Vesuvius Group Joins RAK Investment Authority Investors Portfolio
Eyeing ample opportunity in Ras Al Khaimah, the Advanced Refractory Division of Vesuvius Group has begun its three-phase US$10.5 million capital investment in the emirate with Ras Al Khaimah Investment Authority (RAKIA), the government entity responsible for attracting investments to the free zone and non-free zone facilities of its industrial parks through a complete range of solutions to local and foreign investors.
Vesuvius Group provides products, services and technologies dedicated to high temperature industrial processes. The Advanced Refractory Division, using proprietary refractory products and innovative installation techniques, reduces maintenance down time and extends service lives for its customers, in addition to providing additional benefits of reducing energy consumption and minimising process waste.
Representing the single largest investment for the European Advanced Refractory business in 2012, Phase I will have a built size of 6,450m2 and employ 52 people with an initial investment of US $7.5 million. Following completion of Phase III, the premises will occupy 12,250m2 and employ 127 people, representing a total investment of US $10.5million.
Dr. Khater Massaad, CEO of RAKIA, commented that the lucrative investment is the product of extensive growth in petrochemical, where oil revenues have enabled the Middle East to diversify their economies and strengthen their positions in a number of sectors. He is quoted as saying: “The draw of similar enterprises to RAKIA reflect trends in the region and provisions to cater to them.”
The industrial sector is one of the integral areas of diversification and this includes the aluminium, steel, cement, chemicals and plastic industries amongst others. Fuelled by significant infrastructure projects planned and underway, the construction sector is growing strong and steady in the UAE.
These projects involving key refractory consuming industries, in a market worth US$517 million are expected to grow by 60%. This represents a major market opportunity for capital projects, in addition to significant secondary sales in maintenance and on-going consumables.
Heyno Smith, President of Advanced Refractories Europe, said: “We believe that by having a local presence in the region and being able to offer high technology products and engineering solutions with fast response times we can improve our current market penetration and grow our business, and the successive industry, as a result.”
In that sentiment, Vesuvius Group found an opportune home with RAKIA with its strategic location that allows it to be well connected to destinations in Gulf countries. It is also the closest emirate to the main shipping lanes traversing the Straits of Hormuz and to all the northern markets, including the CIS countries and China. This gives prime access to transportation links for both raw material imports and potential exports to Southern Europe.
Beyond the geographic, RAKIA presents a lower cost of living, 100% repatriation on profits and capital, complete ownership in free zones, no tax on import of raw materials and machinery, no hiring restrictions, low rent options for long-term leasing, no income, sales or wealth taxes, duty free raw material imports for manufacturing, 25 year renewable lease agreements, English as accepted business language, proximity to gulf and global markets, a dedicated power plant for the industrial parks, as well as land, air and sea connectivity from Ras Al Khaimah to major markets in the Middle East and surrounding regions.
“We initially got to know the RAK investment authority through our research and visits to the region. We also attended an investment road show at the Lowry Hotel in Manchester, sponsored through the Financial Times where we were able to meet the principal personnel of the authority including Dr Khater Massad the Chief Executive Officer”, added Mr Smith.
Mr Smith concluded: “RAKIA have been extremely helpful in the incorporation phase of our investment, providing us with help on the supply of utilities (water, gas, electricity and telecoms), housing for manual workers, in addition to supplying us with contacts for local insurance requirements and personnel service companies, all of which has been invaluable.”