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Kazan Halal Hub - Unique Centre of Halal Production in Russia

20.05.2010

During the meeting between President of the Republic of Tatarstan, Rustam Minnikhanov, and President of the Islamic Development Bank (IDB), Ahmed Mohammed Ali, an agreement on the establishment of the Tatarstan International Investment Company (TMIK) was signed. Later, at the press-conference, the foundation of the Centre of Halal Products was announced. Gumar Kadyrov, CEO of the OOO "Linova Trade” (Limited liability Company) gave a view of the Kazan Halal Hub, of its goals and prospects.
Kazan Halal Hub - Unique Centre of Halal Production in Russia
During the meeting between President of the Republic of Tatarstan, Rustam Minnikhanov, and President of the Islamic Development Bank (IDB), Ahmed Mohammed Ali, an agreement on the establishment of the Tatarstan International Investment Company (TMIK) was signed. Later, at the press-conference, the foundation of the Centre of Halal Products was announced. Gumar Kadyrov, CEO of the OOO "Linova Trade” (Limited liability Company) gave a view of the Kazan Halal Hub, of its goals and prospects.

Gumar, could you tell us about the project?

Half a year ago, the Fund for the Development of Islamic Business and Finance initiated the establishment of the first Russian global transport and storage centre for Halal products in Kazan. Such centers are called "Hubs”, where 3 PL (Third party Logistics Services Provider) and 4PL companies offer their services. It is planned to be the largest Russian hub, which will combine the efforts of manufacturers, investors, logisticians, salespeople and clients, interested in Halal goods and services. The "Linova Trade” company was appointed an executor of the project. Kazan Halal Hub has already started operating. It is situated in the high-class logistics facility Q-Park, close to the Kazan airport.

What is the background of the Kazan Hub? Is this idea new?

The idea had already existed for a long time, but there was nobody to "catch” it. It is beyond the powers of ordinary enthusiasts to combine all the components of such a global project. Halal industry in Russia is in its embryonic state nowadays, and there are several reasons for it.

The first reason is poor demand due to the insufficient awareness of people about Halal and Sharia dos and don’ts.

Secondly, it is a one-sided view of the assortment of Halal products. They are usually associated with chicken, meet and seafood. Many other food products, means of personal hygiene, medical products and clothes are not available for Russian Muslims. The most part of these products are not manufactured in Russia, and imported in negligibly small quantities.

Thirdly, it is insufficient religious awareness of people. Not all the Muslims follow the Halal principles in their everyday life.

Fourthly, it is high marketing risks. They are based on the lack of the reliable information on the market, which entails high investment and finance risks.

What is more, there exist other barriers for business initiatives. Among them one can observe absence of legal and regulatory environment for Islamic finance, instability of Russian legislation, management barriers, absence of corresponding banking infrastructure, absence of insurance system, etc.

All these factors restrain the development of this sphere. However, nowadays as we can see it, Islam spreads actively in Russia, in the CIS countries and in the whole world. Therefore, we can hope that the interest in Halal products will grow, and Halal industry will strengthen its position on the world market as well as on the Russian market.

What advantages will manufacturers and consumers of Halal products have after the Hub starts operating?

It may be said without exaggeration that the prospects are quite optimistic, as the Kazan Halal Hub is beneficial to everybody. It is a unique place for manufacturers, as it gives them an opportunity for direct presentation of their goods. Dealers can find a wide range of Halal products, manufactured both in Russia and abroad.

We assist suppliers and distributors by finding such city shops and country sales outlets, which can purchase their food products and consumables.

Both manufacturers and distributors of Halal goods and services can use convenient transport and warehouse infrastructure of the Hub on beneficial terms, safely store their goods and send them to clients.

Halal cafes, restaurants and hotels will be able to purchase all kinds of food products, convenience foods, hygiene and health products. We have already started our close cooperation with HoReCa sector (hotel, restaurant and catering). We will be also glad to see cosmetics sellers, who are interested in opening Halal departments in their sales outlets, where women would buy Halal hair shampoos and conditioners, body lotions and creams, and other health and beauty products. In other words, the Kazan Halal Hub is becoming a Halal trade spot, which offers free choice, fair competition and good prices.

