS), a home-grown company launched in 2009 that produces glass for windows, doors, exterior coatings and internal fittings; and Guardian RAK, a partnership between US firm Guardian, the National Company for Glass Industries and the Al Zamil Group, which turns out glass products for the construction and automotive sectors.

Though some elements of the glass trade, especially those tied to the construction sector, may have seen some slowing in domestic sales following the global economic downturn, this will likely have been offset by exports to the Asian markets, which have quickly regained their momentum following the financial crisis. While there are renewed concerns over the global economy, fuelled by the European debt crisis, the stronger growth in the UAE and the rest of the region, where higher state spending is rejuvenating the construction industry, means that localised demand could replace any falls in overseas sales.