Full concentration on the million-strong city

Moscow is where it's all happening, as the heart of the Russian exhibition industry. International organisers are flocking to the city. Gradually things are getting tight.

Travelling by car in Moscow means getting stuck in traffic jams. The Russian capital pulsates with life round the clock. More and more of the 10.4 million residents in the city and the 11.8 million in the surrounding region are driving to town in their own cars. Even so, the underground and buses in Europe’s biggest city are packed at any time of day and night. The metropolis exerts an incredible pull. Moscow is not Russia. It is a system of its own, a microcosm - but one that plays a key role in Russia’s economy. The city accounts for 12.5 % of national gross domestic product (GDP). Russia’s GDP jumped by 7.1 % in 2004 to roughly EUR 460 billion.

About a quarter of industrial output in "Kremlin city" stems from mechanical engineering. The main branches are machine tool building and tool-making, electrical engineering, production for stock, the automotive industry and instrument engineering. Added to which, some 80 % of Russia’s financial potential is concentrated in Moscow, and two-thirds of the total volume of foreign economic investment is channelled into the capital. Consequently, Moscow is the major area of activity for foreign investors. The city is home to some 18,500 commercial companies, restaurants and bars and service companies, 9,000 retail properties and roughly 150 markets employing about a million people.

Muscovites are spenders with a vengeance, delighting in fashionable clothes and fast cars, in trendy bars and expensive jewellery. Although by no means all the people can afford this luxury and glamour, the mood of enterprise and radical change acts as a magnet to designers, hotels, shops, restaurants and boutiques wishing to set out their stall alongside those already established or seeking to become so. Many international institutions, banks, insurers and other service providers are in search of permanent new, representative offices in Moscow. "The capital is the business and political nerve centre of the huge country - many companies want and need to have a presence there," the German Department of Foreign Trade Information (bfai) in Cologne stresses.

Day in, day out businesspeople also try out functions and events for the many people living in Moscow or visiting the capital. Besides which, new trade fairs and exhibitions are added almost daily to the calendar of events: "Some 60 % of all events in Russia are staged in the capital," says Ludmila Smorodova, managing director of Russia’s International Union for Exhibitions and Fairs (IUEF). Together, the 40 biggest Russian cities provide around 500,000 m2 of under-roof space, more than 300,000 m2 of which is concentrated on Moscow and St. Petersburg, so the Association of the German Trade Fair Industry (AUMA) in Berlin reports (figures as per end-2004).

Even if not all Russian and international exhibition organisers are riding this wave, Moscow is definitely where it's all happening. "The heart of the Russian trade fair and exhibition industry beats here," NürnbergMesse representative Hubert Demmler insists. Many international organisers, such as ITE, have been present in the city for decades. The show management company headquartered in London stages around 25 shows there, both in smaller venues like Gostiny Dvor, the World Trade Center and the Olimpisky Complex and in the 70,000-m2 Expocentr Krasnaya Presnya and the modern Crocus Expo facility. Messe Düsseldorf, on the other hand, active in Moscow since 1963, has so far relied on working only with the downtown Expocentr, which has been in business for more than 45 years. The German exhibition company even invested in a new hall there a few years ago.
Others also bank on the position and influence of the traditional exhibition site: E.J.Krause & Associates, who for more than 20 years have organised exhibitions the world over for telecommunications, network technology and IT & IT security under the Expo Comm label, concluded a joint venture agreement in 1995 with Expocentr, show managers since 1975 of SVIAZ in Moscow. "This has made the expo available to an international audience, transforming it over the years, with the backing of the Russian government and official ministries, into the most successful telecommunications and information technology show in Russia and the CIS states," the company's owner and CEO Ned Krause states.

But the big headache for the venue, next to which the "new centre of Moscow" is currently under construction with 500 metre-high office and commercial high-rises and massive underground parking facilities, remains the shortage of space. "The fairs here are growing and simply no longer have sufficient room in the Expocentr," says Michael Johannes, managing director of GiMA International Exhibition Group GmbH & Co. KG, Hamburg. GiMA, co-organisers of the building and construction exhibition Mosbuild together with the ITE Group, London, and ITE, Moscow, have even been obliged to split up the show. Part of Mosbuild now takes place in the Expocentr and another part in Crocus Expo, a good 45-minute drive away (assuming there are no traffic jams). Around 80 events are implemented on the Krasnaya Presnya exhibition ground.