Halal Hub is a kind of a "knowhow” for Kazan. Do you think it will be successful?

Yes, I am sure in it. We understand the situation and get support of our partners - Islamic Development Bank group, Tatarstan International Investment Company, and numerous friends and colleagues.

What is the basis for your firm belief?

According to experts, the world’s total circulation of Halal products, manufactured in compliance with Sharia principles in the beginning of 2010 is estimated at no less than $650 billion. It is a huge market which opens great possibilities for all businessmen.

Halal products have gained general acceptance in the 21st century because of their high quality. There are more than 1.5 billion of Muslims in the world who consume these products, and more than 25 million of them live in Russia. Not only Muslims prefer Halal products. According to the marketing information, about a half of consumers are not Muslims. According to the sociological research, up to 70% of non-Muslims appreciate high quality and naturalness of Halal products.

Halal industry is a big and fast growing market. In the nearest future, the Halal market is estimated at $2.77 trillion. Its largest sectors are goods and drinks, which make up one third of the market, medical products, which make up a quarter of the market, bakery products, meat, cosmetics, and means of personal hygiene. Each of them makes up about 10 percent.

No professional research of the Halal market has been carried out in Russia so far, i.e. there is no information of the level of Halal consumption. We studied reports of reputable research teams on related issues, but they include no marketing statistics. That is why we made our own expert judgments, coordinated our actions with our foreign partners and professionals in international trade and we entered the Russian market with international knowledge adapted to Russia. We realized that when conducting informational and marketing research in scantily explored fields, it was better to take sociocultural factors into consideration rather than geographical ones. Groups of people are usually based on their common culture, on their common values and beliefs, and not on their geographical position. As an example, we took the researches carried out in nine Muslim countries – Malaysia, Indonesia, Pakistan, Jordan, Algeria, Egypt, Saudi Arabia, the United Arab Emirates, and Turkey.

What about the similar experience in other countries?

Such logistics hubs exist in almost all countries where many Muslims live. One of the largest hubs is situated in Rotterdam, in the Netherlands.

Which of them is the most successful? What practices would you like to adopt?

All of them are successful. Logistics is a blood vascular system of trade. When there is trade, there are unified worldwide principles, with some ethnic flavor, of course. This can be compared with a living organism: all people have same bodies, but wear different clothes. It is very difficult, and maybe it is not right to duplicate somebody’s experience. We have our own wonderful traditions, started by Kazan merchants and manufacturers. Unique archival documents of the 9-10 centuries are going to be presented at the Second International Islamic Business and Finance Summit in Kazan on June 28 and June 29. They testify an active international trade between Kazan and the rest of the world. Such trade traditions should be restored and strengthened.

What will the Kazan Halal Hub look like in three or five years?

It is a really beautiful project. It is implemented both on the earth and in the air, for the sake of our bodies and our souls. We started this difficult project enthusiastically, combined all our abilities, experience and good intentions, so that our other people could enjoy Halal food and use Halal goods and services.

We hope that we will be able to create Russian Halal logistic infrastructure in accordance with our long-term strategy, and it will team up all manufacturers and consumers of Halal products in every region. The Kazan Halal Hub will not only be engaged in trading activity, but also will introduce and promote global technologies on the Russian market.

We predict that after two years of operation, the Kazan Halal Hub will become the largest distributing centre of Halal products and services in Russia and the CIS countries, where interests of manufacturers, sellers and dealers meet.
The Kazan Halal Hub is opened to the world!

You can reach us at any one of the following ways: by phone (843) 5676060 or 89600406677, by e-mail trade@linova.ru. Our website is www.kazanhalalhub.com, and our address is 3, Lavrentiev str., 4th floor.

We are always glad to meet new people and new partners!

Thank you for the interview.
Maryam Safi

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