RAS AL KHAIMAH, UAE — Ras al-Khaimah, the fourth-largest emirate in the United Arab Emirates, is rapidly growing into a global hub for armored vehicle manufacturing, producing more than 4,000 vehicles annually, according to figures.
The tranquil northern emirate, referred to as RAK, is home to 10 major armored vehicle manufacturers that produce tactical and non-tactical trucks and cars for the growing regional market.
According to the 2014 Markets and Markets report on global armored vehicles market, the Middle East and Asia have become the sole drivers of growth worldwide.
The report stated that the development of indigenous facilities in the UAE, Jordan and Algeria provide for the expansion of the global market into new and untapped areas such as Yemen, Somalia and Libya.
A number of factors have been involved in the growth of this new manufacturing hub in the UAE, including the recent political instability brought on by the Arab Spring in the region, said Ahmed Numan, marketing director for the Ras al-Khaimah Free Trade Zone, which hosts four of the largest manufacturers in the emirate.
“The current and recent political instability in the region in neighboring countries and associated borders has led these foreign governments to bolster their internal security capabilities in civilian defense, homeland security and border control,” he said.
“Located in a politically secure and stable environment in the UAE, [the free trade zone] provides an excellent location from which to logistically access these markets for armored vehicles. It is less than an hour’s drive from Dubai International Airport, [the zone] is also easily accessible from everywhere in the UAE, and offers an excellent site for armored vehicles manufacturing plants,” he said.
The emirate is located in the northern tip of the UAE overlooking the strategic Strait of Hormuz and the Arabian Gulf. Lacking in oil reserves, the RAK government has had a history of industrial production since 1910.
“RAK today has the highest level of industrialization in the UAE, industrial work in the emirate contributed 26 percent of our [gross domestic product] last year,” Numan said.
The local government also offers cost-effective fast track services for international businesses to establish themselves in the emirate.
“The cost of renting facilities and land for development, procuring licenses and providing housing for employees, along with other costs, can be 25 to 50 percent lower in RAK than in other emirates, allowing armored vehicles companies to maximize their profits,” Numan added.
In 2006, Canadian manufacturer Streit Group set up its 1.4 million square foot facility in RAK. In June, the company signed an agreement with RAK Free Trade Zone to more than triple the size of its facility to 4.5 million square feet.
“Streit Group Vehicles in RAK was established in early 2006, which allowed us a foray into the Middle East market, allowing us logistically support the troubled areas in the region,” the company wrote in an email to Defense News.
“As of 2012, we became the largest privately owned manufacturers of armored vehicles by size and production, [and] our production capacity has reached 380 vehicles per month,” the company wrote. “Such an expansion and leverage would not be possible in other saturated free zones around the UAE.”
The expanded lease agreement with Streit will allow the company to increase production from 1,450 units to 1,500 units per year and the expansion will include a glass factory, pre-fabrication facilities, fueling stations, a helipad and support manufacturing facilities.
Numan said RAK’s development as a global manufacturing destination arose from the vision of the leadership, Sheikh Saud bin Saqr al-Qasimi, ruler of Ras al-Khaimah, who recognized that much like Dubai, Ras al-Khaimah has limited oil and gas reserves, and therefore had to focus on other resources.
“In Ras al-Khaimah, these resources include limestone, rock and clay, which allowed for the development of the cement, ceramics, manufacturing and building industries. The leadership of this emirate looked to the resources available to them, and decided to develop the heavy manufacturing industries,” Numan said.
“The continuous issues and uncertainty in just about every other country in the Middle East and North Africa has only increased the attractiveness of the UAE and Ras al-Khaimah,” he said. “When smart investors look for a place to locate their hub and their base, most of the time they figure out that the UAE is the only credible destination for foreign-direct investment [FDI], particularly the type of FDI that free zones in RAK support.”
Speaking during the inauguration of the Streit Group facility, Sheikh Saud said: “To have the world’s largest privately-owned armored vehicle facility is an achievement for the UAE and Ras al-Khaimah.”
In addition to Streit Group, Florida-based International Armored Group (IAG) set up a facility with the production capacity of 80 to 100 vehicles per month. IAG builds and supplies armored vehicles to governments, armed forces, security consultants, contractors, non-governmental organizations and diplomatic missions.
TAG Middle East FZE, a supplier of specialized vehicle assembly and products and UAE-based Ultimate Armour Works, a manufacturer, both stated that they chose the emirate because of the cost effectiveness and logistical value.
Numan stated that for the protection of its armored vehicles industry clients, the free trade zone cannot divulge the measures and features that it has but stated that the most up-to-date technologies and tactics are employed to ensure protection of the sites.
The emirate is planning to further expand its armored vehicle production facilities.
“We are going to continue to expand the cluster of armored vehicles in [the free trade zone], the next step is supporting the cluster by bringing in related businesses such as parts manufacturers, including companies that make shock absorbers, armored glass, etc. We will bring in the rest of the value chain to support the armored vehicle assembly cluster,” Numan said.