For that reason, too, the present run on the new Crocus Expo centre located on Moscow's outer ring road some 20 minutes by car from Sheremetyevo airport is enormous. Opened in March 2004, the complex also houses a shopping mall with lots of exquisite designer shops. "Since the launch we have already hosted 120 exhibitions and corporate events," says Mustafa A. Melikov, in charge at Crocus Expo of all international business relations.
Arguably the best-known exhibition brands to have been introduced so far into Moscow's newest exhibition and event centre are Messe Frankfurt's consumer goods show Ambiente and the textile fairs Interstoff, Heimtextil and Techtextil, ITE's Mosbuild and VNU Exhibitions VIV, the international trade fair for intensive animal production. The Italian organiser Cosmit S.p.a. has a presence there with its furniture fair I Saloni Worldwide. One of the most prominent Russian exhibition organisers, MVK, is likewise delighted with the Crocus Expo exhibition capacities, stationing the expos PolyGraphInter, International Trade Fair for the Printing Industries, the furniture fair Euroexpomebel and the packaging industry trade fair Rosupak in the new building.

The 27,600 m2 of exhibition space is spread among four, nine metre-high halls of varying sizes. This September Crocus Expo is increasing its exhibition area: In an additional two-storey pavilion eight halls featuring a total display area of 62,500 m2 and nine conference rooms are to be built.
Melikov signals further plans in the foreseeable future with the construction of a new, roughly 160,000-m2 exhibition pavilion. In addition to a business centre it will also integrate a hotel. "Crocus Expo has gained rapidly in stature. It's not just the hall that people like - the service is also spot on," Demmler says.

There are other people, too, with plans in the mega city. Only recently Yuri Lushkov, mayor of Moscow, announced he would like to build a municipal fairground. Plans are already on the drawing board to modernise the All-Russian Exhibition Centre VVC in operation for many years now, turning it into the country's biggest exhibition complex by far with projected space of 200,000 m2. The snag is that the buildings currently in place, some of them protected historical landmarks, are dotted all over the grounds. Experts caution against the difficulty of integrating them meaningfully into a modern exhibition infrastructure. The situation adjacent to a fun park is also viewed rather critically in terms of the implementation of trade fairs. So far the VVC has mainly hosted lots of little separate events. It remains to be seen whether Mayor Lushkov actually puts his VVC project into practice.

Another important trade fair venue in existence since 1959 in Moscow is the Sokolniki Culture & Exhibition Centre. Comprising eleven halls, it is set in the midst of Sokolniki Park, to which it also owes its name. In the region of 33,000 m2 of exhibition space plus another 5,000 m2 outdoors is available there. Its operators, the MVK Holding Company, who stage more than 70 proprietary shows in the centre, have no possibility of extending the site, though, because the park area must remain as it is. MVK are thus doubly glad of their collaboration and strategic alliance with Crocus Expo: Some of the top Russian organiser's fastest-growing fairs are already held in the (at present) second largest exhibition centre in the capital (see above). Tatiana V. Volkova from MVK greatly welcomes the further development of Crocus Expo, given that so far not all exhibitors at the furniture or packaging fair, for example, have found room there.

Volkova has no problem with mounting competitive pressure from the new centre: "There are not yet many exhibitions in Moscow capable of completely filling the newly available areas." Whereas at the beginning of 2003 just four show management companies - Expocentr, MVK, Maxima und ITE - staged around 26 % of all fairs, keen competition among organisers, too, is now the norm, part of the big city's entirely normal madness: "In the capital alone we number 125 exhibition organisers, many of which open up one day and close the next," Volkova maintains. So who or what decides who ultimately makes the grade? "At the end of the day it's the quality events that come out on top," the exhibition specialist concludes.

But the industry association IUEF and the Muscovite exhibition guild are increasingly addressing the problem of proliferation, as fairs with similar names, themes and dates swamp the market in Moscow almost by the day. "Yet it would be so important for Russian exhibition activities to unfold more strongly throughout the regions as well, Demmler insists. He also hopes that the big new venues in "Kremlin city" will soon lead to development of the entire exhibition portfolio. "Consumer exhibitions, for instance, could considerably liven up the exhibition programme." NürnbergMesse’s representative would also welcome entirely different, novel topics that don't weigh down the exhibition market by appearing in endless variations on a single theme. Alliances with even more foreign expo organisers would certainly be helpful in this respect.

The present situation in the capital gives the exhibition pro reason enough not necessarily to concentrate his future projects on the million-strong city alone. And Mother Russia would certainly appreciate it were the exhibition industry soon to put in a stronger regional appearance in areas that are unquestionably gaining in attraction.

m+a report Nr.5 / 2005 vom 12.08.2005
m+a report vom 12. August 2005