Finding a niche in global halal product market By Ashfak Bokhari

PAKISTAN is still struggling to find a niche in the global market for halal products which is growing at a fast pace and was worth $632 billion in 2009.

Although there has been some tangible efforts by relevant government agencies and foreign institutes to encourage our entrepreneurs to focus on halal products, not much progress has been made.

There are two erroneous assumptions keeping them virtually indifferent to the best global business practices. One is the poor awareness about the full range of halal products. Most of the Pakistani businessmen in the sector focus on halal meat while ignoring such items as halal cosmetics, toiletries, medicines etc in demand in the international market.
Another assumption is that since Pakistan is a Muslim country, products exported from here must be presumed to be halal whether they carry the ‘halal’ tag or not. A recent survey by Halal Development Project (HDP), a Pakistani NGO, in China and Africa showed that Muslims there were not familiar with famous Pakistani brands and refused to buy Pakistani products for not carrying a certified halal logo on them.

Muslim consumers want to be assured that food and beverages they are consuming fully comply with Islamic preparation requirements. Since this market has grown more sophisticated, the producers are required to confirm that all ingredients in their food products are fully certified.

A major problem hindering growth of halal exports in Pakistan is the absence of halal standards. There is no official halal certification body in the country. Some international halal cerification companies have offices in Pakistan and their agents can test and certify the Pakistani products as halal after inspection. For instance, Islamic Dawah Council of Philippines (IDCP) has launched a certification programme for Pakistani exporters in collaboration with a Pakistani NGO, Halal Industry Research Centre (HIRC).

IDCP is recognised in many countries for its Halal certification services. Under this programme, HIRC will conduct the local operations including pre-inspection visits, lab testing, survelliance audits, shariah rulings for the certification programme while IDCP will issue its certificate to the client after satisfactory results. It has certified many clients from India, Japan, China, Philippines and Malaysia.

In recent years, a number of Asian nations outside the Middle East have begun to emerge as centres for halal standardisation, research, testing, production and international trade. Malaysia is on its way to become an international halal hub and has hosted the World Halal Forum annually since 2006. At the close of the 4th WHF in 2009, a decision was taken that the International Halal Integrity Alliance (IHI Alliance) should develop the remaining modules of the International Halal Standard – a single standard to unify the fragmented industry and ensure global halal integrity. At the 5th World Halal Forum to be held on June 21-22 at Kuala Lumpur, the remaining six modules will be released for the first time for general discussion for six months. The World Halal Forum has become the ultimate forum for market leaders and experts to chart the future of the industry.

Halal Development Project has, meanwhile, initiated a project to make Pakistani exporters aware of halal standards, certification, branding, marketing, investment promotion, industry development and updates. The Board of Investment has also offered to help the HDP in this respect as the world standard certification of Pakistani food products would definitely enhance their exports. Chairman of the Board Saleem H. Mandviwalla said at press conference in February that Pakistan was already exporting meat, but if it was certified at par with world standards, it would enhance its monetary value and also would be more in demand.

On December 5, Federal Minister for Science and Technology Azam Khan Swati announced the establishment of Pakistan Halal Products Development Board (PHPDB) to facilitate businessmen in adapting to halal industry and its exports. The board will work as an autonomous body under the auspices of Lahore Chamber of Commerce and Industry. It will have links with the OIC-run Islamic Chamber of Research and Information Centre (ICRIC) and will be attached to the ministry of science and technology. How effective this board will be in the development of halal industry in Pakistan remains to be seen.

Meanwhile, countries like Malaysia are establishing halal industry parks to ensure that all food processing remains safe from non-halal sources. Recently, it opened a 9,000-hectare halal park in the region of Sarawak, to focus on prawn and fish farming, as well as poultry, agriculture and processing industries.

In January, Malaysian Minister for Agriculture Seri bin Haji Omar visited various private sector slaughter houses in Pakistan and held meetings with the Food and Agriculture Minister Nazar Mohammad Gondal to discuss meat imports from Pakistan. Pakistan has just started exporting halal meat to Malaysia. It is interesting to note that the Malaysian government is importing two-third of its meat requirements from India. So, Malaysia could import at least 60,000 tons of meat from Pakistan if it chooses to do so.

Currently, Southeast Asia and the Middle East are the two major markets for halal products. All major US poultry processors export to these markets. The primary sources of beef in those markets are Australia and New Zealand, whose governments are very supportive of halal programmes.

Marketing efforts to supply certified halal products throughout the world are gaining momentum. Many companies are looking at halal concept as a new tool for marketing. Manufacturers are cashing in on the concept that virtually all goods and services can be certified halal, including cosmetics, pharmaceuticals, clothing, financial services and even tour packages.

Like their conventional counterparts, halal cosmetics including lipstick, deodorant and alcohol-free perfume can contain animal ingredients but they must be prepared according to Islamic codes on slaughter and preparation. Even the small amount of collagen in night cream is derived from halal sheep raised at a Muslim-run farm in Australia.

There is a strong demand for halal products in a number of non-Muslim countries. These include India (140 million Muslims), China (40 million Muslims), United States (roght million Muslims), Philippines (six million Muslims), France (six million Muslims), Germany (three million Muslims) and the United Kingdom (1.5 million Muslims).

Source: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/in-paper-magazine/economic-and-business/finding-a-niche-in-global-halal-product-market-760