Industry News

JakartaIndonesian companies in the consumer and real estate sectors are concerned about a new regulation that came into effect this month requiring products to beHalalThe certification regulations are expected to bring growth opportunities to Indonesia both domestically and for exports.

The government will require food and beverage companies and their raw material suppliers in the world's most populous Muslim nation to Obtained from the Ministry of Religious Affairs before October 17HalalCompanies that fail to meet the requirements will face fines or have their products removed from shelves.

According to government officials, while most large companies are expected to meet the deadline, many micro, small and medium enterprises (most of which are in the informal sector) areindustryOperation) Discovery，andbureaucracyDealing with institutionsChallenging and costly to address.TheseFree distribution for the industry 1 million certificates and gave them an additional two years to meet the requirements. It is expected that the regulation will be applied to other sectors in the coming years.

“A company’s application can take months to process and is costly, especially for small and medium-sized enterprises,” said Del Vionico, a marketing officer at Kecap Korma, an Indonesian food company whose sauce products have been certified.

Industry insiders said that considering IndonesiaWith more than 85% of the population being Muslim, obtaining certification is worthwhile. “Despite the high cost, we believe it is important to obtain certification because it makes it attractive when distributing products to supermarkets and major retailers,” Del Vionico said, adding that uncertified products have limited sales channels, such as traditional markets, where prices are generally lower.

Mondelez InternationalAdinda Maharani of Mondelez International Indonesia said: “IntroducingHalalCertification will help us expand sales because most people in Indonesia are Muslims and consumers always check if the product isHalal。”

Maharani said consumers' concerns about whether products are halal should now be resolved, prompting them to buy more products. Mondelez, one of the world's largest food and beverage companies, has many brands certified, including Kraft cheese products, Cadbury and Oreo.

After October 17,HalalProducts can still be sold in Indonesia, but they need to be labeled accordingly. These products must be marked on the packaging as non-Halalcomponent.

Senior Lecturer in Marketing, National University of Singapore Business SchoolSamer Elhajjar said: “This move aims to boost the confidence of domestic and foreign consumers and promote Indonesia as aHalalLeader and top producer of products.”

Businesses appear to be embracing this goal.（Dellvionico）Say, althoughKecap Korma is currently focused on the domestic market, but it is considering exporting to markets such as Malaysia, which has a similar food culture to Indonesia and a population of more than 20 million Muslims.

Meanwhile, local land developer Modern Industrial Properties (Modern Industrial Estate believes thatHalalRegulations can help attract those who want to produceHalalForeign investors of products to West Jakarta Banten Province (BantenHalalCertified Industrial Park. Charoen Pokphand Group, one of Thailand's largest business groups(Charoen Pokphand Group) purchased nearly 20% of the total area.

“With the government regulations about to take effect, we recognized this as a huge business opportunity,” said Levina Siatono, the developer’s senior marketing director. “We’ve noticed an increase in inquiries from investors as the implementation of the new regulations approaches.”

She added,“We are considering developing a second industrial park in another region of Indonesia if the government provides the right support and opportunities.”

Indonesian President Joko WidodoJoko "Jokowi" Widodo said the certification exercise is to build people's confidence in Indonesia.HalalPart of the product confidence effort.

Widodo said last month,“It is a big market with huge potential and we must take this into account so that the existing opportunities are not taken away by other countries,” adding that “Indonesia has a good chance to become the worldHalalThe center of industry.”

Ismi-Additional reporting by Ismi Damayanti.