ASIF INTERNATIONAL SDN BHD, Malaysia OPPORTUNITIES IN THE GLOBAL HALAL MARKETBy Abdul Kabur IbrahimPAK - ASEAN WORKSHOP ON HALAL FOOD PRODUCTION11 12 March 2009, KarachiPakistan

GLOBAL HALAL MARKETHALAL means what is permissible in Islam. Halal Food is tayyib slaughtered according to the specific parameters of Islamic law, good, wholesome, healthy, untainted during the stages of processing, packaging, storage, transportation, & cooking

The HALAL Market is fast becoming recognized as a vitally important emerging market sector. It is a new market force that should not be overlooked.

With a global consumer base of about 1.7 billion, the Halal market is estimated to be worth trillions of US Dollars and ripe for the picking, and thus it is time that companies with halal products and services should act fast to reap the potential returns

GLOBAL HALAL MARKETThe reason for this vast thriving market goes hand in hand with halal products being widely recognized for its safety and quality assurance. This worldwide demand is not restricted as consumers also consist of people from diverse races and religious beliefs, thus providing a huge boost to the halal industry

Players from every sector of the industry, from the huge multinationals down to small enterprises are looking to capture their share of this growing market. Nestle, TESCO, Colgate etc are some examples

Currently, the Halal sector is low on available data and research, and the companies that can best understand this emerging market with its complex customer base, plus all the issues relating to certification and standards are likely to be the most successful..

HALAL PRODUCTS

HALAL PRODUCTS

HALAL Products includes both Food & Non Food Items.

HALAL Food is not only Meat and Poultry but also other Food Items such as: - Confectionery- Canned & Frozen Food- Dairy Produce - Bakery Products- Organic Food- Herbal Products- Beverages etc

HALAL PRODUCTS

HALAL PRODUCTS CONTD

HALAL Products also includes Non-Food products such as: - Cosmetics- Toiletries- Beauty products- Pharmaceuticals- Leather products- Perfumes etc

HALAL SERVICES

HALAL SERVICES

Besides merchandise, HALAL Services are also important components of the HALAL market: - Islamic Banking - Securities & Bonds- Travel & Tourism Supply Chain & Logistics Education & Training - Food Services HALAL Logistics is important to ensure that a HALAL product remains HALAL from its origin to the consumer Farm to Fork

SIZE OF THE GLOBAL HALAL MARKET

SIZE OF THE GLOBAL HALAL MARKET

The Global Food Market alone is estimated at USD 600 billion. This amount is calculated based on the world Muslim population of about 1.6 billion.

Although our market analysis is based on Muslim consumers, we cannot overlook the non-Muslim (Cross over markets) consumers/markets. The demand potentials in the non-Muslim countries are even larger.

Again our statistics are based on Food only. If we include other Halal products and services and also the potential non-Muslim consumers, the market could be worth trillions of Dollars.

MARKET OVERVIEW World Muslim Population

ContinentPop 2008 Muslim 2008 % of Muslims (Million)(Million) Africa96746247.8West Asia22519988.3South Central Asia1,68363937.9South East Asia586 22638.6East Asia1,557402.5Europe 735517N. America3326.82.2S. America5773.10.42Oceania330.61.5_________________________________________________________________Total6,695 1,62824.3Islamic Source1,79126.7 Source: www.islamicpopulation.com

MARKET OVERVIEW Estimated Global HALAL FOOD Market Value Region Muslim Pop Per capita foodHALAL Food 2008, Mils expenditure ValueMarket p/a USD Mils USD ________________________________________________________________Africa462 250115,500West Asia 199 570113,430South Central Asia639 300191,700South East Asia226 35079,100E. Asia401757,000Europe (inc Russia)511,25063,750N. America6.8 1,75011,900S. America3.15001,550Oceania0.61,500900_________________________________________________________________Total1628 USD 586,830Source: www.islamicpopulation.com & Euromonitor

MARKET OVERVIEW From a market perspective, the traditional major target markets remain in Asia and the Middle East (West Asia). However, there are influential developing Halal markets in the UK, Europe and the USA with significant market size.

The developing Halal markets of Europe and the US play an interesting role, because they are markets that also play defining roles in other markets around the world

As the dynamics within the Muslim world change, and globalisation trends continue to shape peoples tastes, habit and spending patterns across the world, we are likely to see moves in the developing Halal markets having increasingly influential roles in the established markets of the Middle East and Asia.

