Brunei: Halal branding efforts bear fruit

Ying Chia, Brunei Times

Thursday, December 9, 2010

WITH a mere population of just under half a million, Brunei has put itself to the grind this year to produce a strong contender for the lucrative global halal market via a national halal brand.

Incorporated by Wafirah Holdings, a fully owned subsidiary of Bank Islam Brunei Darussalam (BIBD), the Brunei Halal brand is hoped to be a key diversifier for the local economy, which is still heavily reliant on the oil and gas industry for revenues.

As a young brand in the competitive halal market, Brunei Halal still has a long way to go in proving its marketability, as evidenced by the Ministry of Industry and Primary Resources’ (MIPR) strong support to push the brand into the international market.

Creating Brunei Halal has had its share of struggles, as local SMEs who want to push their halal products via the Brunei struggled to compete with external producers who have lower production and logistics costs. Ironic as it may seem, with high production and logistics costs locally, a majority of the Brunei Halal brand products are manufactured outside of the country.

With over two billion ‘de facto’ consumers and a market value of approximately US$ 500 billion annually according to 2006 statistics from Imarat Consultants, the strength of halal branding has never been more clear. The overview also identified competition in the Asian region (Malaysia, Thailand, Singapore, Brunei, Philippines, Indonesia and China) as key areas that have stimulated the growth and demand for halal products worldwide.

Noel Shield, Chief Executive Officer of Ghanim International Food Corporation, which has been charged with managing and building the Brunei Halal Brand, had said during an MIPR organised Small and Medium Enterprises (SME) Halal Workshop in March this year that “Unless there are some changes in the way they operate, changes in the logistics out of Brunei and cost of production, then they will never be competitive. This is a fact.”

He had also stated during the workshop that the cost of logistics out of Brunei was too high. “It is enormous. It is three to four times more than what I would pay for from Melbourne to Shanghai. Unless we can solve this, it will be very difficult to get (products) out of Brunei,” Shield was quoted as saying, adding that the high cost of production is another troublesome obstacle to making the Brunei Halal brand a truly local effort.

An Agro-Tech Park slated for phase one completion by 2012, is another project designed to help facilitate Brunei’s strength for a national halal brand.

In July, 2010, products from the brand went on display at the 5th International Halal Conference held at the International Convention Centre (ICC), a year on from when the Brunei Halal brand was unveiled. It was reported at the time that “private firms from overseas who were present during the two-day conference had expressed their confidence in the credibility of Brunei’s Halal brand and this recognition would give MIPR an early boost to penetrate into the halal market in Europe”.

The public got its first taste of the Brunei Halal brand, which Shield has referred to as “the People’s brand”, during the Hari Raya season this year. While prices for the hampers (which mostly contained what Shield referred to as “comfort food”), ran the gauntlet from just under $100 to $180, concerns over the pricing of the hampers saw a number of consumers wondering whether their first taste of Brunei Halal would be as sweet as the prices.

Consumers were also surprised to discover that much of the Brunei Halal brand products weren’t produced locally. A resident who preferred to be known as Tan, had said that while he was aware Brunei was not known for manufacturing, “it would still be nice to see more of the local traditional products, like kek batik or local traditional snack foods,” on sale.

Although sales were admittedly modest for the hampers, the Brunei Halal brand had bigger things to prepare for; a new retail warehouse in Jerudong, mere metres away from Ghanim’s new headquarters, were both officially launched in September this year. Spanning everything from non-alcoholic beverages to instant noodles, the range of over 20 premium halal products also come with more affordable prices such as $1.20 for Belgium produced luxury chocolates and $0.80 for instant noodles.

A local hunt for a Chief Executive Officer to head up the Ghanim corporation also saw a push for home-bred expertise to take over the reins, although at the time of press, no further details on whether a suitable candidate had passed the “very strict” screening process.

As a start of the “long road” towards global success, this first foray into retailing a national halal brand also clocked another major milestone when it’s first foreign retail export deal with Singapore’s NTUC Fairprice Cooperative Ltd saw Brunei Halal launched in the country just a month after its local debut.

“We are delighted to have our first success in Singapore with NTUC FairPrice so soon after the launch of the new joint venture and we are confident we will see further opportunities in Asia and Europe as we roll out the Brunei Halal range of products,” Antony Greenstein, director of Global Business, Kerry FSDA, was quoted as saying in a media release regarding the launch.The Brunei Times