Meeting demands of the halal industry
The global halal market is set to grow at
an exponential rate driven by increasing demand from the Muslim as well as
non-Muslim population.
Figures show that the global halal market
size is expected to reach US$9.71 trillion by 2025, with countries such as
Malaysia, set to lead the pack over the coming years.
According to the ‘State of the Global
Islamic Economy Report 2018/19’ by Thomson Reuters, in collaboration with
DinarStandard, with 1.8 billion Muslims, and Muslim spend estimated at US$2.1
trillion in 2017, the Islamic economy continues its steady growth.
State of the
Global Islamic Economy Report 2018/19.
It also noted that the global Muslim spend
across lifestyle sectors was US$2.1 trillion in 2017, while the Islamic finance
sector has US$2.4 trillion in total assets.
It added, food and beverage leads Muslim
spend by category at US$1.3 trillion, followed by clothing and apparel at
US$270 billion, media and entertainment at US$209 billion, travel at US$177
billion, and spending on pharmaceuticals and cosmetics at US$87 billion and
US$61 billion respectively.
As the global halal industry grows,
Malaysia continues to cement its status as a global leader in the halal
industry as according to the Global Islamic Economy Indicator (GIEI), for the
fifth year running, Malaysia overall has the leading Islamic economy ecosystem.
“Malaysia has long ago taken important
steps to establish a world-leading Islamic economy ecosystem, led by its robust
and comprehensive halal standards, but supported by an extensive ecosystem that
spans its halal free zones (halal hubs), well-developed halal products
manufacturers, a strong Islamic finance industry, and a robust investor
ecosystem that includes private equity, venture capital and sovereign wealth
funds.
“Malaysia’s lead in the past year has been
maintained, with important steps taken to strengthen its role in the global
regulation of halal products, with its establishment of an International Halal
Accreditation Board that seeks to address short-term profit seeking among
certifiers.
Aside from that, Malaysia’s reputable
certification has also made it an ideal choice for businesses from other
nations to access the international halal market and as such, the government
has been urging local businesses to utilise of the country’s advantage in the
global halal industry.
“Malaysia’s halal certification, recognised
at the global level, should be used to entice more local and foreign companies
keen on capitalising on that advantage.
“Malaysia has been involved in the halal
industry for a long time but was too focused on selling halal products without
considering its expertise in the process of achieving the halal status.
“We cannot focus only on promoting halal
food products as before. Instead, we need to be more aggressive to enlighten
the industry players on the halal certification process, in which we possess
recognised expertise,” Minister of Entrepreneur Development Datuk Seri Mohd
Redzuan Yusof said at the soft launch of the Malaysia Halal Expo 2019 (MHE
2019).
In addition to its infrastructure, he
pointed out that Malaysia could attract more businesses to expand here and
create more economic opportunities through its expertise as well as capability
in positioning itself as a global halal hub and a better understanding on the
halal process.
As the global halal industry continues to
expand, there still remains the issue of a uniform halal certification,
regulations, and other matters that need to be iron out in order for the
industry to grow further.
With several major events set to happen in
the next few months that could highlight these issues, BizHive Weekly takes a
look at updates in the industry.
Progress in the halal F&B industry
When it comes to the term ‘halal’, food and
beverages (F&B) are often associated to the awareness and observance of
‘halal’, making its compliance vital to most countries looking to hop on the
lucrative halal market.
Besides the finance sector, the F&B
sector makes up a huge portion of the Islamic economy. According to the ‘State
of the Global Islamic Economy Report 2018/19’ by Thomson Reuters, in
collaboration with DinarStandard, the halal food industry totals to US$1,303
billion in 2017 and that amount is expected to grow by 6.1 per cent to US$1,863
billion by 2023.
SOURCE: State of the Global Islamic Economy
Report 2018/19.
“With 1.8 billion Muslims, around
one-quarter of the world’s population, there is substantial potential to
produce halal F&B,” the report highlighted.
