RAK Ceramics eyes regional boom
In the early days, 1 million square metres of tiles rolled off the production line at RAK Ceramics each year.
More than 20 years on, the Ras Al Khaimah-based company produces 117 times as much, in addition to other items such as baths, sinks and crockery - making it officially the world's largest ceramics manufacturer.
It is currently expanding in the UAE, having just opened its seventh showroom, with more on the way.
"We have another two showrooms, one in Abu Dhabi and one in Fujairah which will be opening in the next two months so we will increase our showrooms to nine," said Abdallah Massaad, the chief executive of RAK Ceramics.
Founded in 1989 by Sheikh Saud bin Saqr, the Ruler of Ras Al Khaimah, production began two years later, long before the building boom started in the Emirates, forcing the company to look abroad for business.
It built up a large overseas clientele, which it retains today with exports to 160 countries, including the United Kingdom, where it has supplied tiles to Heathrow Airport and Wembley Stadium.
It still exports 75 per cent of its products abroad but its home market, and the countries surrounding it, are becoming increasingly more important.
In the UAE, the company initially started selling to other businesses but it has since fine-tuned its strategy to target consumers as well, rolling out showrooms in Abu Dhabi, Al Ain, Sharjah, Ajman, Dubai and Ras Al Khaimah, which is considered to be the largest in the region.The banking crisis which began in 2007 brought about another change."All the projects were on hold or stopped or cancelled, so we diverted part of our production to retail," said Mr Massaad.
"We increased our technology and expanded our product range to capture also the retail market."
Last year the US$1 billion company celebrated two milestones, selling 1 billion square metres of tiles worldwide since production started in 1991 and 50 million pieces of bathware since 1993.
The company has invested in digital printing, which allowed it to produce tiles that mimic other surfaces, including wood and marble.
"Other than tiles we produce sanitary ware and tableware. We are also a market leader in terms of tableware with production of 21 million pieces," said Mr Massaad.
About 70 per cent of production takes place in RAK, but the company also has plants in India, Bangladesh, China, Sudan and Iran.
It also aims to expand its capacity in India and Bangladesh.
"[Sales] abroad [are] handled by our distributors, where we are pushing them is to go into all segments which is retail and distribution, so for sure all our distributors are investing in showrooms," he said.
The latest to open in its home market is RAK Ceramics' second outlet in Dubai on Sheikh Zayed Road near Times Square Centre, which was set up in response to "overwhelming customer demand in the emirate", according to the company.
"With the opening of the new showroom we expect to accommodate even more customers in light of the growing demand for ceramic tiles and bathware products - a product of booming real estate and construction in the region," said Mr Massaad.
So far this year, revenue is up by 8 per cent at the company, while net profit has increased by almost 9 per cent - largely because of the building boom.
"We are in 160 countries but especially we are selling in the region, in the Gulf. We are focusing more in the Gulf and the region where the boom in construction is happening," said Mr Massaad.
Updated: May 31, 2013 04:00 AM