In sluggish Russian economy, halal sees growth

Sun, 2019-07-21 04:17

SHCHYOLKOVO, Russia: The manager of a sausage factory near
Moscow, Arslan Gizatullin says his halal business has been feeling
the pinch — not so much from Russia’s sluggish economy but
competitors vying for a piece of a growing Islamic market.
Ever more producers are catering for the domestic Muslim community,
which accounts for around 15 percent of Russia’s population and
is set to expand, and in some cases are also setting their sights
on export.
“In the last few years in general, halal’s become something of
a trend in Russia,” said Gizatullin, who has been at the
Halal-Ash plant in the city of Shchyolkovo for seven years.
The factory was among the first of its kind when it opened two
decades ago, recreating Soviet-style sausages in accordance with
Islamic law, among other products.
“Now I go to shop displays and I see sausage from one, two, three
producers… I see that competition is growing,” he adds from the
factory, which employs 35 people and puts out up to 1.5 tons of
produce a day.
The halal economy, worth more than $2.1 trillion globally, is far
from limited to meat.
Cosmetics firms and services such as halal hotels have received
licenses from the body that oversees Islamic production in Russia,
while state-owned Sberbank is looking into creating an Islamic
finance entity.
The Center for Halal Standardization and Certification, under the
authority of the Russian Council of Muftis, has approved more than
200 companies since it opened in 2007.
The center says that number is growing by five to seven companies a
year — from a standing start at the collapse of the
anti-religious Soviet Union.
Rushan Abbyasov, the deputy head of the Council of Muftis, told AFP
the Russian agriculture ministry was supporting the center in its
efforts to increase exports to the Arab world and Muslim-majority
ex-Soviet republics.
“We’ve looked at international experience in the Arab world, in
Malaysia, and we’ve developed our Russian (halal certification)
standard following that model,” Abbyasov said in an interview at
Moscow’s central mosque.
“We’re doing it in a way that matches international halal
standards as well as the laws of the Russian Federation.”
The mufti pointed to an annual exhibition of halal goods and
producers in the Muslim-majority Russian republic of Tatarstan,
which this year saw its biggest ever turnout, as an example of the
sector’s growth.
Tatar officials told Russian media the halal food market accounted
for around 7 billion rubles a year ($110 million) — or just over
three percent of the region’s gross agricultural output.
But they said the sector was growing at a rate of between 10 and 15
percent a year.
The certification center said Russia’s overall halal economy was
also growing at a rate of 15 percent every year, but declined to
give a breakdown of its figures.
Russia’s overall economy is stagnant, with the government
predicting growth of only 1.3 percent this year, after 2.3 percent
growth in 2018.
Alif, a Moscow-based cosmetics firm, is a new company at the
forefront of the move toward exporting halal goods from Russia.
Manager Halima Hosman told AFP that, a year after launching,
Alif’s products were being sold in the Muslim-majority Russian
republics of Dagestan and Chechnya, as well as ex-Soviet Uzbekistan
and Kazakhstan.
“Our priority targets for export now are France, Turkey, Iran,
Saudi Arabia,” she said, adding that the company had
non-financial support from the halal certification center.
The 28-year-old, who was born into an Orthodox Christian family in
southern Moldova but converted to Islam as a teen, said promoting
halal products was about more than business.
“It’s a way for people who don’t know about Islam, who
aren’t Muslim, to find out about what ‘halal’ actually
means,” Hosman added of the alcohol- and animal fats-free
Lilit Gevorgyan, principal economist for Russia and former Soviet
states at IHS Markit, said the growth in Russia’s halal economy
seemed impressive but was coming from a “very low base.”
Further growth in the sector was likely to be driven more by export
than by domestic demand, she said.
This is mainly because household incomes have yet to recover from a
2014 crisis caused by a fall in global oil prices and Western
sanctions over Moscow’s annexation of Crimea.
“Halal food is more expensive due to its production costs, and
for Russian consumers… every ruble counts,” she said, adding
that much of Russia’s Muslim community was non-practicing.
Changing Muslim countries’ perception of Russia will be key if
Moscow is serious about increasing halal exports, Gevorgyan
“Branding is important,” she said, adding that Russia — as
yet — is not seen as a major halal producer.

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Source: FS – All-News-Economy
In sluggish Russian economy, halal sees growth