Peter Fort, the chief executive of RAK Free Trade Zone, says his focus is on getting things done on a practical level. Pawan Singh / The National
Peter Fort, the chief executive of RAK Free Trade Zone, says his focus is on getting things done on a practical level. Pawan Singh / The National

New free zone chief envisions trade stronghold in Ras Al Khaimah



What persuades a master of the universe to move to sleepy Ras Al Khaimah? In the case of Peter Fort, the newly appointed chief executive of RAK's free trade zone (FTZ), it was partly by chance, and partly a recognition that perhaps RAK is not so sleepy after all.

Mr Fort has given up the deal-doing life of an executive with the bulge-bracket investment bank Morgan Stanley to head up the FTZ, and to be the economic adviser to Sheikh Saud Bin Saqr, Ruler of Ras Al Khaimah.

"I very much enjoyed being an investment banker but wanted a new challenge. This opportunity came through a headhunter, slightly left of field. I did some research on RAK and saw lots of parallels with Dubai in 2006," he says.

There is already a platform of good infrastructure in RAK, he says, with lots of investment from the federal government and thanks to the economic policies of the ruler. "He is an extremely smart student of history, and very wise - I don't use that word lightly. He has a detailed knowledge of world affairs but is also a true businessman."

RAK has faced its fair share of challenges. The most northerly of the emirates, it lacked the dynamism of Dubai and the wealth of Abu Dhabi. Its geographical proximity to Iran, in the past one of its strengths thanks to the thriving trade across the Straits of Hormuz, has become something of a liability in the era of United States-led sanctions.

Like Dubai, RAK has only small oil and gas assets, so has had to pursue a policy of economic and industrial diversification, but with a difference. "We don't make big 'splash' investments, it's more about getting things done on a practical level."

That said, RAK's strategy is founded on four main pillars of development that look remarkably similar to Dubai's "three Ts" - trade, transport and tourism.

The latter is an important focus for Mr Fort. "We want to take advantage of the emirate's natural beauty but also make it affordable. We already have top class five-star hotels at substantially lower prices compared with Dubai, and over the next year will open a seven-star Waldorf Astoria and a Rixus hotel. It is relatively affordable luxury," he says.

The tourism initiative is focused on the Al Marjan development, an ambitious man-made island in the Arabian Gulf that has been hit by delays and uncertainty in the wake of the property crisis of 2009.

One of the centrepieces of the plan, a US$1 billion venture to develop a sporting and leisure complex in partnership with the Spanish football club Real Madrid, has been seriously delayed by funding issues.

Mr Fort declined to comment on this, but said that RAK needs "a little bit" of investment in other leisure facilities, such as hiking paths.

The second prong of the RAK strategy is to further develop the potential of the industrial companies, in the ceramics and aggregates business, that have grown up thanks to the emirate's geological advantages. These businesses have already been thriving for some time, and one of them, RAK Ceramics, is widely recognised as a leading global brand.

But the key to further growth is foreign investment, the third arm of the strategy. "This is where I come in. We want to welcome foreign investors to our free zones, with the message: 'you get the same free zone benefits and the same kind of facilities as anywhere else in the UAE, but on a far more cost effective basis.'

"I was talking to one CEO recently who told me he'd done the comparisons with Dubai and he'd be losing money if he was based there, rather than RAK."

RAK free zones are thinking in terms of "clusters" of industries, and already has what Mr Fort calls a "mini-cluster" in the specialist field of armoured car manufacture. Streit Group, the largest armoured car manufacturer in the world, employs 2,000 people in the FTZ. "The main advantages people see in RAK is the low cost and flexibility of labour," says Mr Fort.

The fourth and crucial pillar of the Fort strategy is investment and logistics. Power generation has been a problem for the emirate, but Mr Fort believes it has been solved by means of "lots of investment" by the federal power authority FEWA, and that the days of electricity black-outs are over. "That won't happen again, it's fixed," he says. He expects further investment in ports, roads and airports.

On the tricky issue of trade with Iran, he says: "We make every effort to comply with all relevant laws and regulations as applicable to the free zone."

Beyond strategic advice and planning, a significant part of his job will be to market RAK and the FTZ to the world, and he is clearly a convinced advocate.

"For the past two years RAK has had 8 per cent growth. We're better than China," he says.

Maybe not so sleepy after all.

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