The opportunity has also been seized
globally, by Muslim and non-Muslim companies and in some cases, some prominent
halal food products are being produced in non-Muslim countries such as Brazil,
China and more.
According to the report, moves are underway
to create that ‘kulu halal’ ecosystem, which in line with the globalisation of
food production is having a global knock-on effect.
“Saudi Arabia, for example, has toughened
requirements for halal, which threatens Brazil’s ability to export meat to its
largest export market in the Middle East. Meanwhile, Indonesia is planning to
implement mandatory halal certification by 2019, although is struggling to put
the process in place precisely because so much food and other products are
globally sourced,” it added.
As more Organisation of Islamic Cooperation
(OIC) and non-OIC nations grow increasingly aware of the benefits and
opportunities in the halal industry, regulation as well as a uniform
certification are still a big concern in the industry despite its growing
popularity.
“Halal certification is a necessary
operational step to addressing Muslim needs, but remains a challenging, complex
process,” Thomson Reuters’ report highlighted.
“Halal falls below global best practices
due to a lack of commonly accepted standards among certification bodies
globally, oftentimes resulting in duplicate certification costs and added
complexity,” it added.
According to the report, there are also
over 300 officially recognised certifiers globally, but there remains limited
oversight by impartial accreditation bodies, leaving substantial room for
misrepresentation.
The report also highlighted that the lack
of global alignment on certification increases costs and could destroy value.
Nevertheless, over the last few years,
there has been a number of initiatives launched by several OIC countries to
raise the overall standards in the halal F&B industry.
Earlier last year, taking a step to
establish a greater collaboration between different halal bodies worldwide and
in a step towards a meeting a mutual standard, Malaysia launched a new
international association called the ‘International Halal Authority Board’.
Headed by the Department of Islamic
Development Malaysia (Jakim), the association is expected to serve as a
platform to harmonise global halal authorities and certification bodies.
Niche markets rife with opportunities in
Malaysia
For companies in Malaysia, there countless
opportunities for those exploring ways to market their products in the halal
industry.
Given the country’s reputation in the
global halal industry as well as the government’s support of the growth of the
halal industry, companies here can thrive if given the right push.
The halal industry is also no longer
limited to just F&B as globally, demand has been growing in other
industries including cosmetics, pharmaceutical, and fashion.
SOURCE: State of the Global Islamic Economy
Report 2018/19.
During the ‘Halal Pharmaceutical Forum’
held last year, CCM Duopharma Biotech Bhd (CCM Duopharma) highlighted the
global halal product market is currently dominated by four main sectors namely
food, pharmaceuticals, cosmetics and others.
It pointed out that pharmaceuticals account
for 26 per cent, the second largest sector after food with 61 per cent and
cosmetics with 11 per cent, as consumers grow increasingly aware of what goes
into their bodies.
“Driven by growing demand, the deepening
and widening of the sector, the halal pharmaceutical industry is expected to
grow eight per cent year-on-year to USD$132 billion by 2022,” it added.
“Global communities are increasingly more
discerning and demand that only the purest and the best ingredients are used in
the making of pharmaceuticals.” said CCM Duopharma group managing director
Leonard Ariff Abdul Shatar.
He further highlighted that the market
potential may be even greater as it is not just exclusive to Muslim
communities.
“It has gained increasing acceptance among
non-Muslims too who associate halal with ethical consumption just as other
values such as social responsibility, stewardship of the earth, economic and
social justice, animal welfare and ethical investment ? in short beyond their
religious compliance,” he added.
SOURCE: State of the Global Islamic Economy
Report 2018/19.
CCM Duopharma, which is the first company
to obtain halal certifications for its range of prescriptive medicines, said:
“The strong demand for halal pharmaceuticals provides great potential for the
industry to tap into.
“The growing range and options in halal
pharmaceutical products have elevated pharmaceutical players to become more
competitive in penetrating the global Halal industry”.
