Copyright HDC 2010

THE GLOBAL HALAL MARKET

An Insight into the Halal Opportunities

and Halal Malaysia Certification

22nd March 2011

Diverse Sectors In The Halal

Industry

Halal Product and Services

Food

Ingredient & Additives

Cosmetics

Animal Feed

Drugs and vaccines

Islamic finance

Pharmaceuticals

Logistics

Halal is a

VALUE

PROPOSITION

that exist within

key elements of

the supply chain

of the intersecting

industry sectors

Why go Halal?

Germany has about 3.5 million of Western Europe's 20 million Muslims

According to the European halal control and certification authority in

Ruesselsheim , about 400 companies in Germany offer halal products

There are 1.4 billion muslims worldwide.

Muslims are expected to account for 30% of the world’s population by 2025

Global halal trade is estimated to be $80 Billion or some 12% of total trade in agri-

food products.

Halal certified products are viewed by Muslims as a mark of quality and an added

religious safeguard.

Halal products can be consumed by muslims and non-muslims

Halal as a Value Proposition

Primary Industries Halal Products and

Services

Halal

Compliance

Focus should not be on developing ‘Halal’ industry, but on developing consumer

goods industry with Halal as one of the Value Proposition

Food

Healthcare Logistic Services

Cosmetics Food

Healthcare Logistic Services

Cosmetics

Global Consumer Concerns

CHANGED CONSUMER MINDSET

Better educated and informed

Concerns moving from physical product

attributes to spiritual, social, environmental

and sustainability issues

Media & NGO’s more vocal and active

Reputational risk a huge concern for brand

integrity

Traceability becoming critical

Where are you in the supply chain and

would your customers be happy with your

performance

Source : Courtesy of INTERTEK

Agri-food supply chain – Integrated

Grower/Farmer

Primary production

Processor/Manufacturer/

Packer

Distributor/Retailers/

Consumer

To Fo

rk

From

Farm

GlobalGAP,

Organic, Halal, Non-GMO

BRC-Packaging

Halal, GMP/ HACCP

BRC-Standards

GMP, HACCP HalalTGI, WCA, GSV

“one brand”Certification

(Halal)

“one brand”certificationSupply chain inspections

QMS: ISO 9001, 14001, 22000, OHAS 18001, SA 8000, HACCP,TGI, WCA, GSV

Standards: Organic, Global Gap, non-GMO, etc.

Laboratory Analysis and Traceability

Training, Technical advisory and Capacity Building to International Standards

To Fo

rk

From

Farm

Source : Courtesy of INTERTEK

Halal alone is not enough?

Pollution

Waste

Hazardous Material & Waste

Management

Using the wrong Energy & Global

warming

Source : Courtesy of INTERTEK

Knowing your supply chain?

Don’t associate your products with this?

8Source : Courtesy of INTERTEK

TIDY UP YOUR SUPPLY CHAIN

Associate your products with being Halal and more……..

Source : Courtesy of INTERTEK

Malaysia has the Components of a

Complete Halal Ecosystem

Source : MDS Logistics

DISTRIBUTIONPROCESSING PLANTSSUPPLIERS CUSTOMERS

SECURITY SERVICES

PACKAGING MATERIALS

EXPORTERS

TRADING

IMPORTERS HALAL ANIMAL FEEDCOLD ROOM

MAINTENANCE

ISLAMIC BANKING, FINANCE & INSURANCE

GOVERNMENT MINISTRY AND AGENCIES

CONTAINER CLEANING

ENTREPRENEUR DEVELOPMENT

OIC

R&D FIRMS•FOOD & NUTRITION•PHARMACEUTICALS•COSMETICS

HALAL KNOWLEDGE CENTRECOMPETENCY BASED TRAININGINNOVATIVE & COMMERSIALISATIONPHARMACEUTICALS & COSMETICSAGRICULTURE & ANIMAL HUSBANYISLAMIC FINANCEFOOD & NUTRITION

