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Korean firms struggle to enter halal market

| 11/04/2019 | Reply
KUALA LUMPUR, Malaysia — South Korean firms have been eyeing the ever-expanding halal market for some years now, but technical difficulties in receiving certifications and lack of expertise in attracting buyers continue to remain major hurdles.

More than 20 local firms flew to Kuala Lumpur last week to participate in this year’s Malaysia International Halal Showcase — one of the biggest annual halal trade fairs in the world with participants from 700 firms in 46 countries — to showcase their products.

Malaysia is seen as a key halal hub and President Moon Jae-in expressed his desire to cooperate with the country “to gain control over the global halal market,” during his state visit last month.

South Korean President Moon Jae-in (left) and first lady Kim Jung-sook (center) visit a booth to taste Korean strawberries at the K-Wave & Halal Show in Kuala Lumpur on March 12. (Yonhap)

At MIHAS, which ran from April 3-6, several Korean firms seemed enthusistic to meet buyers and potential customers, but there were some who voiced honest skepticism on the current state of preparedness.

“For entering the market we must now focus on the needs of halal buyers,” said Kim Hanmoi, director of Halal Korea, who participated as a local buyer to meet local small and medium-sized firms. The firm is a local marketing and trading firm that deals with halal products.

“We need to move beyond certifications to find out the ‘tastes’ of Malaysian customers — which I believe is slightly different from that of Koreans,” he added. , MIHAS

Despite Kim’s hopes, however, a majority of the firms are still struggling with the concept of halal and choosing which certification to apply for — in order to succeed in the market.

“In order to be truly successful in Malaysia, you must have a certification from the Department of Islamic Development of Malaysia (JAKIM),” Faizal Bin Adnan, sales executive of Ramly Food Processing, a major Malaysian frozen and fast-food company, famous for its halal-certified meat, told The Korea Herald.

However, only few of the Korean participants in MIHAS had got approval from JAKIM, while the majority had certifications from either the Korean Muslim Federation or the United Arab Emirates’ certification body ESMA.

Meanwhile, Japan has succeded in getting JAKIM to establish a halal central on its soil, ahead of the 2020 Tokyo Summer Olympics. A joint venture between Malaysian company Bangi Golf Resort food service and its Japanese partner Curetex Corp. will manage a “halal kitchen” that will supply ready-to-eat packaged food from this year to restaurants in Tokyo. It will cater to the needs of Muslim tourists and athletes set to visit Japan for the Olympics.

“Japan’s Nippon Asia Halal Association is not as famous (as JAKIM), and not trusted by overseas consumers. JAKIM is considered the No. 1 (halal) certification body all over the world,” Curetex Chariman Masaki Fujishiro told reporters on the sidelines of MIHAS.

President Moon Jae-in (center left) and first lady Kim Jung-sook (center right) make bibimbap, a Korean dish of rice mixed with vegetables, at the K-Wave & Halal Show on March 12. They are joined by Malaysian and Korean businessmen along with Korean celebrities. (Yonhap)

A KOTRA official said that Korea is still in the early stages of entering the halal market and addressed the difficulties of local firms vying for a JAKIM certification.

“It’s a fact that JAKIM’s certification is recognized more across the world compared to KMF’s approval,” said Bok Deok-gyu, deputy director of KOTRA’s new southern policy team.

Malaysia’s diverse ethnicity has contributed to JAKIM’s meticulous reputation, making people more aware of the ingredients that could be in discord with the Islamic Sharia law, according to Bok.

“But it takes more time and money to receive JAKIM’s certification for Korean firms — costing around 15 million won ($13,136) per item including the travel fee for Malaysian officials. At the moment, it is the most plausible option for local firms to receive KMF certification first,” he added, explaining that KMF is one of the 66 halal certification bodies recognized by JAKIM.

Bok explained that it would be ideal for Korean firms to rerceive KMF’s approval first in order to get JAKIM’s certification, but realistically, they are too busy marketing their products at the moment.

According to sources, it also took Japan two years of discussions and nine months of inspection by JAKIM for Japan to clinch the deal to open a center.

Bok also said that there is an underlying hope in the Korean industry that the recent memorandum of understanding reached between Korea and Malaysia will resolve the complications surrounding halal certification.

“We aim to resolve complications with halal certification by cooperating with Malaysia in other sectors as well. We are not a Muslim-majority country and we are at a stage where we are trying to get buyers and countries to understand our avid interest in the market,” he said.

The global halal food market is expected to reach $2.1 trillion by 2025, according to a report by Grand View Research, cited by Business Insider in 2017. The total Muslim population is expected to increase from 23 percent now to around 30 percent of the total world population by 2030.

According to officials here, the halal market has reached 2 trillion won at the moment, but is expected to expand to 3 trillion won by 2022.

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Category: Asia, Branding & Marketing, Halal Integrity, Halal Trade, Media & Events, Partner Events, Research

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