Change is also afoot with the halal
pharmaceutical ecosystem taking major strides forward over the past few years,
Thomson Reuters said in its ‘State of the Global Islamic Economy Report
2018/19’.
It pointed out that Malaysia’s Halal
Industry Development Corporation (HDC) is currently compiling the first halal
pharmacopoeia, while JAKIM is set to introduce halal certification for medical
devices, including liquids for dialysis machines.
Regionally, it noted that Malaysia and
Indonesia are working to standardise the sector at the regulatory level,
setting an important example for the rest of the world.
Upcoming conventions highlight halal needs
MIHAS 2019
Malaysia International Halal Showcase
(MIHAS) 2019 is the go-to exhibition for those looking to market their products
overseas or to observe the halal export market.
An annual trade exhibition held in Kuala
Lumpur, MIHAS is hosted by the Ministry of International Trade and Industry
(MITI), Malaysia, and is organised by the Malaysia External Trade Development
Corporation (MATRADE).
The trade exhibition will see more trade
visitors worldwide, converge in a single venue to explore business partnership
opportunities available in Malaysia through the halal industry.
Last year, MIHAS 2018 saw 21,000 trade
visitors which resulted in total immediate and negotiated trade value of over
RM1.52 billion.
Sales from the exhibition component
recorded an increase of 29 per cent to RM914.57 million compared to RM708.82
million in 2017, while the MATRADE’s International Sourcing Programme (INSP)
generated sales of RM602.45 million, an increase of 99.5 per cent compared to
RM301.99 million in 2017.
The top performing sectors at MIHAS 2018
exhibition were prepared food (RM407.20 million or 44.5 per cent share of total
sales), beverages (RM129.3 million or 14.1 per cent share), pharmaceuticals,
toiletries & cosmetics (RM108.04 million or 11.8 per cent share),
agricultural produce (RM68.53 million or 7.5 per cent share) and machinery
& equipment (RM41.58 million or 4.6 per cent share).
The event focused on seven key product and
services clusters namely food & beverage, pharmaceuticals, cosmetics,
finance, tourism, e-Commerce and logistics.
Today, MIHAS is the premier event that is
not limited to the Asean region alone but is also supported internationally by
the participation of International Pavilions from countries across the globe.
The exhibition is set to take place from April 3 to 5.
In conjunction with MIHAS 2019, MATRADE is
also holding its global business matching programme INSP.
The programme is expected to match more
than 400 Malaysian companies with 150 high quality importers from over 40 countries
around the world. The programme is expected to be held on April 2.
World Halal Conference 2019
For something less more educational, the
World Halal Conference 2019 (WHC 2019) centres around the theme: ‘Fostering a
Robust Halal Economy: Global Integration and Ethical Practise to reflect upon
the uncertainties raised in building the future of Islamic Economy’.
This year, the conference is aimed at
accelerating competitive and inclusive economies around the world by enhancing
the understanding of potentials of an Islamic Economy; facilitating
public-private collaboration to improve competitiveness and inclusive growth
performance of particular economies and regions; building a foundation to
network; and collaborating with stakeholders across the world even in countries
where Muslims are the minority.
“The halal industry has always been of
paramount importance to Malaysia as a Muslim-majority country.
“The Muslim population worldwide translates
into a rising international demand for Halal products and services. Halal is
accepted as a truly global industry and this ever-increasing globalization
represents a vibrant opportunity for the global economy.
“Nevertheless, it also presents several
challenges, to do with global attitudes and rapid technological change; hence
it causes important responsibilities concerning the ethical governance and its
harmonised regulation worldwide.
“With the current technology revolution,
global integration becomes sudden and borderless. This is where by fostering a
true halal economy, these challenges can be diminished.
“The WHC 2019 would like to take
realisation forward in demonstrating that the halal economy has a vital role to
assume its potential within the wider global economic returns,” it said.
Halal stakeholders from more than 50
countries are expected to be at the two-day conference starting April 3.