CERTIFICATION & QUALITY ASSURANCE•JAKIM• MINISTRY OF HEALTH• MARDI•DSM•MOA

Global Market for Halal Products

22%

6%

10%

62%

Sales

Food &

Beverages**

Nutraceutical

Pharmaceutical

FMCG sector

Global market for Halal-potential products, 2005**

• The Halal market has

been quantified as the

target market that can

potentially be captured

• Approximately 67% of

these Halal-potential

products are

categorized as fast

moving consumer

goods (FMCG)

• FMCGs in the

primary meat and

food sectors account

for 62% of the market

Does 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

100% = USD 2.1 Trillion

Cosmetic &

Personal Care

Global Halal Market Value

ASEAN: Future World Halal Base

• Many ASEAN countries have low “per capita trade-able food consumption”. Indication: High potential in future demand.

• Currently, chicken meat intake per-capita in Indonesia is 4 kg/year. Forecast in 7-8 years, increase in intake per-capita to 8 kg/year, demand increases for chicken meat to 1.3 million MT.

• With the increase in economy, rise in ‘disposable income’ and increasing awareness on Halal; Halal products to be traded particularly meat and meat-products will increase ‘exponentially’.

13

ASEAN POTENTAIL

SPECIALTY

PROCESSED

FOOD

Examples of Opportunities in

Processed Food

Products Consumption of Halal Processed Food in Key Import Locations

(US$ Mil)

SINGAPORE SAUDI ARABIA FRANCE NETHERLAND

S

Confectionary 137 658 4,590 1,434

Ready Meals 198 8 3,201 603

Canned Preserved Food 63 311 2,500 396

Chilled Processed Food 48 - 1,122 1,337

Sauces Dressing and

Condiments 54 347 473 559

Total 500 1,324 11,886 4,329

Source: Euromonitor , USDA reports, 2007

10 % of these market space would constitute US$ 1.8 billion in potential revenue for the Halal

Industry player who chooses to capitalise on it

Potential Of Halal

– Processed Food Products

Based on 6 countries from EU, Asean and GCC

Canned/ preserved food 13%

Chilled processed food22%

Confectionary30%

Frozen processed food9%

Ready meals14%

Sauces, condiments, dressing

12%

Potential of Sales of Processed Food (2010)

Source: Eurostat, Euromonitor, Data Monitor, Industry sources & GFRA Analysis (2008)

HALAL

INGREDIENTS

Global Market for Ingredients by

Country, 2005

Total Market Value US$ 30.4 billion

Source : Euro Monitor and RTS Resources, 2005

Top 10 growth segments for food ingredients, 2005 to 2010

Rest of the World 43%

France 4%

USA 29%

China 10%

Germany 7% Japan

7%

100%= USD 30.4 bil

Halal Ingredients

A significant portion of the value-add (up to 75%) of FMCG is in ingredients.

Potentially halal products become non-halal through the use of non-halal

ingredients

Global market for ingredients was USD30.3b in 2005, and is expected to rise

to USD34.2b in 2010.

Specialty ingredient industry dominated by MNCs for example Danisco, Kerry

Ingredients, and Barry Callebaut.

Consumer goods ingredients – 4 categories

Core Commodities Functional ingredients, e.g. Food additives Active ingredients, e.g.

Flour Foaming agents Colouring Anti-bacteria agents

Cocoa Anti- caking agents Flavorings Anti- aging agents

Hydrogenated vegetable fats

Binding agents Fragrances Cholesterol reducing agents

Preservatives

1

2

3

4

5

Opportunities for Palm Oil

Potential

ingredients from

palm oil

Potential use Status of commercialization

Functional

Lycopene

Beta Carotene

Tocotrienols

Nutriceuticals, fortified

food and beverage,

cosmetics

Commercialised by local

companies but with limited

scale and export quality

Enzymes

Lipase

Coenzymes Q10

Cheeses

Cosmetics

• Not yet commercialised

• Not yet commercialised

Chemicals

Glycerin

Di & Mono

Glycerides

Sodium Laureth

Sulphate

Soap, lotions and cream

Emulsifier

Bath shower and shampoos

Mainly available in countries

with access to vegetable

oils. In markets such as

Australia, UK, chemicals

are generally of animal

origin

Texturizer

Animal fat

replacer

Sausages and burgers Commercialised by a local

company and used in all

their chicken based

products

There is potential to link to the palm oil plantations sector in Malaysia, and tap on R&D that has

