Print
Email
Discuss this article ( Comments)
vLinx Inc.(http://www.vlinx.com) is a Canada-based company founded in January 2000 which provides a web-based solution for the challenges of global sourcing and trade. In December 2005, vlinx Inc. launched vlinx UAE, a joint venture with the Ras al-Khaimah Investment Authority under the patronage of His Highness Prince Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah. It is also the developer of the Halal Global Exchange, a dynamic trading market dedicated providing the latest e-commerce import and export technology for the Halal industry.
ArabianBusiness.com conducted an interview with vlinx CEO Kombiz Eghdami about the business of the global Halal industry.
AB.com: Why did vLinx initiate the Halal Global Exchange and what does it offer to its clients?
Mr. Eghdami: The vision for the Halal Exchange was triggered by convergence of two factors, namely, the surge in global demand for Halal products and innovations in e-commerce technology. We felt there was an analogy with Islamic banking where the early leaders understood the depth of the underlying demand and took the initiative to supply the products. Today every major financial institution in the world offers Islamic finance products.
Similarly, today some of the largest brands and manufacturers of food and consumer products have begun to manufacture and export Halal products. Halal trade therefore, is now already global. Global trade however, presents a set of unique challenges for both buyers and suppliers. This issue is underscored by research conducted by the World Trade Organization and the UN Centre for Trade and e-Commerce. The research confirms that complexities of international trade add as much 15% to cost of one transaction.
This added cost is a direct result of added pressure from travel time and expense, safety and security, financing, language barriers, specifications, sampling, quality control, inspection, government compliance, duties and taxes, insurance, reliability, delivery.
In order to reduce inefficiency and become more competitive, the leaders in global retail and manufacturing in the U.S. and Europe, have invested heavily in deploying advanced supply chain management e-commerce software.
The Halal Global Exchange offers the same tools to all the participants in the sector.
It is web-based, which is the future of software and as such, importers and exporters have no need to invest in new hardware, invest in new software and pay transaction fees.
AB.com: How many companies are currently using the Halal Global Exchange and how fast is this expanding?
Mr. Eghdami: Six VIP suppliers were invited to participate in a120 pilot program that has generated in excess of US$ 20 million in transactions. The Halal Exchange will open its doors to all concerned during the Halal World Expo in Abu Dhabi in December of 2007, allowing them to register to vLinx and utilize the platform.
AB.com: vLinx UAE is a joint venture between vLinx Inc. and Ras Al-Khaimah Investment Authority. How important is it for the Gulf to be a leading hub for Halal trade?
Mr. Eghdami: Halal trade and its projected growth will become a significant parameter of global import and export. This is particularly true for Muslim nations and all countries with a substantial Muslim population. Major retailers in the UK, France, and Germany have already devoted shelf space especially for Halal products. The UAE is an enviable geographical and financial position to take the lead in creating a structured global trading community for Halal, and also become the global leader in adoption of the latest e-commerce technology for trade.
AB.com: In regards to Ramadan, what are the most widely traded goods on the Halal exchange during this month?
Mr. Eghdami: Our data indicates strong demand for poultry, meat and seafood products, both fresh & frozen, ready to eat products, confectionery & chocolates, halal jelly, dry fruits and cosmetics.
AB.com: How much Halal trade is expected to be generated on the Halal exchange during this month?
Mr. Eghdami: The transactions on the Exchange are actually in anticipation the consumer demand during the month of Ramadan. To this point, we have seen 80 - 85 percent increase in business activities leading to Ramadan. During the pilot, Canada and the U.S. are the leading sectors and we have been in contact with a number of leading Brazilian Halal exporters.
AB.com: vLinx will be exhibiting at the Halal World Expo in Abu Dhabi in December. What products and initiatives can we expect your company to unveil?
Mr. Eghdami: Our primary objective is to introduce all the Expo participants to the power and the simplicity of the Halal Global Exchange and its underlying web-based technology. We are not there to sell, but to inform. Advances in ecommerce technology by vLinx has resulted in incredibly simple to use tools for the very complex trade process. We would like the participants to see for themselves how easy it is to increase their business volume and profit margins. During the Expo, the vLinx team will provide live demonstrations of the Platform. This is the same technology that is in use in 16 countries by our clients.
AB.com: How do you expect the Halal Global Industry to develop in the next decade?
Mr. Eghdami: We believe the growth in the Halal global industry will be explosive.
There are a number of reasons that lead us to this conclusion, including growth in the Muslim population, which is considered the Primary market for Halal food; the Muslim population is projected to account for 30% of the world's population by 2025; rising incomes in Muslim countries and amongst Muslim populations around the world; increasing demand for safe, high quality food in both the Muslim segment in particular and the overall population in general; increasing demand for greater variety in primary markets; increased demand by non-Muslim consumers for healthy products and the recognition of the same in Halal products.
The projected figures are staggering. The global Halal market is estimated at USD 580 billion and according to the Financial Times will exceed $1 trillion by 2010.
As with Islamic finance, for the first time a number of countries and associations have embarked on various enterprises to create and develop formal certification, standardization and trade processes for the Halal industry. There is a sudden sense of recognition of the importance of this sector by all players, both private and public. Nonetheless, it is still early in the game.
Therefore, it is also the perfect time to introduce advanced yet easy to use technology to the industry. The final piece of the puzzle, The Halal Global Exchange utilizes the powerful yet inexpensive and extremely simple to use vLinx eCatalogue-Transaction Engine. The Platform provides the latest e-commerce technology for import and export to the Halal industry, resulting in higher business volumes and higher profit margins for both the buyers and the sppliers. It makes buying from overseas as simple as buying from across the street.
AB.com: Where will the home of the global Halal trade industry be?
Mr. Eghdami: The UAE and its leadership have a proven history of visionary leadership in commerce and governance. The global Halal industry will need that very leadership to bring structure and efficiency to the entire sector. The formal participation of various government and private sector entities in the UAE will set the tone and facilitate and encourage other countries to accelerate their participation. The global Halal trade community will have its creation in the UAE.