x Abu Dhabi, UAETuesday 25 July 2017

Doctor pulls the strings for RAK

The people of Ras al Khaimah call him "The Doctor". But Khater Massaad sees himself more as the maestro.

Dr Khater Massaad remains in constant contact with his 'generals' at the head of all the businesses he is linked to in Ras Al Khaimah
Dr Khater Massaad remains in constant contact with his 'generals' at the head of all the businesses he is linked to in Ras Al Khaimah

The people of Ras al Khaimah call him "The Doctor". But Khater Massaad sees himself more as the maestro of an orchestra that is working to put the northern emirate on the world map. Since arriving in RAK 16 years ago, Dr Massaad has become the central figure in the emirate's economic development. The credentials of the self-made man are impressive. He is the adviser to Sheikh Saud bin Saqr, Crown Prince and Deputy Ruler of RAK, and is the chief executive of the RAK Investment Authority (Rakia), the executive chairman of the developer Rakeen and the managing director of a number of companies, including RAK Airways, Al Hamra Real Estate Development and the Al Hamra Fort Hotel and Beach Resort.

Most of all, however, Dr Massaad is the man who created and developed - with support from Sheikh Saud - a jewel in the desert called RAK Ceramics, having transformed the company into the world's largest producer of ceramic tiles. Armed with a master's degree in engineering and a doctorate in geophysics from the University of Lausanne in Switzerland, Dr Massaad was in Fujairah in the late 1980s when he first met Sheikh Saud and was asked to conduct a survey on available minerals and industrial opportunities. The survey identified massive exploitable clay, which led to the idea of a ceramics plant.

RAK Ceramics was created in Nov 1989. Construction started in Feb 1990 and production began just four months later with one line manufacturing 4,000 square metres per day. Today, the company operates 11 tile factories and two sanitary-ware plants. In addition to its production in the UAE, which totals more than 220,000 square metres and 10,000 sanitary pieces per day, RAK Ceramics has five operations in Iran, Sudan, Bangladesh, China and India. Last year, it recorded a rise in profit to Dh165 million (US$45m).

"When I was a child, my father always told me: 'Don't run after money. When someone is talented and works honestly, money will run after him,'" he said. Originally from Lebanon, Dr Massaad spent most of his youth in Switzerland and has Swiss nationality. "After my father died when I was 13, I joined my elder brother in Lausanne, and did all my study there: Ecole Polytechnique and University of Lausanne. I had no money in my pocket."

The success of RAK Ceramics has won Dr Massaad a solid reputation, along with Sheikh Saud's trust. "The success of RAK Ceramics really guaranteed him people's confidence. The rest followed in a very natural way," said Frédéric Piras, the general manager of Al Hamra Real Estate Development. Other companies followed and when Sheikh Saud was officially nominated as the Crown Prince on June 14 2003, his right-hand man became his official adviser with one key mission: to represent RAK abroad and attract foreign investors. "I had been here for 16 years. I know RAK very well and I know what His Highness wants," Dr Massaad said.

"Sheikh Saud is a businessman himself. He has a master's degree in political economics from [the University of] Michigan and is a very open person. How many foreign CEOs of government investment authorities do you know?" As the head of Rakia, Dr Massaad has been marketing the authority worldwide. Founded in 2005 with two pieces of land - a three square kilometre free zone and a five square kilometre investment zone - it has recently expanded to include a 28 square kilometre industrial zone. The free zone alone boasts 1,200 companies.

"We have created international fairs, gone to exhibitions, conferences, invited people. People started to know us and take us seriously, because they see the success of RAK Ceramics. We have been able to attract approximately US$2 billion (Dh7.4bn) of investments in RAK so far. "I believe in industry. When you look at the G8 countries, they are the most industrialised countries, not the richest by resources. Industry is the key point for real development."

Rakia also created RAK Offshore, which allows people to register non-resident offshore companies as they would in Guernsey or the Cayman Islands. Another means of financing infrastructure in the emirate is access to cheap loans. "His Highness called the S&P [Standard and Poor's] agency because he wanted RAK's Government to have a rating. And they finally came with a rating of A, which is wonderful," he said.

Tourism is another source of development Dr Massaad believes in. "We have seven excellent months in this place, while a season in Greece is only three months. [There are] large beaches, the desert and beautiful mountains." Several tourism projects, backed by the creation of the emirate's own airline, RAK Airways, are in the works. According to his staff, Dr Massaad's style of management is straightforward and there is no paperwork in his office.

"I delegate everything and ask the people to do it for me. I am like a maestro with an orchestra who is playing," he said. "He implemented a very unique management system 15 years ago that enables anybody to meet him at any time," said Mr Piras. "The director of RAK Ceramics sanitary factory can be in a meeting with him and, just behind, you will see the coffee boy of another company waiting to meet him, too. Whoever needs to meet him, he will meet - sometimes three minutes, two minutes, 10 seconds - but you will have seen him and got out of his office with an answer."

Peter Schuster, the general manager of RAK Offshore, adds: "Decisions are made without delay. He says yes or no but never 'maybe' or 'wait, I need to ask'." Dr Massaad is in constant contact with the managers, or his "generals" as he calls them, of all the businesses to which he is linked. Many have been brought over from Europe, including Germany, France and, of course, Switzerland. All describe him as modest and honest. "Every month, he takes his mobile phone bill and notes his personal phone calls to pay for them from his pocket. I have never met any company manager or businessman who is doing that. And inside the group, everybody follows the example," Mr Piras said.

To outsiders, Dr Massaad's involvement in so many companies is impressive. "It is not like he is omnipotent," another RAK executive says. "He is the Prince's 'proxy'. They have been working together for over 20 years. He has a representative role in a number of governmental companies. And the model is not unusual in this part of the world. This industrial approach enables us to create a cross-vertical vision, and synergies to incubate a company and help it do its first steps."

This has worked efficiently so far, but as new entities develop, the "system" may need a second breath, an executive admits. "Having one man making decisions has advantages, but he can't take care of everything." The founder of RAK Ceramics indirectly agrees: "I believe in systems and in corporate governance, not only in people. If tomorrow I disappear, the system and the company has to continue."