already been performed by institutes such as MPOB. This will increase the capacity for local

companies (such as Flavour Inn Corporation and Green House Ingredients) to innovate and foster

collaborations with MNC consumer goods companies

ANIMAL

HUSBANDRY

Animal Husbandry

For beef, global exports are dominated by Brazil, Australia and

Argentina, accounting for 65% of the market in 2005

Global poultry export is dominated by Brazil, U.S.A. and the

Netherlands, accounting for 70% of the market in 2005

1

2

Potential Of Halal

– Meat Based Products

Based on 6 countries from EU, Asean and GCC

Canned/ preserved

meat & meat

products

4%

Chilled processed

meats

80%

Frozen processed

poultry

6%

Frozen processed

red meat

7%

Frozen pizza (meat

based)

3%

Potential of Sales of Meat-Based Products (2010

Source: Eurostat, Euromonitor, Data Monitor, Industry sources & GFRA Analysis (2008)

Global Halal Market Opportunities

New Clusters Potential Values for Halal Market

(Based on 5% of Global Trade)

Cosmetic/Personal Care USD$ 177 Billion

Agriculture USD$ 41.5 Billion

Pharmaceutical USD$ 30.3 Billion

Islamic Finance USD$ 25.0 Billion

Logistic USD$ 0.17 Billion

Travel Industry USD$ 0.13 Billion

Total Values for Halal New

Growth ClustersUSD$ 274 .1 Billion

Potential Growth Clusters

There is a Captive Muslim Market

in Germany

World Muslim Population (Millions) European Muslim Population (Millions)

Muslim constitute 20% of the world population

Source : Global Mapping International Source : www.islamicpopulation.com

Target Markets for Halal Producers

WHERE IS MUSLIM PURCHASING POWER? WHERE ARE MUSLIM CONSUMERS?

Source : Addressing the Muslim Market, A.T Kearney

Largest MuslimPopulation

Largest Muslim % of Total Population

Highest Purchasing Power Of Muslim Population

Indonesia Bahrain Saudi Arabia

Pakistan Kuwait Turkey

India Saudi Arabia Iran

Bangladesh Algeria Malaysia

Turkey Iran Qatar

Egypt Oman Russia

Iran Turkey France

Nigeria Yemen Libya

China Tunisia UAE

Ethiopia Iraq United States

Algeria Libya Algeria

Morocco Pakistan Singapore

Sudan UAE Indonesia

Afghanistan Qatar Egypt

Iraq Egypt The Netherlands

Average growth of Muslim Population:

1.8% p.a

Worldwide Muslim population : 1.56

billion

Asia (870 million)Middle East (190

million)

Africa (443 million)

Europe (51 million)

Northern Europe (2 million)

Western Europe (10 million)

Southern Europe (9 million)

Eastern Europe (29 million)

North America (7 million)

South America (3 million)

HALAL

CERTIFICATION

IN

MALAYSIA

Halal Certification in Malaysia

Application /

Document Approval

Premise Inspection /

Audit / Lab

Panel / Appeal

Committee

Issuance of Halal

Certificate

Monitoring &

Enforcement

What does this mean for Halal

Suppliers?

Need to demonstrate your business credentials

Move from thinking

To being Halal Certified

To act Green

To act Socially Responsible

To ensure facility Security is in place

To ensure Product Safety is in place

Supply chain traceability is required

Farm to Fork

Raw material to final product

Source : Courtesy of INTERTEK

Halal Industry Development Corporation (HDC)5.02, Level 5,KPMG Tower, First Avenue, Persiaran Bandar Utama,47800 Petaling Jaya, Selangor Darul Ehsan,Malaysia.

Tel : +603 - 7965 5555Fax : +603 - 7965 5500

Hotline : 1800 - 880 - 555 (within Malaysia)+603 7965 5400 (outside Malaysia)

www.hdcglobal.com