One of the most seasoned figures in the global ceramics industry, Abdallah Massaad has been leading RAK Ceramics and its various subsidiaries on a remarkable growth journey, thanks to his exceptional strategic vision and thorough understanding of regional and international markets gained from over 25 years of experience in industrial manufacturing and ceramics.
Today, RAK Ceramics is one of the largest ceramic brands in the world, with 23 state-of-the-art production plants across the UAE, India, Bangladesh, and Europe, a solid client base spanning more than 150 countries, and an annual turnover of approximately $1bn. The company has demonstrated consistently high levels of growth over the years, with its FY 2022 results showing an all-time high full-year performance, including a total revenue increase of 22.9 percent and a reported net profit increase of 19.8 percent.
In this exclusive interview, the award-winning CEO talks to CEO Middle East about his company’s impressive performance, consistent growth, and future directions.
How did the company deal with the high inflation, rising input costs, and energy challenges last year? What strategic moves were responsible for the outstanding results of FY 2022?
RAK Ceramics’ remarkable performance last year was powered by our ability to remain committed despite adverse macroeconomic conditions that affected operations and We remained committed despite adverse macroeconomic conditions that put increasing strain on operations and performance, as well as constrained top-line growth across several markets.
Our production and sales approach and brand equity, along with our efforts to maintain a strong market position in major priority markets while investing in regions that outperformed the market, enabled us to weather market instability and grow.
Our considerable operating presence in emerging regions, particularly in markets like the UAE with strong fundamentals, helped us stay resilient and grow despite mounting challenges.
We continue to closely monitor the economic environment while focusing on executing our growth strategy and delivering value to our stakeholders.
As RAK Ceramics embarks on an ambitious growth plan, will market expansion and acquisitions be two key components of the journey ahead?
RAK Ceramics’ significant organic growth across all our core markets in 2022 was primarily due to our strengthened brand positioning and the post-pandemic economic recovery.
Although macroeconomic challenges weighed on growth in markets like Europe, we were able to position ourselves as a reliable ceramic solution provider and retain our market share.
Moreover, we progressed notably on various expansionary and acquisition fronts – especially in the UAE, Bangladesh, and KSA – and are on track to achieving our expansion targets this year.
In terms of inorganic growth, we successfully completed 100 percent acquisition of KLUDI (including 49 percent of KLUDI-RAK) and achieved 92 percent ownership of RAK Porcelain. While consolidation was the theme for 2022, our present focus is on proper integration and synergies across all businesses. Our post-acquisition plan with KLUDI is progressing, and an expansionary plan for RAK Porcelain has already been launched.
What are the expansionary plans and strategic milestones achieved by the company across its core market?
We have advanced quite well across all our UAE projects and are working on obtaining the relevant clearances and approvals for greenfield projects in Saudi Arabia and Bangladesh. We have launched a value creation plan for KLUDI, focusing on the brand’s turnaround and leveraging cross-company synergies.
What are the biggest challenges for the global ceramics industry in general and RAK ceramics in particular?
High inflation, increasing interest rates, energy crisis, economic slowdown, and trade challenges are the major challenges for ceramics manufacturers globally, resulting in substantial losses in some instances and halting of operations in others. The macroeconomic environment remains volatile, putting additional burden on operations and performance while also constraining top-line growth in several markets.
How important is innovation? In what ways is the company pioneering technology adoption and best practices?
RAK Ceramics constantly strives to emphasise and encourage innovation, creativity, and design excellence, having integrated these with the company’s core ideology. Our commitment to innovation and our pioneering role in the adoption of cutting-edge technologies have enabled us to set new industry standards, strengthening our position as a global leader in manufacturing ceramic and porcelain tiles for residential, retail, and industrial use.
The wide-ranging technologies employed at our state-of-the-art manufacturing facilities include big slabs pressing technology, advanced digital printing technology for industrial decoration and effects, translucent, double and triple charged feeding systems, digital soluble salts, thermal resistant glaze, slim, anti-microbial, glow in the dark, etc. ORBIT 3Rs and Absolute Matt are the latest innovations by RAK Ceramics’ R&D laboratories.
What are the company’s sustainability initiatives?
RAK Ceramics is committed to fulfilling the ever-increasing demand for unique and sustainable ceramic products. We recently invested in several new technologies as part of our sustainability commitment, including efficient online mosaic production, environmentally-friendly processes for recovering and recycling tiles, and an advanced scanning solution.
We are also working on launching a fully-digitalised plant that will provide us with timely and reliable data on deviations without affecting productivity or quality. This facility would significantly enhance employee safety, community safety, and product quality. Our sustainable long-term investments, especially in waste utilisation and energy consumption, help us to contribute positively to our local environments.
What is RAK Ceramics’ outlook for the current year? Do you have any specific focus areas or growth strategies to overcome the various global challenges including the anticipated slow growth rates worldwide?
We have a cautiously optimistic outlook for 2023 as we build on our recent accomplishments and cement the company’s foundation, particularly following our 2022 consolidation exercise. While we recognise the significant potential for organic growth, we also understand the dynamics of the current operating environment.
Our commercial priorities are defined by protecting our market share, maintaining healthy competition, and capitalising on cross-company synergies while embracing diversification. Digital transformation and sustainability remain at the heart of our expansionary efforts.