Halal Industry & International Market

8/4/2019 Halal Industry & International Market

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Halal Industry & International Market

Presentation byMariam Abdul Latif

Vice President, Halal IntegrityHalal Industry Development Corporation

CCM Halal Awareness SeminarMATRADE, 16 December 2008


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Scope


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IntroductionThe Halal Industry:

Products

Food (Ingredients, groups)

Non-food Products(Pharmaceuticals, Cosmetics,Personal Care, Leatherwear)

Services

Food (Hotel & Catering Services)

Related activities(Certification, Training, Banking, Media,Logistics, Tourism)


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Standards,Auditing &

Certification

FoodManufacturing

Food andProductRetailing

Meat &Poultry

IslamicFinance &Banking

Logistics &Shipping

Food ServiceIndustry

Pharmaceuticals,Health & Personal

Care

Research &Development

Food,Products

andServices

Components of the Halal Industry


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Growth in Muslim population 2001-2005million

2001 2002 2003 2004 2005

* Includes Indonesia, Pakistan, India, Bangladesh, Nigeria, Turkey, Iran, Egypt, Morocco, YemenSource: IMF World Economic Outlook Database 4/2007; International Religious Freedom 2006; Economist Intelligence Unit 2006

1,330 1,3551,382 1,408

1,433

903 920 937 952887

CAGR =1.8%

World Muslim population

Top 10* countries of Muslim population

25

27

29

31

33

35

37

39

41

43

2001 2002 2003 2004 2005

CAGR

Qatar

Nether-lands

UK

France

Germany

4.5%

2.6%

4.7%

2.7%

2.7%

US 4.4%

Muslim population growing at a faster rate of 1.8% thanglobal population growth of 1.26%

GDP per capita at PPP for top 5 countriesUSD 000

Countries with lower Muslim populations compensate byhaving very strong and fast growing GDP per capita

Why Halal?Large and growing Muslim population

of increased affluence


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Region Muslim Per capita food HalalMarket Population expenditure Value Million USD

Africa 462 250 115,443

West Asia 195 570 111,150

South Central Asia 585 300 175,440South East Asia 266 350 93,230

China 39 175 5,865

Europe (inc Russia) 51 1,250 63,988

N. America 9 1,750 14,455

S. America 1.6 500 820Oceania .35 1,500 525

Total 1,608m $580,916

Source:www.islamicpopulation.com,,Euromonitor

Global Halal Market Size - 2005
http://www.islamicpopulation.com/http://www.islamicpopulation.com/


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>20% of worlds population are Muslims

World Muslim Population


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To leverage on Malaysias advantages

in the halal sector particularly in terms ofcertification and logo recognition, thePlan will drive the sectors growth in

making Malaysia an international hubfor halal products and services. TheHalal Industry Development Corporationwill be established to develop thisindustry in a holistic and orderly manner.

I am confident that by carrying outthese duties, the HDC will be able toplay a leadership role and enable the

country to bring our diverse skills andexperience to bear in developing thehalal-related sectors.

YAB Dato Seri Abdullah Hj. Ahmad BadawiPrime Minister on 31 March 2006, at thetabling of the motion of the Ninth MalaysiaPlan, 2006-2010 in the Parliament.

Mandate


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Halal Industry Development Corporation(HDC)


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The Halal Value Chain

Extremely diverse and cuts across multiplesectors

Islamic

Financing

Halal Logistics

Livestock and

Agricultural

Produce

Halal ParksHalal

Entrepreneurs

SME

Development

Export

Promotion

BNM

MOF

Malaysias

Leadership in

Islamic Banking

an excellent

Syariah compliant

financial

instruments and

services for theHalal Industry

MOT

Halal Logistics

involves

providing halal

certified cold

storage

facilities,

refrigerated

transportation,

and non-contaminated

shipping

services.

Creation of

Halal

Distribution

Centres

MOA

DVS

Livestock and

Agricultural

Produce involve

rearing, grazing,

feedlot, syariah

compliant

slaughtering and

planting of

commercial

grade agri

products.

GlobalGAP and

SALM and SALT

compliance.

