Industry News

After Jacob Star's 2014 FIA International Halal Forum made headlines in China Pharmaceutical News, many news websites quickly reprinted it:

Halal food exports have broad prospects

According to the 2009 global population statistics, the world's population stands at 6.8 billion, of which 1.57 billion are Muslims, accounting for 23.4% of the world's population. Muslims are spread across over 200 countries and regions, and their number is growing rapidly. According to Islamic law, Muslims must follow a halal diet, creating a huge and growing demand for halal food. The global halal food market is reportedly worth over $650 billion annually and is growing rapidly alongside population growth.

This market, with its enormous potential, has attracted the keen attention of halal food manufacturers worldwide. However, this market is currently firmly dominated by countries like Brazil and Australia, with China holding only a tiny 0.14% share. At the 16th "Food Ingredients Asia 2014" recently held in Shanghai, how Chinese food companies can expand into the global halal food market became a hot topic for many companies.

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When people think of halal food, they often think of the aroma of lamb skewers or ramen noodles wafting through the streets, or of hot pot hotpot enjoyed by friends and family around a fire in the cold winter months. However, the definition of halal food is extremely strict, with Islam establishing detailed regulations for foods and ingredients. According to Islamic law, halal food is "lawful, clean, and pleasurable food according to a set of Islamic dietary laws" and must not contain blood, alcohol, or narcotics.

"In other words, halal food is defined as absolutely safe, free of non-halal or unhealthy ingredients and raw materials, and the equipment used in the processing and manufacturing process is not permitted to contain non-halal ingredients," said Yang Xiaocui, General Manager of Shenzhen Jacob Star Biotechnology Co., Ltd., China's first internationally recognized halal certification agency. Halal food manufacturers must meet halal standards for their products, and all raw materials used in production must be halal certified. Products and raw materials must be processed, manufactured, and packaged under high standards of cleanliness and hygiene. Products and raw materials that are contaminated or cross-contaminated with any non-halal substances must not be used.

Therefore, domestic halal food manufacturers first face a crucial hurdle to entering the international market: halal certification. Yang Xiaocui explained that currently, the global certification brands include the Singapore government's MUIS halal certification, the Malaysian government's Jakim-Halal certification, Indonesia's MUI halal certification, and the US-based IFANCA halal certification. Exporters should check with the importing country's government to determine which organizations are recognized as halal certification bodies for specific products.

It's not easy for companies to obtain Halal certification. According to reports, applicant companies must pass a rigorous on-site production audit by a certification officer to obtain qualification certification, obtain a "pass" to export to the halal market, and use the halal label on the product's outer packaging. Even if they pass the audit, they should not take it lightly. "Internal management and integrity building are particularly important for halal food companies. For example, in halal food, the content of additives such as flavors and fragrances must not exceed 0.5%, and alcohol can only be used to clean and disinfect factory equipment. Therefore, companies need to keep various taboos in mind when producing halal food, especially not mixing taboo products with halal food to avoid cross-contamination. If a product is found to contain non-halal food ingredients, alcohol content, or excessive additives by the port of entry, it will be immediately rejected, causing significant losses to the company. In addition, if a company commits serious violations, it will be placed on the "blacklist" of all Muslim markets," Yang Xiaocui reminded.

The market is vast and has huge potential

Becoming a halal food company is not easy, with numerous ingredient restrictions, strict production processes, and rigorous inspection and certification. However, the boundless business opportunities offered by halal food are attracting food manufacturers worldwide. It is understood that the global Muslim population is primarily distributed in the Middle East, Southeast Asia, and Central Asia, with the largest number in Asia. Halal food's potential stems from this rapidly growing Muslim population. "Currently, halal food accounts for approximately 25% of the global food market, and this is projected to reach 30% in the future," Yang Xiaocui explained.

Data shows that Malaysia is a global leader in developing the halal food industry, raising standards to the highest level. In 2013, Malaysia exported halal food worth $9.8 billion, making it one of the largest halal food suppliers to the Council of Islamic Cooperation (COIC). Following the 2008 financial crisis, Singapore became a bellwether for the global halal product market, experiencing 10% annual growth. Halal food is now readily available in supermarkets, and the number of halal restaurants has increased rapidly. American food manufacturers such as Kellogg's and Hershey's also plan to build halal production plants modeled after Malaysia's. Indonesia, home to the world's largest Muslim population, plans to establish a halal production center in 2015. A quarter of Thailand's food factories already produce halal food. The Gulf States in the Middle East, facing food shortages and heavy reliance on imported food, hold the world's largest potential for a halal food market.

"The raw materials and ingredients used by halal food companies can also be used by ordinary food companies, while the raw materials and ingredients of ordinary foods cannot be used by halal food companies. Therefore, if food raw material manufacturers successfully enter the halal market, they can obtain broader development space through local food processing companies." Yang Xiaocui introduced.

Furthermore, in Muslim-majority countries, halal food sales and industries are growing steadily. Furthermore, even in countries where Muslims are not the majority, the food industry produces a significant amount of halal food. For example, in the United States, the halal food market has reached a total value of $20 billion. The halal food market in Europe is also growing rapidly.

China has unique competitive advantages

Because Southeast Asia is home to a significant Muslim population, halal certification agencies are also concentrated there. "In 2009 alone, MUIS certified 65 food companies as halal, compared to only five per year previously," said Noor Ruhayya, a senior certification officer at MUIS-Warees in Singapore.

"Another significant advantage is that, thanks to the signing of the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN and the establishment of the China-ASEAN Free Trade Area, China has implemented zero tariffs on halal food exports to ASEAN countries. This provides Chinese halal food companies with a price advantage," said Nur Ruhayya. Yang Xiaocui explained that the global halal food market is currently dominated by countries like Brazil and Australia, while China holds only a tiny 0.14% share. However, for less developed Southeast Asian countries, due to low purchasing power and inherent resource shortages, there is a significant demand for halal food. Brazil and Australia are both too far away, while China, with its natural geographical advantages and low transportation costs, offers a significant price advantage. Combined with the zero tariff policy, these favorable conditions will make Chinese halal food highly competitive in the ASEAN market.

For wealthier countries like Saudi Arabia, Dubai, and Singapore, the successful export of Chinese halal food can bring lucrative profits. Yak beef from the Qinghai-Tibet Plateau is popular in the Middle East for its natural, ecological, low-fat, and high-protein content, with export prices reaching tens of thousands of yuan per kilogram.

(China Pharmaceutical News, author: Lu Yue) Intern editor: Xiao Yi