In many ways Ras Al Khaimah’s construction sector is the backbone of the local economy, with a number of major infrastructure projects enabling development across a range of sectors. The government is investing heavily to establish the emirate as an international destination for tourism, which is driving significant development. Indeed, the pipeline of hotels, resorts, residences, retail and commercial spaces, infrastructure and other related facilities currently being built has remained robust despite the international financial crisis, supporting significant growth in RAK’s construction sector.

The emirate is also home to several leading producers of building materials. Gulf Cement, for example, is the largest cement producer in the UAE and a major player across the wider GCC region. In addition, RAK Ceramics, which was established in 1991, has grown to become a $1bn conglomerate with a presence in 160 countries and is recognised as the world’s largest ceramics manufacturer.

Export Potential

In addition to supplying the local economy, RAK-based companies also benefit from the emirate’s location near the real estate markets in Dubai, Abu Dhabi and Oman. Moreover, RAK’s modern port facilities enhance their ability to export construction materials to international markets. These two factors should serve the emirate well as it taps into an expanding global industry.

Worldwide, the construction sector is growing at a significant rate. According to the “Global Construction 2020” report, the pace of growth of the sector will exceed that of global GDP growth in the decade up to 2020. The Middle East is a major contributor to this expansion. More specifically, market researcher RNCOS’s “UAE Construction Industry Outlook 2016” report states that, “Economic developments within the country and the infrastructure development planned will mean that the market is set to grow from its current size of $39bn at the end of 2012 by a compound rate of 9.5% a year until 2016.” While the bulk of this market is in the larger emirates, RAK is also set to benefit from this growth.


Although the number of large construction projects in the pipeline is significant, challenges remain when it comes to implementation. Securing financing for construction projects is an issue for some developers as well. The global financial crisis exposed Dubai’s heavily leveraged real estate markets and has made investors more cautious across the UAE and the broader GCC region.

Coordinating strategies and plans between the wide number of local government bodies, federal agencies and private sector players involved is also a concern. Many developers on Al Marjan Island, for example, have pointed to the timelines for putting in place basic utilities such as water and sewer systems to explain delays in completing projects. However, the current demand for hotels and residences in RAK is a positive sign that the emirate can absorb more supply (see Tourism chapter).

Regulation & Oversight

A number of government departments oversee different aspects of RAK’s construction sector. The RAK Investment Authority (RAKIA), for example, is the government’s investment vehicle for the real estate market and is backing several of the largest local developments.

RAK’s Public Works and Services Department builds, operates and maintains public facilities in the Construction & building permits issued, 2010 emirate, including roads, bridges and buildings for government-related activities. The body works with the Department of Land and the Town Planning Unit to ensure public works align with RAK’s broader development strategy.

The RAK Chamber of Commerce and Industry (RAK CCI) oversees the registration and licensing of all construction companies in RAK. These include companies registered under a RAK free trade zone licence. RAK CCI is tasked with helping strengthen the emirate’s position as a centre for trade in the region. The chamber was established in 1967 and is the secondoldest chamber of commerce in the UAE after Dubai’s.

By The Numbers

Construction and related sectors are a major contributor to GDP. According to the RAK Department of Economic Development (RAK DED), RAK’s GDP totalled almost Dh23bn ($6.26bn) at factor cost in 2010. Construction and related activities contributed Dh4.9bn ($1.33bn), or some 21.6% of total GDP. Of this, construction and building activities alone made up Dh2.3bn ($626m), representing almost 10% of the emirate’s GDP.

The RAK CCI also reports a dramatic increase in the number of new building licences issued by RAK Municipality between 2005 and 2010. The total number of licences for residential villas and standalone units rose significantly over this time. However, during the same period fewer licences were issued for industrial and commercial buildings. According to RAK CCI data, a total of 5054 building permits were issued in 2010. These included 1568 permits for villas, 745 for building extensions, and 60 permits for commercial and industrial buildings. It is likely these trends have continued since 2010 as the emirate’s growing population is driving an increase in demand for new residential properties.