Now let us look at the specific markets:

SPECIFIC MARKETSAFRICAN MARKET

Northern Africa (MuslimPopulation)

Egypt 71 mAlgeria 33 mMorocco 31 mSudan 30 mOthers Tunisia & Libya

Western Africa (MuslimPopulation)Nigeria 65 mNiger 14 mMali 13 m

Senegal 11 mIvory Coast 12 mGhana 7 mGuinea 8 mOthers Mauritania & Togo

Central Africa (MuslimPopulation) 17 mCameroon, Chad & DRC

Southern Africa (MuslimPopulation)South Africa 1 m

SPECIFIC MARKETSAFRICAN MARKET CONTD

Northern Africa Northern African countries have more than 90 % Muslims and are ready markets for HALAL products Need to create more awareness on HALAL standards and certification. Currently no HALAL standards or certification exist in these countries Good prospects to export Halal products and services to Sudan, Egypt and Libya

SPECIFIC MARKETS

AFRICAN MARKET CONTD

Southern Africa

Although South Africa is a small market but is an important market for HALAL products. It has four HALAL Certification bodies with various standards Muslims in South Africa are very particular on HALAL products and thus there is a ready market for Pakistani products South Africa could also be a gateway to the other Southern, Eastern and Central African countries. As such Pakistani companies targeting the Sub-Sahara African countries should utilize the South African networking.

SPECIFIC MARKETS

AFRICAN MARKET CONTD

Rest of Africa

Although there is a huge Muslim population in Western and Eastern Africa, the HALAL market is still not developed. HALAL Standards and Certification are not available in this part of the world Countries with good prospects for Pakistani exporters are Senegal, Ghana, Guinea, Nigeria, Ethiopia, Kenya, Tanzania and Mocambique

SPECIFIC MARKETS

ASIAN MARKET - West Asia

(Muslim Population)Saudi Arabia 24 mTurkey 73 mYemen 21 mIraq 28 mSyria 17 mOthers UAE and Other GCC countries, Jordan, Lebanon

Market Review West Asia is a ready market for HALAL products and services. Although there are no specific HALAL Standards in these countries, all products imported or manufactured locally have to be HALAL (whether certified or not).

SPECIFIC MARKETS

ASIAN MARKET - West Asia Market Review CONTD Most of the countries are open for imported products and as such there is intense competition. In these countries the emphasis on HALAL is on Meat products. If the mindset can be changed to include other food and non-food items, then the market could be really huge. In the case of Turkey, it is already promoting itself as the Halal gateway to Europe and are coming with its own standards and certification.

SPECIFIC MARKETSASIAN MARKET South Central Asia

(Muslim Population)India 154 m (220 m)Bangladesh 127 mPakistan 158 mIran 69 mUzbekistan 23 mAfghanistan 30 mOthers Kazakhstan, Kyrgyzstan, Sri Lanka, Tajikistan, Turkmenistan

SPECIFIC MARKETS

ASIAN MARKET South Central Asia CONTD

Market Review South Central Asia is a massive untapped market. Most are Muslim countries but without any HALAL standards or certification Pakistani exporters should target this region especially Iran and all the Central Asian countries

SPECIFIC MARKETS

ASIAN MARKET East & ASEAN

China 39 m (130 m) (Muslim Population)ASEAN 226 m (Indonesia - 195 m, Malaysia - 15 m)

Market ReviewASEAN countries are one of the worlds leading suppliers and also importers of HALAL certified products in the world. Although these countries compete in the international front, there has been substantial trading in HALAL products among them. For example Indonesia is the biggest buyer of Malaysian HALAL food. China is a huge and an untapped market.

SPECIFIC MARKETSNORTH AMERICAN MARKET

A market of 6.8 million Muslims who are looking for HALAL products. However HALAL products are not readily available in this market. The following illustrates the potential for HALAL products in the US market: The US Kosher market, with a Jewish population of 5 to 6 million, has been valued in excess of 100 billion USD annually. There is a range of 86,000 certified kosher products on the supermarket shelves.However, in Mintels recent survey in the US shows that only 15% of the kosher product customers are Jewish. 55% buy kosher because it is perceived to be healthier. 38% are vegetarian, 24% want dairy-free. And 16% are Muslim!

This shows that Muslims consume more Kosher products than the Jews

SPECIFIC MARKETSWhy?

Because there are only 1,000 Halal certified products available, and most are not available through the mainstream retail outlets.

So for every Halal product on sale, there are 86 kosher products to choose from! There are simply not enough Halal products on the shelves!

US Muslims are spending$16 billion a yearon Kosher products

Wouldnt they prefer to buyHALAL products?