Among attendees include Government and
Industry Leaders, Halal Industry Players, Media, Academicians and Researchers
as well as Business and Trade Associations.
Global Blockchained Halal Industry Forum
2019
Held last week, the Global Blockchained
Halal Industry Forum 2019 highlights the future of the halal industry and how
technology could better enhance the growth of this industry.
Themed ‘Digitalisation and The Halal
Industry’, this international forum was a platform for the Halal industry
stakeholders to better understand the impact of Blockchain Revolution and its
technological advances on Halal business models and operating processes that
involve supply chain, smart contracts, certification; which are vital to the
Halal food, pharmaceutical, cosmetic and personal care, Islamic finance and
travel industry.
The participants were educated about how to
adopt blockchain technology in the halal certification, syariah complied smart
contract, the transparency and traceability of halal supply chain.
Halal cosmetics and personal care gaining
traction
On the same wavelength as pharmaceutical
products, the cosmetics and personal care sector in the halal industry is also
gaining popularity.
“The popularity of halal cosmetics among
millennials in Northern America, Europe, the Middle East and East Asia has
prompted more market entrants and the expansion of established players seeking
global market share,” Thomson Reuters shared in its report.
“While no regional or global halal
cosmetics brand has yet to emerge, the segment is poised for significant
growth, with Muslim spend on cosmetics currently worth US$61 billion in 2017,
and forecast to reach US$90 billion by 2023,” it highlighted.
In Southeast Asia, the region’s large
Muslim population and high awareness about halal products has been driving
demand, with compound annual growth rate (CAGR) of 10.2 per cent forecast
between 2015 and 2020, according to FMI.
By comparison, non-halal cosmetics sales
are forecast at a CAGR of three to four per cent over the same period.
“Over the past decade people have become
more aware about halal, and have better access to information through the
Internet, while the (growth of the) Islamic Economy is enabling more choice.
“Previously, nearly all cosmetics were
brand names from Europe and Japan but today there are good (Southeast) Asian
halal brands,” Fazil Marican, founder of Singapore-based consultancy firm
SimplyHalal was quoted as saying on a post by DinarStandard on Salaam Gateway’s
Global Islamic Economy Gateway website.
According to Salaam Gateway, lucrative
halal cosmetics industry has seen growing demand which led local firms such as
Wipro Unza (Malaysia) Sdn Bhd, Southern Lion Sdn Bhd, and SimplySiti Sdn Bhd to
get halal certification.
It further pointed out that multinationals
such as Johnson & Johnson Sdn Bhd and Colgate-Palmolive’s toothpaste and
mouthwash brands have followed suit, and Japan’s Shiseido Company has certified
28 halal products under its Za brand while South Korea’s Talent Cosmetic Co
became the first Korean company to be halal-certified in Malaysia: making 147
out of its 550 cosmetic products halal.
For Malaysia, being one of the leading
nations in the halal industry and with its highly-regarded halal certification
bodies, the country has an advantage over other regions when it comes to the
halal sector.
“Malaysia was one of the early movers in
halal cosmetics when it actively stepped in to promote the industry around 15
years ago.
“Sales and numbers of products have
gradually risen since then, especially in the past five years, driven by
greater adoption of halal cosmetics in Southeast Asia, where halal sales
accounted for nearly 30 per cent of the overall market, according to research
company Future Market Insights,” said Salaam Gateway.
Nevertheless, it also pointed out that
certification, while highly-regarded, remains an issue.
“The lack of a universal halal standard for
cosmetics is hindering growth, and at the regional level companies also have to
get local certification to export to different markets,” it said.
However, it stressed that Malaysia is
rising to the challenge by developing guidelines for halal cosmetics ? a global
first ? similar to the MS2424:2012 Halal Pharmaceuticals General Guidelines.
Link->http://www.theborneopost.com/2019/03/03/meeting-demands-of-the-halal-industry/
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