The construction sector is also one of the main employers in RAK, and its share of the overall workforce has grown. The vast majority of employees are men, who constitute 83% of the sector workforce. Data from the RAK DED shows that there were 16,548 people employed in different capacities in the sector in 2010, an 8% increase over 2009.

Private Sector Participation

The RAK government and the UAE’s federal government currently finance most construction activity. The federal government generally funds roads and infrastructure, while the emirate’s government is investing heavily in tourism facilities, including hotels and related commercial real estate. As the manager of all escrow accounts for RAKIA investments, the Real Estate Regulatory Authority, established in 2009 to promote and regulate real estate development in the emirate, coordinates with property developers and contractors to manage cash flows for major projects.

However, the private sector is becoming an increasingly important actor in the sector, and in the wider economy. The RAK CCI reports that a total of 24,232 private establishments were registered with the chamber as of 2012, compared to 22,074 in 2011. Of this total, 6154 private companies were working directly in the construction sector, 2447 in real estate, and 53 in mining and quarrying in 2011.

Construction Materials 

RAK’s mountains hold significant limestone, clay and other mineral reserves, and the private sector’s most prominent role within the construction industry relates to the manufacturing and distributing of these materials.

Government investments in setting up companies to manage these reserves have been successful and there now are a number of cement producers operating locally. While the global financial crisis and the economic slowdown in the eurozone have both had a significant impact on revenues for these companies, continued demand for construction materials to build residential, commercial, and industrial projects within the UAE and the broader GCC region is likely to help firms maintain growth ahead.

Steel & Glass 

RAK’s government has helped shape the construction sector as part of a broader Registered construction-related firms, 2010-11 vision of making both the emirate and the UAE selfsufficient in the production and distribution of building materials. In line with this vision, the government has invested in setting up steel and glass manufacturing plants in the local market.

One example is Zamil Steel, a global producer of pre-engineered buildings and other steel products, which established a factory in RAK in 2007. The $46.7m factory has a capacity to produce some 52,000 tonnes of pre-engineered steel buildings each year. The factory primarily serves the RAK and UAE markets, but does export some of its product to neighbouring Gulf countries as well. It was awarded the Environmental Performance Certificate by the UAE Ministry of Environment and Water in 2012 in recognition of its efforts to comply with environmental protection standards.

Kirby Building Systems, an American company, is also active in the sector and has invested Dh100m ($27.2m) to produce high-quality pre-engineered buildings in RAK. Another contractor with a strong presence in the emirate is Amana Contracting and Steel Buildings. The company won a contract from Al Rajhi Investments to construct a plant to manufacture aluminium, glass and steel. Amana has previously completed a number of time-sensitive projects and also built the Mabani Steel project in RAK for Al Rajhi Investments.

Guardian Industries Corporation, a US company, established a $150m manufacturing centre in RAK in partnership with Saudi Arabia’s National Company for Glass Industries (Zoujaj) and the Al Zamil Group. Zoujaj has a 45% stake in the Guardian Zoujaj International Float Glass Company joint venture, registered as Guardian RAK. The plant produces 700 tonnes of glass per day and employs nearly 300 people. According to the company, the factory has generated 1000 jobs in RAK throughout its supply chain.

There are also smaller companies that have established glass-manufacturing facilities in RAK. The Al Tariq Aluminium and Glass Factory, for example, supplies local construction firms.

Manufacturing Success

RAK Ceramics is a major global manufacturer and distributer of ceramic products. The company, established by Sheikh Saud bin Saqr Al Qasimi in 1991, has grown into a billion-dollar enterprise with a presence in more than 160 countries. RAK Ceramics has an annual global output of some 117m sq metres of ceramic and porcelain tiles (see Industry chapter).