SPECIFIC MARKETSEUROPEAN MARKET France 6 m (Muslim Population)UK 1.5 mGermany 3.1 mRussia 27 mBosnia 2.34 mOthers Ukraine, Albania, Italy, Netherlands, Bulgaria

Market ReviewRelatively a small market but a serious market with high purchasing power Good prospects for Pakistani Exporters in UK, France and Germany Russia and Other markets need to create awareness

MARKET FEATURES Since everyone is noticing Halal now, the competition for the Halal sector is getting intense. Halal is more and more a complete range of product offering in supermarkets chains worldwide, as well as in 5-star hotels and restaurants and fast food chains, airline meals, school dinners, military and even prison rations. We see this phenomena applying not only on food items. Personal hygiene and healthcare products, toiletries and cosmetics are all appearing as Halal options. Once Halal is understood as a lifestyle choice, the range of option increases exponentially.

So the question naturally arises, where to find Halal certified products? Because most of the Muslim majority countries do not consider Halal-certification necessary or have not done till now they cannot provide Halal certified products to the international markets.

MARKET FEATURES Because with the movement of Halal products around the world, the increase in awareness of Halal in general, and in turn added value surrounding Halal, and of the holistic and interdependence of the entire Halal value chain, we are seeing entirely new sectors emerging, relating to Halal logistics, security, auditing and industrial development.

With major investment in Halal production and manufacture at one end of the chain, and major investment in the retail sector at the other end, maintaining the integrity of the Halal chain at all points in between is becoming increasingly important.

The Halal integrity in the handling, storage, warehousing, and transportation by road, sea and air of Halal certified products, and also dedicated Halal-certified zones are fast becoming a reality.

MARKET FEATURES The creation of controlled Halal only industrial food parks, free zones, DistriParks will be part of the future of this Halal industry. As the market demand continues to increase, more links in the supply chain will be created.

LIMITATIONS LIMITATIONS & CHALLENGES

Currently there is no single standard that is recognised worldwide. There are also numerous Certification bodies worldwide, of which their recognitions vary from country to country. The World HALAL Council which monitors the various Certification bodies has not been able to come up with a single standard for its members. Lack of data on HALAL Trade - There is no proper classification of HALAL products under the Customs code and as such data on actual trade are difficult to obtain

Most Muslim countries do not impose Halal Certificate as a compulsory requirement In Pakistan there is no recognised Halal Certification body and as such its products may not be accepted in some countries

OPPORTUNITIES & RECOMMENDATIONSOPPORTUNITIES & RECOMMENDATIONS There are ample opportunities for Pakistani Companies/organisationsto develop its Halal Industry and to tap the expanding Global HalalMarket. Pakistan should develop its own Halal Standard (probably with the assistance of ASEAN countries) and a Certification Body which should be recognised by the World Halal Council and its members. There is a big potential for Pakistani Companies to manufacture and export Halal Certified products to the world market.

OPPORTUNITIES & RECOMMENDATIONS- There are about 1.7 billion Muslim consumers of HALAL products in the world. The number is increasing rapidly. With increasing awareness, more and more countries are requesting for HALAL certified products. The demand from non-Muslims are also increasing. - More and more Supermarkets and Hypermarkets are adding HALAL Shelves to attract ethnic Muslim population in non-Muslim countries egs. TESCO in UK and CARREFOUR & AUCHAN in France - Around 80 per cent of the Halal food industry is in the hands of non-Muslims. The Brazilians have been big halal producers for decades. Three-quarters of chickens exported by France are halal. Being a Muslim country, Pakistan is in a more advantaged position to tap this growing Halal market

OPPORTUNITIES & RECOMMENDATIONSPakistan could promote itself as the Halal Gateway to Central Asia and the Middle East. This would attract investments into Pakistan in Halal products manufacturing especially from non-Muslim countries which are eying on these markets. By developing its infrastructure and facilities such as Halal Parks and Logistics, Pakistan could be a Regional Halal Hub in the South and Central Asian region. This would further attract investments and increase in exports. There are also opportunities to develop Halal Tourism in Pakistan Halal Tourism Activities, Halal Airlines, Halal Restaurants and Halal Compliant Hotels

OPPORTUNITIES

Pakistan is also encouraged to develop itself as a centre for Halal Research, Science and Technologies, which could give the country more credibility in the International market. Huge potential for Islamic Financial services, which is an ally of Halal. Pakistan is already becoming an important player in Islamic Finance.

Thank You HALAL is on the move. It is being reborn into the age of globalisation, and indeed, globalisation suits the nature and quality of HALAL. HALAL is made to be global. HALAL is for everyone.

THANK YOU