Optimistic outlook for halal industry in 2016

By Viraj Perera

KUALA LUMPUR, Dec 31 ― Approximately 25 per cent of the world’s population is Muslim and it is evident that there are segments of global markets that adhere to their religious requirements.

Halal, an Arabic word defined as permissible according to Islamic law, is required in the consumption of both goods and services for Muslims.

The halal industry is a rapidly expanding sector not only in the food and beverage market but also in many other markets including cosmetics and healthcare.

Halal products are found worldwide but the most rapid expansion is being seen in mainland Europe and the US. Halal has thus become a global market force that spans into meat and poultry, food manufacturing, food retailing, restaurant chains, food service industry, logistics and shipping, Islamic banking and finance, standards/auditing/certifications, science and new technologies and personal care products.

Basic requirements to be considered halal for consumer products

While most products such as food, beverages, pharmaceuticals and beauty and personal care products can entail a halal label, clothing and footwear are an exception, and for services only food service can acquire a physical halal certification.

Although this is the case, it is still necessary for Muslims to lead the halal way of life, which means ensuring their consumption, behaviour, dressing, social interactions and every other aspect is aligned with Islamic beliefs.

Forbidden ingredients of halal foods include animals that are dead or dying prior to slaughter, blood and blood byproducts, carnivorous animals, birds of prey, land animals without external ears, animals killed in the name of anything other than Allah.

From a Muslim consumer standpoint, products are deemed halal when they are produced without any forbidden ingredients, be proven to be in the interest of the consumer’s health and wellbeing, must be clean, hygienic and have supply chain integrity.

They must also benefit the community from which they came and all ingredients must be traceable at each stage of production.

Some global trends in the halal industry

According to a Thomson Reuters report, halal food made up nearly 17 per cent  of the total world food market in 2013.  And according to a report commissioned by the Dubai Chamber of Commerce, the global halal market would be worth US$1.6 trillion (RM6.8 trillion) by 2018, an increase from US$1.1 trillion in 2013 and growing at a compound annual growth rate (CAGR) of 6.9 per cent.

The focus imposed on the halal industry in the Middle East is quite notable in the recent times. The UAE is preparing to cater for the growing demand as the UAE government has recently announced setting up of a “Halal Cluster”, a 6.7 million square feet land in Dubai Industrial City, for firms dealing in halal food, cosmetics, and personal care items.

Methods of discovering “haram impurities” in products are rapidly improving. Now, the type of animals that the raw materials are derived from can be identified using polymerase chain reaction (PCR) ― an advanced molecular biotechnology technique that emerged in the 1980s and evolved into a very sophisticated piece of technology for multiple applications.

The PCR has the potential to greatly improve halal integrity, allowing the development of halal supply chains and product tracking.

Malaysia is the global hub of the halal industry and has set up institutions to determine efficacy of halal, deal with the issues of its standards and certification.

These include Jabatan Kemajuan Islam Malaysia (JAKIM) and the Halal Development Corporation (HDC). Malaysia is a leading exporter of pure Islamic products to Muslim countries, China and Western countries where there is large presence of Muslim population.

While Malaysia is in the lead, the other drivers in the South-east Asia (SEA) region include Indonesia, Thailand, Singapore, Brunei, Philippines and China. It is notable that the cultural diversity of SEA as well as emerging diversities in other regions of the world has led to strict halal standards.

The multi-cultural complexion of SEA has stimulated the development of the world’s most advanced halal standards and certification agencies. This has given rise to an industry of halal certification created to attempt to verify any issues that may arise when considering the true definition of halal products.

The presence of certifying agencies is varied across the world. However, with a variety of international disagreements, unique challenges and varying halal development in each country, a unified halal hub remains the ideal goal for the halal industry.

Muslim government-approved certification bodies could enhance a country’s reliability and accreditation. SEA seems to have taken the lead due to the top three globally recognised certifying bodies within it, and many neighbouring countries are building their eco-systems to achieve similar recognition and reliability.

How can technology help the global halal industry?

As was mentioned above, some technologies such as PCR can enhance halal integrity in foods and beverages as well as in personal care products. As such, there are many existing technologies that can be adopted or newly developed solely for the global halal industry.

Halal technologies include personal devices for checking halal  integrity, for traceability, in conducting site audits for compliance and in transportation.

High technology can significantly boost this emerging trillion-dollar market and such technologies can be developed and deployed for the benefit of this market.

What’s next?

PlaTCOM Ventures ― the National Technology Commercialisation Platform of Malaysia ― spearheaded the Halal Hi-Tech Challenge 2015 this year to support the application of high technology in halal industry.

PlaTCOM will be organising the Halal Hi-Tech Challenge 2016 in the coming months in order to further support this growing industry and further helping Malaysian SMEs to develop their innovations for halal-related applications. Stay tuned for more information in the forthcoming issues.


Sumber - Malay Mail Online