The Global Market Potential of Halal

1. The Global Market Potential of Halal International Conference & Expo on Halal Industry Lahore, Pakistan Presented by: Abdul Malik Kassim State Minister for Religious Affairs, Domestic Trade And Consumer Affairs, Penang, Malaysia Presented at Halal Research Council Conference www.halalrc.org Held at Expo Centre, Lahore - Pakistan

2. Global market potential of Halal • World Muslim population of 1.83 billion in 2009 out of 6.5 billion World population • With average annual growth rate of about 1.80% per annum. approximately 117,000,000 per yr. increase which does not include conversion which on the rise currently. • Global Halal products market is estimated at US$2.3 trillion excluding Islamic banking. * F&B (67%), pharmaceutical ( 22%), personal care & cosmetics ( 10%) • If we include service sectors for the Halal market, the potential size of total market is ASTRONOMICAL…

3. Global market potential of Halal • The trade in Halal food is enormous with est. annual halal food value at US $347 billion globally • HALAL – lucrative market and huge opportunities. • Awareness and interest in Halal products has increase tremendously among Muslim and Non-Muslims as well. • Huge purchasing power among Non-Muslim countries. • Consumer’s views on Halal products are not only confined to religious viewpoint but theCONFIDENCE that comes with the Halal Branding. • Halal : HEALTHY, WHOLESOME & HYGIENE

4. Muslim populations by Region PEW Research Centre’s Forum on Religion & Public Life.Mapping the Muslim Population. October 2009

5. MUSLIM POPULATIONS BY REGION

6. Halal Market • Key Halal Market • Algeria Bahrain Egypt Indonesia Iran • Iraq Jordan Kuwait Lebanon Malaysia • Morocco Oman Qatar Saudi Arabia Syria • Tunisia Turkey UAE Yemen Pakistan • Combined population of key Halal markets : 652 Million • Key Halal Markets in Non-Muslim countries • India 140million France 6 million • China 40 million Germany 3 million • USA 8 million UK 1.5 million • Phillippines 6 million Canada 800,000

7. Regional Halal Market Value • Asia Malaysia • Country with a majority Muslim population (60.4% Muslim of a total population of 27 million ) ( Source: Department of Statistics 2008) • Becoming an international halal hub • Malaysia is well-positioned in being the leader in developing the Halal industry. • In the midst of helping out to set global standards for Halal certifications. • Best example in the world in terms of rationalization for the labeling of Halal food (source: UN)

8. M’sia’s active role in the OIC and position as the home of the Islamic Financial Services Board (IFSB) enhance M’sia as the market leader in the provisioning of halal products and services throughout the world. • Thailand, known as World’s Halal Kitchen, is currently the fifth largest halal food exporter and recognized as Halal centre of excellence in science and testing. • Even Muslim minority countries in Singapore have shown that the halal food business is good business. • The Muslim community forms only 16% of the 3.8 million population in Singapore, the halal food industry is big business in this cosmopolitan city. Mc Donald’s, A&W, KFC and Taco Bell are some international brands that have gone 100% halal in Singapore.

9. Brunei is currenly co-operating with Australian companies in order to combine its role in the Muslim world with Australia’s track record in safe, high quality food production. • China is one of the world's most eye-catching halal food markets, as Muslims there total more than 30 million, or 2.3% of China's population • Growing demand for halal food - Ningxia and Gansu provinces and in Inner Mongolia • The key advantage of the Chinese Halal industry is access to cheap labor.

10. Regional Halal market value • Europe • Largest Muslim population after Asia and Africa • The market size of halal food in Europe ~15 billion Euro this year (est) • Has high purchasing power, rather than population size.Therefore, the European Halal market carries a lot of potential for good exporters. • 51.2 billion Muslim population in 2009 with France having the largest Muslim population ~5.86 million

11. The European Supermarkets are now aggressively pursuing the Halal food retailing. • The port of Rotterdam is currently creating a “HalalDistriPark “ to serve 30 Million Muslims in Europe. • The proposed £150m Super Halal Industrial Park (SHIP) at South Wales , would make UK the landmark Halal centre for the region.