According to the company, it was the first global manufacturer of ceramic tiles that glow in the dark as well as the first manufacturer of antimicrobial tiles. Company data shows that it employs an estimated 8000 people in the UAE and another 4000 worldwide. RAK Ceramics has diversified its product base into household fixtures and tableware. The firm has set up over 40 joint ventures, including a 2003 deal with Laticrete, a global leader in the industry.

RAK Ceramics’ 2012 financial reports show that net revenue decreased by some 5.1% between 2011 and 2012, dropping from over Dh3.34bn ($909m) in 2011 to Dh3.17bn ($862m) in 2012. Net profit, however, increased 8.7% from Dh205m ($55.8m) in 2011 to Dh223m ($63.4m) in 2012.

Despite the fall in revenue, the company anticipates a positive outlook for the sector going forward, with demand increasing due to population growth, shifts in cultural practices as children choose to set up their own homes, a shortage of housing in emerging markets, and demand for construction in RAK and the broader GCC region.

Rising Demand

Real estate and construction is recovering from the slump in the aftermath of the global financial crisis. According to SHUAA Capital, an estimated $300bn worth of construction projects will be awarded across the Middle East and North Africa region in 2013, with around $20bn of this coming from projects in the UAE.

According to data from market researcher Ventures Middle East, this follows a 27% increase between 2011 and 2012. The company estimated that the total value of new construction projects in the UAE was over $15bn, with total ongoing projects worth more than $1.2trn in 2012. This figure breaks down into $871.6bn for buildings, $190.9bn for projects in the energy sector and $187.2bn for infrastructure.

It is not clear how many projects in this pipeline were pushed into 2013 due to various delays, but the scale of recent announcements is nevertheless a positive sign for the sector.

Home & Away

The market for tourism and residential facilities is driving much of this demand in RAK and across the UAE, with several billion dollars worth of projects in these segments either recently coming on-line or in the planning stages. Indeed, population growth and rising urbanisation is translating into higher demand for residential spaces in or near the city centre, which is in turn supporting the need for commercial, retail and office space.

The Mina Al Arab luxury resort community, for example, is a major development that will add a significant number of residential apartments, villas and townhouses, as well as retail and commercial space. RAK Properties, a leading real estate developer in the emirate, is responsible for building the multibilliondollar project. The company put one of the emirate’s largest-ever construction contracts out to tender back in 2008. The Dh2.5bn ($680m) contract to build 20 apartment buildings and 306 villas on the 2. 8msq-metre development was awarded to a local construction contractor.

Despite delays attributable to the economic downturn, RAK Properties has already handed over 1191 units at Mina Al Arab and its other developments in RAK and Abu Dhabi. These sales have boosted the company’s revenues and have helped position it for further developments in 2013 that will include additional units at Mina Al Arab and elsewhere.

RAK’s other major developer, Al Hamra Real Estate Development Company, is also investing in developing residential spaces. Its Dh7bn ($1.9bn) Al Hamra Village includes more than 5000 apartments, townhouses and villas, in addition to several hotels, restaurants, and golf, marina and yacht clubs. While these developments are catering to demand for luxury accommodation, there is still an unmet need for affordable housing in the emirate. Investment bank Alpen Capital points to this trend across the GCC, forecasting a shift in construction projects as the luxury segment becomes saturated.

Banking On Tourism

The construction sector has benefitted from the drive to build new hotels, resorts and related facilities, which has accompanied the emirate’s efforts to promote tourism. The government of RAK reports that the total number of hotel visitors has grown rapidly from approximately 600,000 guests in 2010 to 1.1m as of December 2012. Total hotel revenues rose by 23% between 2011 and 2012, reaching $160m in 2012, according to the RAK Tourism Development Authority. The government expects these figures to continue to increase, and the results for early 2013 seem to support this. Hotels are running at very high occupancy rates (83.39% in beach hotels and resorts for the first four months of 2013), signalling there is significant scope for further expansion going forward.

