Opinion: Channeling Halal food potential

By Ismat Sabir – Pakistan Today

AnalysIs – Halal industry is a fast emerging business in the world, attracting both Muslims and non Muslims, especially non Muslims due to realising the importance of halal food. Experts have implied that they are safer, hygienic, nutritious, high quality and reliable. Halal food is consumed not only by 1.5 billion Muslims around the world, but also by at least 500 million non-Muslims, which shows that there is a big scope to enter in the halal food industry, to tap the world market. It is estimated that the annual halal food and non food products market is about $2.1 trillion of which about $80 billion is being exploited, which is 5 per cent of total trade of agri-food products. However, halal food trade may have a share of 20 per cent of world trade in food products in near future. While the market for about 1.4 billion Muslims already exists, the demand for halal products is now on the rise across the globe.

Due to lack of awareness about halal products in Pakistan, we hardly have any share in the global market of $600 billion. The Thai consul general in Pakistan said over 1,800 factories are producing 57,000 different halal food products for exports after acquiring Halal Certification from authorities with advanced research facilities. There is great scope of setting joint venture in halal food sector between Pakistan and Thailand. He assured all possible help in setting up joint ventures with Pakistani companies.

Chile a hub for Halal Food

Chile’s ambassador in Malaysia said the number of halal certified Chilean companies had grown from 25 to 45 within the first quarter of this year. It was claimed that the country can compete with any country as its halal products are of high quality. Chile had exported many of its halal meat products to other Islamic countries including the Middle East and Muslim African countries.

Halal units in China

In Ningxia, China, Muslims account for around 38 per cent of the province’s 6.3 million residents. The province recently announced that it had developed a halal industry to accommodate not just the needs of Chinese Muslims but also Muslims in other countries.

Ningxia’s halal food commission said that the province had more than 10,000 factories and restaurants that were certified halal products. The region’s halal industry, which is supported by a high tech laboratory, 15 experts and 300 staffers, was currently worth up to 50 million RMB.

Engro expanding Halal Trade

Engro has acquired Al Safa Halal. It will target the existing North American market, Canada and USA. Pakistan and Malaysia have decided to utilise various options available under the Free Trade Agreement (FTA) to boost economic relations and broaden the scope of bilateral trade, signed in January 2008. Pakistan Malaysia Business Forum is exploring opportunities for joint ventures in sectors such as agriculture and halal industry which offered better returns and greater scope for growth given a growing demand for quality food and halal products in the region.

Zubair Motiwala, Chairman Sindh Board of Investment (SBI) said that Pakistan is going to start issuing halal certification by March, 2012.
He said the SBI in collaboration with Halal Industry Development Corporation, Malaysia, is working to develop halal industry and is committed to effectively implement the provisions of the MoU signed between the two parties on Dec 1, 2010, in Kuala Lumpur, for development of Halal sector in Pakistan. Pakistan can benefit from the halal standard, advance scientific knowledge and research experience of Malaysia for developing and promotion of its halal products industry. Pakistan is the sixth largest milk producer, eighth in meat and tenth in poultry had a negligible share in the world halal food and services market.

However, Pakistan is trying to develop halal services such as finance and banking and could easily develop other products in sectors like pharmaceuticals, insurance, etc.

The experts say that the important factors are the standardisation and certifications of halal brands and logos which would make Pakistan hub of halal trade for the world and for the region, due to the proximity of Middle East and central Asian countries.
Moreover, halal food should be made tasty and pleasant with no chemicals and nice looking to attract consumers the world over and to compete haram food that is being made attractive for consumers to capture markets.

Export potential

Pakistan can earn huge amount by investing into halal meat and exporting it after meeting local demand. European market size of halal food is about $66 billion while France having the largest share of $17 billion alone, stated by the Vice Chancellor University of Agriculture, Faisalabad. He also said that only in UK the halal meat sale is amounting to $600 million annually while the American Muslims spend $13 billion on halal food per annum.
The livestock contributed 55.1 per cent to the agriculture value added and 11.5 per cent to GDP during 2010-11 while its share last year was 53.2 per cent of the agriculture value added and 11.4 per cent to national GDP during 2009-10.