MECD,EPU,

UPEN

State SEDCs

Halal Parks

provide location

requirements for

SMEs and Foreign

Investment.

Focus on Flagship

Halal Zone, PKFZ,

Tg. Manis Halal

Park, Sarawak;

Gambang Halal

AgriFood Park

and Padang Besar

Halal Park.

MECD

PNS

MARA

PUNB

Halal

Entrepreneurs is

an essential part

of the value

chain particularly

the creation of

successful

entrepreneurs

under the BCIC

programme

SMIDEC

MECD,

Domestic Trade

Development of

Halal SMEs to be

export ready and

gradually

becoming global

players. Develop

product

differentiation and

branding. Access

to Hypermarkets

such as Tesco,

Carrefour,

Jusco and Giant.

MITI

MATRADE

Export Promotion

and Access to

Global markets

through Matrade.

Participation in

Halal Expos and

promotional visits

in strategic markets

for Halal Industry

players.

HDCs role is to ensure an integrated and comprehensive development

of the National Halal Industry throughout the entire Halal Value Chain

AGENCIES INVOLVED


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Halal Integrity

Halal Certification

Industry Development Branding & Promotion

Halal Training

Halal R&D

SME Development

Foreign Investment

R&D and Innovation

Acquisition &Consolidation

Branding

Marketing

Promotion

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Standard & Reference

Halal Park

Events

Consultancy

Global Reference

Centre

HDC Strategic Thrusts


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HALAL INTEGRITY DIVISION

Improve the certification processProvide product and premise

certification services

Monitoring and network withother relevant agencies

HALALINTEGRITY

Certification and Audit

Improve level of awareness onHalal and its benefits

Implement and coordinate HDC

training programmes

Training

Develop Halal R&D roadmapCollate R&D information from local

and regional institutionsDevelop international R&D network

Halal R&D Centre

Develop HDC Halal LibraryCollate database on Halal

certified industries& ingredientsDevelop network with all

international Halal websites

Halal Reference Centre

Develop in-house Halalexpertise (Syariah and Science)

Develop and provide Consultancyto other government

Develop and provide Consultancyservices to industry

Technical Advisory Services

Malaysia as the World Halal Hub. Leader in providing world-class services on Halal

references, training, consultancy, certification and R&D in Halal industry.

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Acquisition & ConsolidationTo acquire established and niche innovative

companies and to promote JV between

Local and Foreign companies to acceleratemarket penetration

R&D and InnovationStrengthen R&D and Product Innovation

and to conduct Workshop to increaseinnovative capacity

Foreign InvestmentAttract Foreign Investment to invest inHalal Malaysia and to establish a one

stop Investor Support Centre

SME DevelopmentProvide International and Local Market

Access for SMEs and identify gaps andstrengthen SME capacity to become global

players and Halal Champions

Halal Park ManagementEstablish the necessary Guidelines for Halal Park

Provide Halal Park Advisory Services

Ensure Halal Parks are operational for investors

INDUSTRYDEVELOPMENT

To attract foreign investments to establish Halal R&D and Global Halal ProductionCentres and to facilitate the growth and participation of Malaysian Companies in theGlobal Halal Market.

INDUSTRY DEVELOPMENTDIVISION

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Branding

Creation of a holistic HalalMalaysia Brand

Promotion

Acquisition and utilization ofmarket intelligence

Marketing

Creation of a Malaysia centricpromotional campaign

To develop effective branding, marketing and promotional campaigns for Malaysias

Halal hub programme, and to position HDC as the Halal service provider domesticallyand internationally.