To meet this growing demand for hotel rooms and other tourism infrastructure, RAK’s government has invested Dh300m ($81.6m) to build the Bab Al Bahr resort on Al Marjan Island. The resort will feature 627 rooms, 14 restaurants and a number of other facilities. The government’s investment was one of the first construction deals put out to bid on the islands and is expected to anchor and encourage other developments and investments. Turkey’s Rixos Hotels, for example, signed a deal to manage the resort, which is expected to open in early 2014.

Other global luxury hotel chains are also seeking to establish hotels and beach resorts on Al Marjan Island. Hilton Worldwide, the Bin Majid Group and the InterContinental Hotels Group are all opening hotels there. Hilton is building a DoubleTree Resort with 484 rooms due to open in 2014. Bin Majid’s 265-room Santorini hotel and InterContinental Hotels Group’s 442-room Crowne Plaza Resort are both expected to open after 2015. Other major tourism construction projects include the Waldorf Astoria Ras Al Khaimah, which held its “soft” opening in August 2013. Construction of the 349-room hotel was estimated to cost Dh800m ($217m), according to CML International, the firm contracted to prepare a mechanical, electrical and public health analysis of the project by Al Hamra Real Estate.


Hotels and resorts are the centrepieces of RAK’s tourism strategy, but infrastructure forms the foundation for all of these efforts. A large number of construction projects are focused on upgrading local infrastructure as RAK prepares to handle a growing population and the expected influx of tourists and businesses.

To this end, RAK International Airport is finalising a major expansion strategy that will include work to increase terminal capacity, add more departure and arrival gates, deliver additional retail and commercial space, improve cargo storage and related facilities, develop an airport free zone and add hotel facilities. The expansion plans are currently at the planning stage, but the ambitious programme is expected to be a significant boost for the construcIn the meantime, however, upgrades of basic airport infrastructure are already under way. RAK International Airport signed a contract with SKA Energy, a member of the SKA group of companies, to construct a fuel storage facility in March 2013. The project is being carried out under a build, operate and manage contract with a duration of 10 years and is expected to help meet RAK’s increasing demand for aviation fuel. The airport is also constructing lounges for premiere-class passengers.

On The Road

One of the emirate’s key advantages as it continues developing and diversifying its economy is its proximity to Oman, Dubai and the rest of the UAE. A robust network of roads and bridges is therefore a critical infrastructure component that will support RAK’s growth.

The main artery into Dubai, the Sheikh Mohammed bin Zayed Road, was extended into RAK in 2005, cutting the commuting time to Dubai to around 45 minutes. The economic benefits of the link are difficult to quantify, but the road has helped catalyse a number of construction projects in the emirate. The shortened commute to Dubai has ushered in investments in tourism, for example, as hotels and resorts can leverage the proximity to Dubai’s international The government of RAK has already invested in building networks of roads that will be able to connect smaller rural towns in the emirate with the city and to its neighbours. The government announced major plans to upgrade road infrastructure with a total investment of more than Dh3bn ($816m) in 2008. Financing for the road projects came from the local government in conjunction with the UAE The proposed RAK Road Network Development Strategy has several priorities, including connecting RAK’s quarries and rural towns; improving the Sheikh Mohammed bin Zayed Road, which links the emirate with the rest of the UAE; and building a number of local highways and bridges, such as the road running from Siji to Shawkah and the RAK Coastal Road.

Ring Around Rak:

A large number of infrastructure projects are currently being developed as well. For example, in 2012 the UAE federal government announced plans to add or improve a total of 300 km of roads in the emirate. The project is being constructed in three phases, all of which are expected to be completed by the end of 2013.

A total of $108m has been allocated to construct the RAK Ring Road. The highway will bypass the city centre and connect Sheikh Mohammed bin Zayed Road to remote villages in RAK and to the emirate’s industrial areas, such as the quarries and Saqr Port. This is likely to have a significant impact on RAK’s construction materials companies, which currently face time restrictions regarding when they can send lorries from the quarries to the port as the main road goes through the city centre.