In the current scenario of devolution under 18th Amendment, the responsibility of livestock development has been shifted to provinces and federal government will play facilitating role in national interest. The future plan for livestock sector is to meet MTDF targets for meat, 5.0 per cent and milk 8.0 per cent production through shifting from subsistence livestock farming to market oriented and commercial farming with a focus on entire market chain. The future plan also includes entering into global halal food trade market.

Zubair Motiwala, Chairman Sindh Board of Investment (SBI) said that the Pakistan is going to start issuing Halal certification by March, 2012.

Halal food certification system

The ministry is planning to create a halal food certification system in Pakistan. The system would help the country earn at least $600 million by exporting of halal products. Presently, there is neither halal infrastructure, nor a qualified certifier and whatever is to be exported in the name of halal has to be certified by a foreign inspection body, mainly Malaysian companies.

On August 18, a MoU was signed between Halal Research Council and Faisalabad Industrial Estate Development (FIEDMC) for the establishment of M-3 Halal Park at the estate. It will be Pakistan’s first Halal park and from here Halal products can conveniently be exported. Such parks already exist in Malaysia, Yemen, Britain and Russia.

A state-of-the-art facility is being set up by PAMCO costing $300 million with the cooperation of Iran, M-3 Halal Industrial Park at Faisalabad. A Halal Laboratory would also be set up at University of Veterinary and Animal Sciences (UVAS), Lahore.

An industrial park is proposed to be set up in Karachi to facilitate growth of an export oriented halal business. The park will be a cluster of halal business industries to be built in a special zone where they will be provided infrastructure and halal related support services. For this purpose, the SBI has signed a MoU with the Halal Industry Corporation (HDC), Malaysia in December, 2010 at Kaula Lumpur.

The ministry of commerce imposed a ban on export of meat and live animals in July 2011 for three months to bring down the prices of beef and mutton which were becoming unaffordable for the common man. Although it was said that the purpose of the ban is to provide relief to the consumers but officials said that the decision was taken to meet the demand of Pakistan Tanneries Association (PTA) whose members were facing the problem of shortage of hides and skins and high prices of raw materials, due to export of animals. They said exports of leather products fetch much more foreign exchange than those of live animals.

Export of meat products

According to the Federal Bureau of Statistics, Pakistan’s export of meat and meat products touched the figure of $153.8 million in 2010-11, showing an increase of $99.3 million over the previous year. The official statistics indicated that 95,523 live animals were exported during 2010-11, July-March. About 153,543 animals were exported in the previous fiscal year which included 48,680 cattle, 50,000 buffalos, 54,716 goats and 147 camels. These were exported to Arab countries, Central Asian states and Afghanistan. There is no clash of interest between the two industries. The ban should have been restricted to animals only, sparing the meat. The export of tanned leather increased from $341.8 million a year ago to $462.3 million in 2010-2011 and that of leather products rose from $458.6 million to $540.5 million.

Malaysia’s Department of Islamic Development has approved the Islamic Foundation Bangladesh (IFB) as a Halal certification body and, Bangladesh will soon start exporting halal food and other products, competing with Pakistan in this sector, besides textiles. The IFB has been included in the list of halal certification bodies worldwide, i.e. Bangladesh would take its share from the $660 billion global market for halal food.

Emerging global market

The emerging global halal food market has plenty of opportunities for further growth. Thus, the market represents a strong economic opportunity for Pakistan and Thailand. The Thai government has lent the industry valuable support in developing a world class halal logistics system. Thailand is currently the world’s sixth largest exporter of halal food, accounting for $5 billion in international trade and providing food to 1.8 billion Muslims in over 157 countries. As a large Islamic nation with strong agricultural base and good relations with Muslim countries Pakistan may be a leading player in halal food trade.

Punjab Industrial Estate Development and Management Company (PIEDMC) and the Government of Malaysia have signed a MoU for the promotion of halal product projects, which will help Pakistan in boosting halal products’ exports. Pakistan is among the top five milk and livestock producing countries in the world. Therefore, Pakistani businessmen can avail this opportunity. PIEDMC Chairman S M Tanveer pointed out that the dairy and livestock sectors currently performs well below its true potential. Pakistani halal food, which also includes poultry products, has vast export potential in European and other Western countries. The exports can be enhanced manifold in future, provided the sector receives official recognition. The private sector exporters of halal food said through adopting modern techniques and bettering sanitary certification procedures, the halal food exports could fetch more than $100 million in next two years for Pakistan, besides other products.