12. Regional Halal market value • United States According to the Islamic Food and Nutrition Council of America, the U.S. halal market is estimated at $17.6 billion • The top 10 major halal food markets are: 1. New York City, New Jersey and Long Island metropolitan areas 2. Los Angeles 9. Atlanta 3. Chicago 10. Washington D.C 4. Detroit 5. Houston 6. Dallas/Forth Worth 7. South Florida 8. San Francisco

13. Africa • South Africa, also known as the “rainbow nation” due to its diverse population, has also been actively hosting events focussing on Halal as a viable business concept. • With a Muslim population of approximately 1 million, South Africa is playing a major role in developing the regional Halal industry in Africa and is constantly seen as the gateway to the immense African market. • Middle East • Net importers of processed food both for the food service and retail markets. • Members of the Cooperation Council for the Arab States of the Gulf (GCC)

14. Have higher incomes and consequently higher per capita rates of consumption.Therefore, the region must import 80% of its food requirements. • Saudi Arabia and the UAE ~ most important import markets in the region. Currently Brazil is the largest exporter to the two countries followed by the EU and the US. • Saudi Arabian companies involved in the Halal industry include Al-Radwa Farms, Al- Watania, Supreme Foods, Nash Meat and Sunbullah. UAE companies involved in the Halal industry include Al-Islami Foods, Al-Babeer, Al-Areesh, Arctic Gold, Royal Meat and Emirates Meat. • Turkey is a growing Halal market and as a potential supplier of Halal products, particularly to EU counties with large Muslim populations such France and Germany.

15. Key Players in the Halal Industry • Nestle – world’s largest food manufacturing corporation • McDonalds – the world’s largest leading restaurant chain • KFC– fully integrated poultry chain • Tesco & Carrefour– world’s number one & two retail chain • Port Rotterdam – Europe’s largest & the world’s 3rd largest port • Westports – one of SEA top 10 ports • MISC – the world second biggest shipping company • CIMB – SEA biggest investment bank • Allanasons – India’s biggest meat exporter • Al-Islami – UAE halal food produces

16. “It has been assumed that the trouble soon to be faced by the Halal market is shortages of demand, but contrary to prior believes, the shortage is on the supply, not the demand”

17. PENANG INTERNATIONAL HALAL HUB (PIHH)

18. PIHH VISION • LOCATION of choice for Halal investments, businesses and industries • DESTINATION of choice for Halal/family-concept tourism • RESIDENCE of choice for Halal/Family-concept lifestyle and sustainable living Kuala Muda Kepala Batas Bt. Feringghi Tg. Bungah Tg. Tokong Telok Bahang G’town Feri Sg. Pinang Ayer Itam Jelutong B’worth Seberang Jaya Bukit Mertajam Gelugor Balik Pulau Sg. Nibong Bayan Baru Bayan Lepas Pulau Jerejak Pulau Betong Pulau Gedong Simpat Ampat Batu Maung Pulau Aman Sungai Bakap Nibong Tebal The whole Penang State is the Halal Hub!

19. CLUSTERS @PIHH INDUSTRIES (Manufacturing) R&D AGRO-BASED FINANCE LOGISTICS HUMAN CAPITAL LIFE SCIENCES (Bio-tech/ Medical/ Wellness) MARKETING HOSPITALITY & TOURISM SUPPORT SERVICES Holistic supply chain

20. LOGISTICS CLUSTERS @PIHH INDUSTRIES (Manufacturing) • INDUSTRIAL PARKS • Ready Halal Park for investors • World-class Manufacturing • One-stop investor facilitation services • Availability of Incubators/ Test Labs / Shared Services • Strong supply chain and support services • LOGISTIC HUB • Penang Port – Halal Status • Halal warehouse and cold chain facilities • Extensive ground infra • Southern Thailand >Penang < Singapore • North Sumatera-Penang • CERTIFICATION • HALAL Malaysia Certification • HALAL Malaysia Accreditation • Global standards (MS 1500, HACCP, GMP, BIHAPS, HAL-Q) HALAL Integrated Industry

21. INDUSTRIAL PARK • Penang International Halal Park @ Penang Science Park • Focusing on attracting investments of strategic, niche and high technology industries from F&B, ingredients (i.e additives, enhancer) personal care and cosmetics to be located in the park • With ready land available, and a dedicated agency (Halal Penang) to promote the parks, Penang has attracted investments from China, Iran, and India to set up business at the halal park. • SHIP ( Super Halal Industrial Park Ltd) • Partnered with a venture-capital firm in UK to set up European’s first industrial park for Islamic goods. • The proposed £150m SHIP would provide services such as storage, product packing, meat selection and processing as well as R &D. • Halal Penang will provide advisory and development support throughout the project • Other Halal Industrial Parks • Form partnerships with representatives from Yemen, Medan, Indonesia and Pakistan in providing consultancy and other supporting services to develop halal industrial parks in respective countries

22. INDUSTRIES (Manufacturing) • Gelatine • Untapped Halal market potential • Only 0.7% of the gelatine produced in the world is deemed Halal • Commonly used as a gelling agent in a wide variety of industries including food, pharmaceuticals, photography, paper and fertilizers as well as elastic and adhesive materials. • About 42.4% of the world production of gelatine use pig skin, another 29.3% use bovine hides while bones constitute 27.65% as its source material. • Penang is looking for partners to invest in the gelatin production, which is considered critical and strategic project. Source : halalgel.com

