Molding the Future

RAK Ceramics realized solid growth in 2015, accounting for a 10.2% increase in annual profits at AED310.3 million. What were the key highlights of 2015?

It was our 25-year anniversary in 2015 and we have much to be proud of. Over the last 25 years we have helped to create icons, build marvels, and our products feature in some of the most iconic buildings in the world. In 2014 the board approved a Value Creation Plan (VCP) designed to streamline our business and unlock hidden value for our shareholders. In 2015 we continued implementing the VCP and have started to see positive results. We invested in our core businesses through capacity expansions for sanitaryware in the UAE and Bangladesh, by doing so strengthening our focus markets in the UAE, GCC, India, and Bangladesh.

Are there any untapped markets around the globe?

The focus markets for us are the GCC, India, and Bangladesh followed by value markets such as Europe, MENA, and Northwestern Africa. Other markets where we see opportunities are the Americas and Russia. These are important markets where we are selling but do not yet have a strong presence.

What opportunities do you see in Iran?

We invested in Iran before the sanctions were imposed and the investment was financed by the World Bank. Iran has an abundance of raw materials, energy, and manpower, and is the fourth-largest ceramics market in the world. Since the sanctions have been imposed, we have scaled down operations to adhere to the required regulations. However, we have a long-term vision for the Iranian market both domestically and as an export center once the sanctions are lifted.

How can the ceramics industry implement innovative practices and how is RAK Ceramics doing so?

From the beginning we aspired to have the best machinery, the latest technology, and produce the best products for sale in the world. During the 2008 crisis RAK Ceramics was among the least affected and we continued to invest in new technology and were the first factory in the region to introduce digital printing. This allowed us to enter many new segments at the time such as marble, stone, and different surfaces. Technology and innovation are at the heart of our philosophy and we have continuously led the way in terms of product innovation. We are now one of the largest ceramics manufacturers in the world and have evolved from being a manufacturer of functional ceramics’ products to becoming a comprehensive producer of ceramics lifestyle solutions

What mechanisms is RAK Ceramics using to mitigate the current economic and geopolitical situation in the region?

In 2015, we experienced a 10.2% growth in annual profits and in 1Q2016 we have also grown by another 10.8%. However, there is no doubt that the geopolitical conditions are not the best. As a company, we have always followed market diversification. Our strong presence in the UAE is driven by innovation, new products, reliability, and quality, and we are gaining an increase in market share over our competitors

How has RAK ceramics contributed to Ras Al Khaimah’s economic development?

We are raising the flag of the UAE all over the world. We employ 15,000 employees globally and over 8,500 of them live in Ras Al Khaimah.

What are your prospects for 2016?

In the short term we will remain focused on the VCP and will continue to exit from non-core and non-strategic assets such as contracting activities and non-profitable businesses. We have already successfully completed many initiatives and the VCP is unlocking value across the business. We will continue to focus on expanding our core businesses and streamlining operations. In particular, expanding our high-margin sanitaryware and tiles businesses in the focus markets of the UAE, India, Bangladesh, and Europe; developing improved integration across the business; streamlining our distribution networks; and unifying our brand positioning globally.