Three core areas

Halal - Education on the overall

concept of Halal

HDC - Brand HDC as a market

leading corporation

National Brand - Create a strongMalaysian national Halal brand

Establish the most up-to-datemarket intelligence on theworldwide Halal markets

Create Halal Malaysia campaign which will

include food, finance, Halal services, consumer

goods. Cosmetics and pharmaceuticals

BRANDING & PROMOTIONDIVISION

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BRANDING &

PROMOTION


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Vision and Objectives of theHalal Master Plan: 2-prong

Malaysia as the globalleader in the innovation,

production and trade of anumber of halal-related

sectors

Identify sectors that Malaysia shouldfocus on

Identify strategies and initiatives toaccelerate growth and increase GDPcontribution from these sectors

Identify how to strengthen Malaysiascapabilities in halal integrity

Develop means to capitalise on this

know-how to create new incomestreams for Malaysia

Malaysia as the globalreference centre for Halal

Integrity know-how

Objectives Vision


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Malaysia cannot be involved in everything focus areas were identifiedbased on demand potential, local capabilities and potential to create

economic impact

Specialty

Processed

Food

Cosmetics

And

Personal

Care

Halal

IngredientsLivestock**

Global Reference Centre for Halal Integrity (Standards,

Certification, Training, etc.)

New source ofexport led growth

Legislation and regulatory

framework

Funding and incentives

Human capital

Industry standards and

certification

Physical infrastructure and

connectivity

Public sector

delivery system

Area in whichMalaysia will be a

global referencecentre

Industries thatMalaysia needs togrow in order tocreate economic

impact

Key enablers to bestrengthened

**Livestock is included to address consumer well-being issues, not as an export oriented growth industry

Source:Ethos analysis

Pharmaceutical

The Halal Industry Master Plan: Focus Areas


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Great potential for Malaysia in developing andpromoting the halal products and services forglobal market.

Halal products and services are also gainingincreasing acceptability among non-Muslims

Created interest among food producingcountries, Muslim and non-Muslim

The global value for trade of Halal foods andnon-food products is estimated at USD2.1trillion annually.

The Halal Industry


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35

12

95

6

23

10

FMCG sector

Nutraceutical

Confectionery

Cosmetics &

personal care

Bakery products

Processed food***

& beverages****

Primary meat

Global market for potentially Halal products, 2005** (Percent)

Potentially halalmarket has been

quantified as the

target market that

can potentially be

captured

Approximately 67%of potentially Halal

products are

categorized as fast

moving consumer

goods (FMCG)

Food FMCG andprimary meat

together account for

62% of the marketDoes not include Islamic Financial Services. Services involved in final product e.g. certification, logistics, R&D are included in sectoral values

** Based on sales revenue

*** Halal processed food is taken as 66% of the total based on world halal meat consumption

**** Only non-alcoholic beverages

Source: Euromonitor reports; FAOSTAT

Pharmaceutical

Global Halal Industry


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Halal Market is expanding More countries entering market

EU, USA, China, Turkey

More product choices

New generation, new tastes, newproducts/varieties

More outlets/fast food

Major retailers entering Halal market More market sectors emerging

Contract manufacturing, Logistics, Security,Auditing, Training, Media,

Market Trends


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Halal is going up-market

Market value include healthy, ethnic, fair trade,environmental & animal friendly

All expanding sub-sectors, all intersect withHalal

Halal is going mainstream

Tesco, Carrefour taking Halal global

Looking for 40% own-label products

Halal is not just religious issue

High cross-over market potential

Market Expansion


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The Era of Halal Pharmaceuticals

Global Market Value:

2006 = USD 607 billion*

2013 ~ USD 818 billion*

2020 ~ USD 1,300 billion**

Source:*Frost & Sullivan Market Insight 2 April 2008**PricewaterhouseCoopers Report 13 June 2007


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Driving Factors For Global Halal Pharmaceuticals

Growth in the Muslim

population more supply Rising incomes among

Muslim consumers

created more purchase

Increasing demand for Halal

Pharmaceuticals spur more R&D

A choice for Muslims toconsume Halal

pharmaceuticals

Most Pharmaceuticals marketed are not Halal and hasspurred demand for genuine Halal products , hence need

Halal certification from competent authority


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US AND EUROPE

MuslimPopulation(Million)

Percent(%)

GDP(USD)

United States 10.0 3.7 37,800

France 4.1 7.0 27,500

Germany 2.8 3.4 27,600

United Kingdom 1.6 2.7 27,700

Italy 0.6 1.0 26,800

Netherlands 0.5 3.0 28,600

Source: islamicweb.com

Potential Muslim Customers


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Key Halal MarketsAlgeria Bahrain Brunei Egypt