23. INDUSTRIES (Manufacturing) • Food additives and Food Enhancer • Food additives are defined by the European Community (EC) is “any substance which are not normally consumed as food in itself and not normally used as a characteristic ingredient of food whether or not it has nutritive value, in the manufacture, processing, preparation, treatment, packaging, transport or storage of such food results, or may be reasonably expected to result, in it or its by-products becoming directly or indirectly a component of such foods". • Categories includes : Common additives: • emulsifiers, i. salt • thickeners, ii.sugar • anti-oxidants iii. vitamin • Colouring iv. starches etc • flavour enhancer etc.

24. INDUSTRIES (Manufacturing) • FOOD ADDITIVES’ ECC-CODES (E-CODES) • E-numbers represent specific food additives, used by the food industry in the manufacture of various food products. • Formulated by the European Economic Community (EEC) and are universally adopted by the food industry worldwide • Many E-numbers contain unlisted haraam ingredients in them. Generally derived from animals and insects.

25. INDUSTRIES (Manufacturing) Additives which are ALWAYS of animal origin, are HARAAM such as: • E120 Cochineal : a red colour obtained from female insects • E441 Gelatine : derived from the bones and/ or hides of cattle and/ or pigs • E542 Edible Bone Phosphate : an extract from animal bones • E904 Shellac : a resin from the lac insectWhilst some additives with a common code such as E47, can be either of animal or plant origin and this latter type needs to be investigated on a case-by-case basis per product/ manufacturer

26. INDUSTRIES (Manufacturing) The main additives you need to be aware of are: • Glycerol / Glycerin / Glycerine (E422) - haraam if obtained from pork or non-halal meat sources. • Emulsifiers (E470 to E483) - haraam if obtained from pork or non-halal sources. • Edible Bone Phosphate (E542) - haraam if obtained from pork or non-halal meat sources.

27. LOGISTICS • Penang Port Accredited as Halal Port •  Halal Penang envisages the Penang Port to be the 2nd best Halal port in the world, just after Rotterdam. • The port was awarded the MS1900 in May 2009. This accreditation from SIRIM certifies that the port’s operations comply with the Shariah law for Halal. With that, we are able to brand Penang Port as a Halal port. • Penang Port is the first port in Malaysia to achieve the MS1900:2005 “Quality Management Systems - Requirements from lslamic Perspectives” for the provision of container handling services and dedicated warehouse services within Penang Port. • Linkages with Rotterdam Port and other ports • Penang Port is now having direct discussions with the Rotterdam Port in Holland to collaborate on the development of Halal ports and linking the ports together. Port of Rotterdam International has begin the discussions with other ports in the world ; ( Port of Sohar,( Oman) Port of Suape (Brazil) and Port of Positra (India).

28. New emergence – Halal Logistics and Supply Chain Halal Logistics • Newer phenomenon whereby Syariah element is applied to logistics discipline. • Integral management of physical goods flow and information flow that complies with the aspect of Syariah • A supply chain approach that ensures integrity from : Farm (upstreams) Fork (downstream) • As the integrity of Halal products become more important, logistics control plays a key role in facilitating the manufacturing,logistics and trade of Halal products throughout the world. (packaging/certification/transportation/ warehousing/handling of Halal products at ports)

29. Halal supply chains include everything from the procurement and preparation of genuine halal ingredients to the manufacturing and delivery of the final product all the way to customer shelves. • The halal industry implements a 'farm to table' operation, presenting opportunities for various players in the logistics industry to climb aboard the process including ports, shipping and freight forwarding, warehousing and handling facilities.

30. CERTIFICATION • Halal Certification Body • Branding of the halal certification systems carried out by Penang State Islamic Religious Department (JAIPP) to a single dedicated department, the Halal Management Division, enabling a more professional approach to certification. • Accreditation of Halal Certification Body - Henan • The Halal Management Division, JAIPP has managed to work in tandem with JAKIM ( Department of Islamic Malaysia) to accredit the halal certification body in Henan Province, China ( Islamic Association of Henan). • Therefore, Halal certification issued by Islamic Association of Henan is recognized by JAKIM, Malaysia. • Penang State Islamic Religious Department (JAIPP) is in works to accredit other halal bodies.