Al Rajhi Construction Company won the contract for the ring road in 2012, and is due to complete the project by 2018. The six-lane highway will connect Dubai with Umm Al Quwain, which is north of RAK, and help link all internal highways and roads within the emirate itself. The road will eventually connect with the Dh1bn ($272m) Dubai Bypass Road, now called Emirates Road, significantly reducing travel MoPW projects, 2011 times from RAK to Abu Dhabi. The government of RAK has also recently completed construction on three major bridges as part of the infrastructure improvement plans. The first is set to reduce congestion at the crossroads, where the main highway enters RAK. The second and third bridges should improve traffic flow within the city.

Improving Sea & Rail Links 

The UAE has been developing a national rail network to improve transport links within the country. Etihad Rail (formerly Union Railway) was established to oversee construction of the system. The 1200-km rail link will be completed in three phases. Phase I includes a line from Habshan to the port of Ruwais.

The company has made significant progress since 2009 and has completed the technical assessments for the network and is nearing completion of phase I of construction. Electro-Motive Diesel (EMD) won the first contract to supply seven freight locomotives; the China South Locomotive and Rolling Stock Corporation was awarded the contract to supply 240 covered wagons; and Ansaldo STS is supplying signalling, automation and telecoms systems.

Etihad Rail successfully secured a five-year loan for $1.28bn to finance phase I. The loan is syndicated by the National Bank of Abu Dhabi (NBAD), Abu Dhabi Commercial Bank, Bank of Tokyo-Mitsubishi, and HSBC Bank Middle East, with NBAD serving as a security agent. Etihad Rail received the first delivMoPW local projects by type, 2007-11 ery of rolling stock from EMD in March 2013. The company says the project is on schedule, and the first train will start running between Habshan and Ruwais as scheduled towards the end of 2013.

In 2012 Etihad Rail also put three contracts out for tender to construct phase II of the planned network. These include two construction contracts and a contract for various railway systems. Phase II covers the remaining network in Abu Dhabi with a link into Dubai and the Khalifa and Jebel Ali Ports.

Phase III will extend the network into RAK and the Northern Emirates and will link up with the proposed GCC railway network. Once it is complete, the network is expected to carry around 50m tonnes of freight and 16m passengers annually.

In addition to its connections to the UAE-wide rail network, RAK is investing in its sea-based trade networks. The emirate’s ruler launched RAK Maritime City in 2011. The development sits on over 8m sq metres of coastland and will have access to deepwater berths in the future. The RAK Maritime City free zone is expected to attract companies to set up retail, warehousing, cargo handling, and manufacturing facilities, and the zone will issue industrial, commercial and general trading licences. Companies will be able to register as either free zone establishments or free zone company entities.


RAK’s construction boom has resulted in the expansion of residential, commercial and retail space in the emirate. The government has simultaneously invested in providing basic electricity, water and sewer networks for these new facilities.

The emirate is also constructing a water desalination station to meet increasing demand from both residential users and local industry; the new plant is expected to be completed by the end of 2013 and will have a total production capacity of some 15m gallons of water per day.

Green Energy

RAK has historically faced a shortage of electricity capacity, and the government is thus constructing new generation facilities to support its economic growth. The Arab Petroleum Investment Corporation (APICORP) estimates that the UAE will invest almost $76bn in energy projects by 2017. RAK’s construction sector will likely benefit from some of these investments. Utico Middle East and Shanghai Electric, for example, signed a deal in October 2012 to construct a Dh1.5bn ($408m) power station in the emirate. The new facility will leverage Shanghai Electric’s energy-efficient carbon-capture technology to build what is being dubbed the “world’s greenest coal-fired power plant”.


Regional and global financial turmoil has had a significant impact on RAK’s construction sector. However, the fundamental factors influencing supply and demand within the local market remain broadly positive. The emirate has planned several large-scale developments that should continue to drive demand within the sector, while a number of smaller projects, including upgrades to local roads and bridges, should also help to sustain expansion.