Indonesia Iran Iraq Jordan

Kuwait Lebanon Malaysia Morocco

Oman Qatar Saudi Arabia Syria

Tunisia Turkey United Arab Emirates

Yemen


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India - 140 million

France - 6 million

China - 40 million

Germany - 3 million USA - 8 million

UK - 1.5 million

Philippines - 6 million

Canada - 800,000 Singapore - 600,000

Thailand 8.2 million

Key Halal MarketsIn Non-Muslim

Countries


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Asia

Malaysia/Thailand/Singapore/the Philippines/Brunei/China and India have all taken steps

to tap into the global Halal market.

Has the largest Muslim population

Several countries, including Malaysia, aspire

to become an international Halal hub.


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Middle East

Especially members of the CooperationCouncil for the Arab States of the Gulf (GCC),have higher incomes and consequentlyhigher per capita rates of consumption.

The region import 80% of its foodrequirements.

Saudi Arabia and the United Arab Emirates

(UAE) are the most important import markets


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United States

The market for Halal products is estimated atUS$12 billion annually and domestic salesare growing.

US sales of Halal food have increased by

more than 70% since 1995. US companies are significant exporters of

Halal products.

US companies involved with Halal products

include Cargil, ConAgra, Tyson, PurdueFarms, Oscar Mayer and Midamar.


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Europe

Higher purchasing power rather thanpopulation size.

The port of Rotterdam is the key Halal entry

point for the European market. The port dedicated one warehouse solely to

Halal products in 2008.

IDEAS, March 2007


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Incentives for HalalFood

Incentives For HalalFood 100% ITA for 5 years under PIA, 1986

Double deduction for expenses to obtain Halal

certification, quality systems and standardcertification

Incentives for companies who qualify for Halal

Malaysia Status

HalalIndustry Players

ITA of 100% for 10 years

Exemption on statutory income from export sales

for 5 years


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Promoted Sector Under Halal Malaysia Status

Livestock and Meat Products;

Specialty Processed Foods; Cosmetics and Personal Care;

Halal Ingredients ; and

Pharmaceuticals

Criteria

Halalcertified

Compliance with quality, hygiene andenvironmental guidelines

15% of workforce compries of knowledgeworkers and minimum 3 halal compliance

officers


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Prospect/Investment Opportunities

Production of HalalPharmaceuticals

Supplier of Halal capsules (halal gelatine)

Alternative Ingredients vitamins, flavours,

seasonings and palm oil-based additives

Functional Food - fibre & nutrient enrichedproducts, traditional herbal products, food

supplements


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Comply to importing country requirements(food laws and regulations)

Consistent good quality Halal products Good networking with importers or agents in

the importing country

Continuous R&D in Product Development

Factors To Consider ExportingHalal Products


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Understanding the concept of halal isimportant

Strong Commitment of the management tosupply authentic halal food

Comply to HDCs requirements on Halalproducts/pharmaceuticals

Establishing an internal Halal Committee Label food products properly for consumer

informed choice

Management Of QualityLocally Manufactured Halal

Products

O Q


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Establish a quality assurance system in thefactory/premise (GMP, GHP and analyticalservices)

Ensure reliable supply of halal rawingredients

Trained food handlers in good hygienicpractices

Ensure halal products are halal throughoutthe production chain (from raw ingredients,processing, packaging, storage anddistribution)

Management Of QualityLocally Manufactured Halal

Products


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A Tripartite management between the government(competent authority), the industry (manufacturers/retailers) and the consumers as smart partnership,working together and close cooperation for making

Malaysia an International Halal Hub a reality The government as the policy maker and regulator

The industries and the retailers are accountable forhalal products they produce or distribute

The consumers are educated and have access tohalal information and labelling during productpurchase

Smart Partnership


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SUMMARY

Think globally, act locally Halal product and services are the next world

market forces

Harmonize with international standards to becompetitive

Halal is good for business and business isgood for Halal industry

Success in Halal Pharmaceuticals is ashared responsibility


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Thank you for your attention

Halal Industry & International Market

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