31. CLUSTERS @PIHH R&D • Key Project : Juru Beef • Cattle Rearing • Integrated Abbatoir & Meat Processing • Pharmaceuticals • Medical Devices • Cosmetic & personal Care AGRO-BASED • Halal R&D CENTRE • Halal Science Centre, Chulalongkorn University • Halal Food Science Centre, Prince Sonkla University • Halal Products Research Institute, UPM • Halal Industry Research Centre, IIUM • University Science Malaysia LIFE SCIENCES (Bio-tech/ Medical/ Wellness) HALAL Science & Technology

32. International Halal Leather Trading Hub • Penang to become the first international halal leather hub in the world. • The venture with Halal Industries UK (HIG) would see Penang becoming the central hub for the halal leather supply chain including importing, certifying and trading with halal leather producers from China, India, Pakistan, Bangladesh and Brazil. • The total skin and hide market in the world is estimated to worth US$100bil (RM341bil) with products ranging from apparel, accessories, bags, wallets and furniture. Penang is well-positioned to serve the halal leather industry due to its strategic location and investment-friendly infrastructure. • Lifesytle pertaining to halal leather AGRO-BASED

33. Global Cosmetics Market Size & Global Halal Cosmetics 2010 • The growth of the Halal cosmetics market currently worth an estimated USD$ 560 million worldwide. Total Global Cosmetics Market Size USD $334 billion Total Halal Cosmetics Market Size USD $ 13 billion LIFE SCIENCES (Bio-tech/ Medical/ Wellness)

34. Halal Cosmetics • The halal cosmetics still at INFANCY. • Consumers are switching to halal PC&C due to concern over the health & environmental hazards (i.e swine placenta in anti-wrinkle cream, others linked chemical cosmetics to cancer and birth defects & cruelty against animal testing) • Demand : • App. USD$150 million Halal cosmetics distributed to UAE each year • Market size for PC&C in Middle East regions ~USD 560 million • In Saudi Arabia alone the total sales for cosmetics reached USD 1.3 billion in 2006.

35. CLUSTERS @PIHH HALAL HOSPITALITY PARK  International Hotel Chain – Syariah compliant  Spa & Wellness Centre • Dedicated Holistic hospitality development • Medical Tourism - syariah compliant medical centres HUMAN CAPITAL  Training Facilities Available (PSDC) • Collaboration with World Halal Renowned Training Academy • Professionals, Certifiers, Auditors, Scientists HOSPITALITY & TOURISM

36. Halal Penang is collaborating with PSDC and Penang International Islamic & Technological College (KITAB) to develop skilled and trained Halal auditors. • Collaborating with education institutes in Riyadh to develop licensed and skilled Halal auditors • Collaborating with 2 prestigious education institutes ; by developing Halal Catering syllabus • Recently collaborated with International Halal Integrity Alliance (IHIA), a non-profit organisation in M’sia created to uphold the halal integrity to train competent Halal auditors. HUMAN CAPITAL

37. CLUSTERS @PIHH Gateway to GLOBAL ISLAMICFinancial Services •  Vibrant Islamic Banking, Takaful & Financial industry • Presence of international financial institutions • Offshore Banking facilities • Linking businesses to Funders – Islamic bankers, VCs FINANCE • IT Infrastructure – Traceability system • Niche Consultancy • Test Labs • Market Research – muslim markets SUPPORT SERVICES

38. Halal Capital Market Conference • Will be held on 25th – 28th October 2010 at London • The conference event will take place over 4 days and will bring together leading professionals from the mainstream financial sector and the global Halal industry, senior managers of Islamic finance and businesses institutions exclusively dealing in the Halal sector and social and commercial investors. ShariaUMEX • The Sharia Ummah Securities Information Exchange Ltd (ShariaUMEX) is a dedicated securities information and trading gateway that covers news and information about Sharia compliant securities and Islamic finance from all of the world’s main markets. FINANCE

39. MARKETING PIHH –the link of global halal market ROTTERDAM PORT Pakistan America QASIM PORT SOHAR PORT Arab PENANG PORT LIFE SCIENCES

40. Role of HALAL PENANG • Facilitation agency owned by of Penang State Government of Malaysia • Role: Promote, facilitate and develop halal industries in PIHH (Halal Penang)

41. Halal Penang Activities • Investor facilitation • Certification • Manufacturing • Trading • Services • Business Matching • Trading partners • Trade mission • e.g. Henan Province, China • Trade Fairs (Local & International) • MIHAS • World Halal Forum PENANG HALAL TASK FORCE

42. Contact: • PIHH Development Sdn Bhd • Level 44, KOMTAR, • 10503 Penang, Malaysia • Tel: +604-2625444 Fax: +604-2635444 • Email: info@halalpenang.com • Web : www.halalpenang.com • Halal Research Council • 192- Ahmad Block, New Garden Town Lahore, Pakistan Ph: +92i42i5913096-8, 5858990, 8407850 Fax: +92i42i5913056E-mail: info@halalrc.orgWebsite: www.halalrc.org Thank You 