Peikko Group on why RAK is 'vital' to the global supply chain

Finland-headquartered Peikko Group discusses the reasons behind its entry into the UAE with CW

Supreme council member and ruler of Ras Al Khaimah, HH Sheikh Saud bin Saqr Al Qasimi inaugurated the Peikko Gulf production unit. 
[Image: ITP Images | Ajith Narendra]
Supreme council member and ruler of Ras Al Khaimah, HH Sheikh Saud bin Saqr Al Qasimi inaugurated the Peikko Gulf production unit. [Image: ITP Images | Ajith Narendra]
Peikko Group’s DELTABEAM® enables slim-floors for multi-storey buildings. [Image: ITP Images | Ajith Narendra]
Peikko Group’s DELTABEAM® enables slim-floors for multi-storey buildings. [Image: ITP Images | Ajith Narendra]

Peikko Group, which is a Finland-headquartered concrete connections and composite structures supplier recently opened its 11,500m2 new premises of the group’s Middle East subsidiary, Peikko Gulf, in Ras Al Khaimah Economic Zone’s (RAKEZ) Al Hamra Industrial Zone.

The inauguration ceremony was attended by the Supreme Council Member and Ruler of Ras Al Khaimah, HH Sheikh Saud bin Saqr Al Qasimi; the chairman of Ras Al Khaimah Economic Zone, HH Sheikh Ahmed bin Saqr Al Qasimi; Finland’s ambassador to the UAE, Marianne Nissila; chief executive officer of Peikko Group, Topi Paananen; managing director, business units; and members of the executive committee of Saudi Arabia’s Rashed Abdul Rahman Al Rashed & Sons Group, Mahmoud Ghanayem and Pekka Ettala.

Peikko Group established Peikko Gulf in 2010 in Ras Al Khaimah, offering in-house manufacturing facilities. Peikko Gulf marks the company’s first manufacturing presence in the Middle East. Paananen visited the UAE in 2006 to gauge if Peikko’s products and services were fit for the companies in the region.

In 2017, Peikko Gulf signed a land leasing agreement to increase its Middle East operations and shifted from a 2,700m2 rented facility to its independent unit covering 11,500m2 of land in the Al Hamra Industrial Zone, supported by the RAKEZ.

Speaking to Construction Week about choosing Ras Al Khaimah as the strategic location for Peikko Gulf’s operations, Paananen says: “Peikko is known to operate in small locations that offer a better quality of life and where we can target more committed people. In Ras Al Khaimah, we found a service that was flexible and straightforward. We got our first renting facility here and we also had the flexibility to expand our locations.”

RAKEZ, which hosts Peikko Gulf in Al Hamra Industrial Zone, also supports and hosts “770 manufacturing and/or industrial units, allowing the companies to operate from its zones,” HH Sheikh Ahmed bin Saqr tells Construction Week.

RAKEZ’s economic zones include Al Hamra Industrial Zone, Al Ghail Industrial Zone, RAKEZ Academic Zone, Al Hulaila Industrial Zone, RAKEZ Media Zone, and RAKEZ Business Zone.

“Having these [770] companies operate from our zones as well as manufacture and transport goods worldwide proves that Ras Al Khaimah is vital to the global supply chain,” he adds.

The expansion of bulk-handling operator Saqr Ports in the emirate, by BAM International, has been a significant step towards positioning the Ras Al Khaimah market as the ideal host for global manufacturers and traders, “allowing them a greater opportunity to strengthen their presence in the MENA region,” HH Sheikh Ahmed bin Saqr says.

In addition, companies globally can avail of attractive facilities to establish units in the emirate.

“We are blessed to be strategically located at the centre of fast-emerging markets and supported by major land, sea and air logistical hubs, making it easy for our clients to import and export,” he says.

Cost is a major consideration to ponder, especially before venturing into an unfamiliar market to set up a large-scale production facility.

HH Sheikh Ahmed bin Saqr puts any doubts to rest and says that the 11,500m2 facility has found residence in a “very cost-effective environment, allowing companies to experience cost-effectiveness on setting up, operating, and even expanding their business.”

“Nowhere else will manufacturers and traders find a premier business city that provides such cost-effectiveness,” he adds.

Peikko Gulf’s establishment in Ras Al Khaimah is evidently symbolic of the growing business ties between UAE and Finland. The upcoming Expo 2020 Dubai could potentially be a key driver of strengthened business relations between the two countries.

Speaking to Construction Week, Nissila says: “Finnish companies have shown huge interest in being part of the unique [Expo] experience. More than 100 companies will be participating in the Finnish Pavilion which is the clearest signal ever of their interest in the UAE and the Gulf region.”

“Several negotiations between companies from Finland and the UAE to establish commercial cooperation are in the pipeline. However, I am not aware of any industrial investments such as Peikko Gulf. Hopefully, Peikko’s investment will break the ice, encouraging other companies to follow suit,” she adds.

Whether Peikko Group will open production facilities in the UAE or across the Middle East is unclear. Paananen concludes: “Our focus is on Ras Al Khaimah now, rather than establishing units in other locations. Peikko’s Ras Al Khaimah unit supplies products to GCC countries such as Oman, Bahrain, Saudi Arabia, UAE, as well as non-GCC countries such as Iraq and India. As a longer-term view, given that we have some business in India, Peikko has plans of setting up a production facility there.”

PRESENCE IN SAUDI ARABIA

Peikko Group’s Middle East subsidiaries also include Al Rashed Peikko, a warehousing and sales office, which was established in 2008 in Dammam, Saudi Arabia, born out of a joint venture between Saudi Arabia-based investment, trading, and industrial conglomerate Al Rashed & Sons Group and Peikko Group Corporation.

As in the case of Peikko Gulf, Al Rashed Peikko serves Peikko’s customers in the Middle East and India.

Peikko has also displayed an enhanced focus towards the increasing employment of female workforce in the construction and engineering sectors, with the inclusion of two female engineers in Al Rashed Peikko’s warehousing team.

Speaking to Construction Week, Majd Alrebeh, technical engineer at Al Rashed Peikko, said: “Peikko was on the lookout for a female Saudi engineer. That was very interesting to me. After I applied, and consequently interviewed with them, I got hired as part of the team, and was sent to the headquarters in Finland for more than two months, where we studied the design and use of the DELTABEAM® to bring the product to the Saudi Arabia market.”

Peikko Group’s key products include its specialised composite beam DELTABEAM®, which enables slim-floors for multi-storey buildings. The product allows for fast, efficient and sustainable construction.

Furthermore, the specialised product enables flexible open space, additional room height, easy and space-saving HVAC installations, lower heating and cooling costs, and integrated fireproofing. Its other products include precast products, reinforcement systems, concrete floor products, bolted column connections, and onshore wind turbine foundations.

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