Rani Investment ventures into luxury tourism via Africa

The Dubai company, which already owns properties in Mozambique and Zimbabwe, hopes to blaze trailes in the luxury tourism sector.

Matemo Island chalet resort. Rani Resorts

Rani Investment has set its sights on Africa's luxury tourism industry as it looks to blaze trails in to the sector, which is still relatively undeveloped in the continent.

The company is based in Dubai and owned by the Saudi businessman Sheikh Adel Aujan. It already has five resorts in Mozambique as well as a game reserve and hotel in Zimbabwe and is considering expanding in to Zambia. In addition, it is studying other opportunities in the two African countries in which it already has a presence, said Dr Kamel Abdallah, the chief executive.

"Africa in a way is the last frontier," he said. "We can call it a pre-emerging market. It has the potential to grow exponentially in a very big way."

Dr Abdallah said Rani was the largest investor in Mozambique's hospitality industry. Its flagship property there is the Indigo Bay Island Resort and Spa.

The company is also planning to develop a US$100 million (Dh367.2m) resort on an island in Mozambique known as Paradise Island. But that project has been slowed by the global economic crisis and a downturn in tourism that hit Rani's resorts.

There are a number of challenges that come with investing in Africa, Dr Abdallah said.

"We are not there to make profits overnight. We have, of course, a healthy tolerance for risk. In Africa, you need to have a healthy tolerance for risk because you do have some political instability from time to time and you do have a challenging economic environment."

He said Rani also viewed its role in Africa as part of its corporate social responsibility and was trying to employ locals rather than expatriates.

Another major challenge was the fact that the company had to put in its own infrastructure including airstrips, generators and water treatment facilities for its properties.

"It's a commitment to do it in the right way and to live with the challenges. With all these risks there is high return, which we know we will get, so it's still economically rewarding," Dr Abdallah said.

"Africa is rich. Zimbabwe is very rich. Mozambique is very rich. They are rich in natural resources and mineral resources."

Rani also has a stake in the River Ranch diamond mine in Zimbabwe. But Dr Abdallah said the company was not focusing on expansion in the mining sector, although it had claims under consideration for other mines.

"Our investment in the mining sector to this day has been very limited. It has been as a result of our decision to stay in Zimbabwe while many others were leaving. But our focus in Africa is on the tourism sector and not the mineral resources."

He explained that many investors pulled out of Zimbabwe because of its political and economic instability.

"But we decided to stay. We are there for the long term. Now Zimbabwe is recovering. Our occupancy shows that people are returning."

Sheikh Adel's Aujan Industries, which is also part of Aujan Group under the Rani umbrella, manufactures drinks under brands including Vimto.

Other companies, including Dubai World, also had a number of projects planned for several African countries but many were later put under review.

"There is something called first mover advantage," said Dr Abdallah.

"As Zimbabwe is turning around we are positioned to not only benefit but also to do more investment. We have secured the best locations in Mozambique and Zimbabwe and we secured them at a very attractive investment price, so we believe that we will get a very good return in time."