ABOUT HALAL MARKET ECONOMY
With a strong, predominantly young consumer base that is growing twice the size of global average, the Muslims worldwide are indeed a lucrative captive market. Money earned and spent by one in every four person in the world is certainly leaving a massive impact on global economy, making Halal economy one of the fastest growing economies in the world.
Muslim is the 23% of the world’s total population and for this reason is one of the fastest growing economies
Players from every sector of the industry, from huge multinationals down to small enterprises and new startups, all are eager to tap into this huge and growing market. The halal industry has now expanded beyond the food sector to include pharmaceuticals, cosmetics, healthcare products, toiletries and medical devices as well as service sector components such as logistics, marketing, print and electronic media, packaging, branding, and financing.
“The Muslim consumer spending across halal food and non-food sectors (excluding Islamic finance) is worth $1.8 trillion in 2014, rising to $2.6 trillion by 2020”
Source: State of the Global Islamic Economy Report 2015/16 by Thomson Reuters
With the increase in the number of affluent Muslims in recent years, the halal industry has developed further into lifestyle offerings including fashion, halal travel and hospitality services. This development has been triggered by the change in the mindset of Muslim consumers as well as ethical consumer trends worldwide.
The halal market is also not exclusive to the Muslims only. It has garnered increasing acceptance among non-Muslim consumers, many of whom associate halal with healthy and ethical consumerism. As such, the universal values promoted by halal, including cleanliness and hygiene, economic and social justice, social responsibility, stewardship of the earth, animal welfare and ethical investment, all have gathered the market’s interest beyond its religious compliance.
The popularity of, and demand for, halal certified products among Muslims and non-Muslim consumers alike will continue to rise as more and more are looking for food and consumer products that are not only safe and high in quality, but also ethically and socially responsible.
The presence of Muslim around the world
Halal Parks: An Investment in Infrastructure and Logistics
The Halal Parks is a community of manufacturing and service businesses located on a common property. Tenants in the parks seek enhanced environmental, economic, and social performance through collaboration in managing Halal products and resources issues. By working together, the Halal business seeks a collective benefit available in the Halal Parks premise. As part of the investment strategy of the Amana fund, the Halal park environment will be optimized by introducing a team of experts, all determined to institute new specialized modular construction techniques, both for commercial and industrial use. Specifically developed for the Amana Fund, these techniques have proven to be successful in the past to create the best solution to optimize production and logistics in the parks.
Components of this approach include green design of park infrastructure, cleaner production, pollution prevention, availability and accessibility of raw materials and ingredients, energy efficiency, intercompany linkages, consolidated services from public agencies and linkages for marketing. Ultimately, the Halal Parks is set to improve the economic performance of the participating companies and ensuring Halal integrity is intact and not compromised.
The services introduced by Halal park environment
At Amana, we see Halal parks as building blocks that fuel Halal production and drive the economy forward. To ensure halal park operators are operating at maximum efficiency, we have redesigned the park’s layout, shortened its construction time and lower transportation costs. This is possible since all building materials are prefabricated on site, shortening the overall construction time and minimizing the need for material delivery. Modular in form, all precast modules have a standard warehouse buildup of 2,400 sq. meters, each divided into four equal units of 600 sq. meters. A dedicated office module of one or two floors is also attached to each of the four units. Amana warehouses can also be exchanged, modified and adapted to the client’s growing needs. We foresee that this new concept in Halal park development will boost productivity as well as increase collaborations between park tenants. It would also drive the Halal-certified SMEs to produce faster, collaborate more, optimize their logistical resources better and compete better in international markets.
Halal Pharmaceutical and Healthcare Industry
The healthcare industry has been identified as one of the key industries to be promoted, with vast potentials and opportunities. The halal pharmaceuticals and healthcare service providers within the healthcare industry have shown immense prospects for high growth and new business opportunities.
Components of Pharmaceutical and Healthcare sectors
The importance attributed to the healthcare is not only based on the potential to contribute to the any country’s GNI in a direct economic perspective, but also in an indirect way by maintaining healthy communities, which boosts the productivity, creativity and tangible outcomes for the national economies.
This sector needs investment and support, with many challenges (mainly concerning Good Manufacturing Practices, Research and Development as well as ingredients) coupled with immense opportunities. Potential Muslim pharmaceuticals expenditure could reach $110 billion by 2020.
Halal logistics sector is expected to increase in tandem with the growth of the Halal food industry, and with the help of a globally recognized Halal certification system. Individual countries are able to position themselves as Halal logistics hubs. By serving only the Halal food industry, consulting company Frost & Sullivan estimates that Halal logistics in Malaysia could potentially be worth about US$1.9 billion annually. The concept of Halal is normally associated with food products which are of high in terms of cleanliness quality, sanitation as well as compliance to religious requirements. Halal logistics meanwhile, is the process of managing those products throughout the supply chain in accordance to the Halal standard.
The increase of Halal food exports will boost logistics growth
The increase of Halal food exports will only boost logistics growth further in in many countries as there will be an upsurge in freight forwarding needs, Halal warehousing and specialized transportation services. The Halal food industry would also require good supply chain management and operations that are highly efficient at a low cost, without compromising the Halal status and integrity of the products. It also requires highly sophisticated and strictly controlled logistics operations to prevent cross-contamination of products during storage and distribution. Local logistics service providers are advised to tap the growth opportunities available in this sub sector. However, having dedicated logistics infrastructures and manageable Halal logistics operations are crucial for any logistics service providers keen to venture into the Halal industry.
Logistics service providers also need to equip themselves with the ability to fulfill the Halal requirement besides maintaining the high efficiency and effectiveness of their operations to reduce the logistics costs for clients.