SINOQUAL International Halal Forum Makes the Headlines of China Pharmaceutical News

After SINOQUAL's 2014 FIA International Halal Forum was featured on the front page of China Pharmaceutical News, many news websites rushed to reprint it.

Broad prospects for Halal food exports

According to the 2009 global population statistics, the world's population was 6.8 billion, of which the Muslim population was 1.57 billion, accounting for 23.4% of the world's population, distributed across more than 200 countries and regions and growing rapidly. According to Islamic precepts, a Muslim's diet must be Halal, which brings a huge and ever-growing demand for Halal food. It is understood that the annual market value of Halal food worldwide has exceeded USD 650 billion and is growing rapidly as the population increases.

Such a market of enormous potential has attracted the eager attention of Halal food producers from all over the world. However, this market is currently firmly held by countries such as Brazil and Australia, with China accounting for only a tiny 0.14% share. Recently, at the 16th "Food Ingredients Asia 2014" held in Shanghai, how Chinese food companies can tap the global Halal food market became a topic of concern for many companies.

Going international through certification

Speaking of Halal food, what usually comes to mind first is the lamb skewers or hand-pulled noodles wafting their aroma on the streets, or the instant-boiled mutton enjoyed by family and friends gathered around a stove in the cold of winter... In fact, Halal food has an extremely strict definition, with detailed provisions for Halal food and ingredients. According to the literature, Halal food is "lawful, clean and wholesome food prescribed by a series of Halal dietary rules," and must not contain blood, alcohol, narcotics, etc.

"In other words, Halal food is actually defined as absolutely safe, containing no non-Halal foods or ingredients and materials harmful to health, and the equipment used in processing and manufacturing is not allowed to contain non-Halal components," introduced Yang Xiaocui, general manager of Shenzhen SINOQUAL Biotechnology Co., Ltd., China's first international official Halal certification body. Products of Halal food producers must meet Halal standards; all raw materials used in the production process must be Halal-certified; products or materials must be processed, produced and packaged under high cleanliness and hygiene standards; and if a product or material is contaminated or cross-contaminated by any non-Halal substance, it absolutely cannot be used.

Therefore, domestic Halal food producers first face a necessary threshold for entering the international market - Halal certification. Yang Xiaocui introduced that the current global certification brands include Singapore's government MUIS Halal certification, Malaysia's government JAKIM-Halal, Indonesia's MUI Halal certification, and the US IFANCA Halal certification. Exporters should inquire with and clarify through the importing country's government which bodies are recognized as having Halal certification qualifications for specific products.

It is not easy for a company to pass Halal certification. According to the introduction, an applicant company must pass a strict on-site production audit by a certification officer to obtain the qualification certification before it can get the "passport" to export to the Halal market and use the Halal label on the product's outer packaging. Even after passing the audit, one cannot be careless. "A company's internal management and integrity-building are especially 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 may only be used for cleaning and disinfecting factory equipment. Therefore, when producing Halal food, companies need to keep various taboos in mind, especially not placing taboo products together with Halal food to avoid cross-contamination. Once a product is detected by the destination country as containing non-Halal food components, alcohol components or excessive additives, it will immediately be rejected, causing the company heavy losses. In addition, once a company commits a serious violation, it will be blacklisted by all Muslim markets," Yang Xiaocui warned.

Broad market, enormous potential

With many ingredient taboos, various "strict" rules to follow in the production process, and rigorous review and certification to pass - becoming a Halal food company is not easy. But the unlimited business opportunities of Halal food make food manufacturers around the world covet it. It is understood that the global Muslim population is mainly distributed in the Middle East's Arab region, Southeast Asia and Central Asia, with the most in Asia; the potential of Halal food stems precisely from the rapidly growing Muslim population. "Currently Halal food accounts for about 25% of the global food market, and is expected to reach 30% in the future," Yang Xiaocui introduced.

According to the literature, Malaysia is the global leader in developing the Halal food industry and has raised standards to the highest level. In 2013, Malaysia exported USD 9.8 billion worth of Halal food, becoming one of the largest Halal food suppliers among OIC members. After the 2008 financial crisis, Singapore became a bellwether of the global Halal product market, growing at 10% per year, with Halal food found throughout supermarkets and Halal restaurants increasing rapidly. US food manufacturers such as Kellogg's and Hershey also plan to build Halal food production plants following the Malaysian Halal food production model. Indonesia, with the world's largest Muslim population, plans to set up a Halal food production center in 2015. A quarter of Thailand's food factories have already begun making Halal food. The Gulf countries of the Middle East, with scarce food resources and heavy reliance on imported food, have the world's largest Halal food market potential.

"The raw materials and ingredients used by Halal food companies can also be used by ordinary food companies, but the raw materials and ingredients of ordinary food cannot be used by Halal food companies. Therefore, if food ingredient producers successfully break into the Halal market, they can gain broader development space through local food-processing companies," Yang Xiaocui introduced.

In addition, in countries with a Muslim majority, the sales and industry of Halal food keep rising. Not only that, even in some countries where Muslims are not the majority, the food industry produces Halal food of enormous value. In the United States, for example, the total value of the Halal food market has reached USD 20 billion. Europe's Halal food market is also growing rapidly.

China's unique competitive advantages

Because Southeast Asia is an important residential area for the Muslim population, Halal certification bodies are also concentrated in Southeast Asia. "In 2009 alone, MUIS provided Halal certification for 65 food companies, whereas previously only 5 per year," introduced Nur Ruhaya, senior auditor at Singapore's MUIS-Warees.

"Another huge advantage is that, with the signing of the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN and the completion of the China-ASEAN Free Trade Area, China's Halal food exports to ASEAN countries are subject to zero tariffs. This brings a price advantage to Chinese Halal food companies," Nur Ruhaya said. On this, Yang Xiaocui explained that currently the global Halal food market is held by countries such as Brazil and Australia, with China accounting for only a tiny 0.14% share. But for those less economically developed Southeast Asian countries, with low public purchasing power and a scarcity of materials, there is a large gap in demand for Halal food; Brazil and Australia are too far away, while China has a natural geographical advantage, low transport costs and a greater price advantage; combined with the zero-tariff policy, this series of favorable conditions will make Chinese Halal food very competitive in the ASEAN market.

And for wealthier countries such as Saudi Arabia, Dubai and Singapore, the successful export of Chinese Halal food can win companies handsome profits. It is understood that yak beef from the Qinghai-Tibet Plateau, for its purely natural, original ecology, low fat and high protein, is very popular in Middle Eastern countries, with an export price reaching tens of thousands of yuan per kilogram.

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