|?The global halal trade: Is Belgium the nextfrontier for Pakistani exports??||Writer : 관리자(@) Date : 18.11.20 Hits : 611|
The global halal trade: Is Belgium the nextfrontier for Pakistani exports?
A growing Muslim population and risingnon-Muslim interest in halal products is a market waiting to be captured
The global halal trade, standing at $3trillion, seems to be a lucrative market place for international investors,with non-Muslim majority countries increasingly expressing a willingness toplay a more active role in the trade that has remained limited in scope to theIslamic world.
According to a report published by theThomson Reuters Foundation on the global Islamic economy, Muslim consumersspent $1.2 trillion on halal food and beverages in 2016, a figure that isexpected to reach $1.9 trillion by 2022. However, even though the halal foodtrade is primarily aimed at the Muslim market, the major exporters of halalproducts are interestingly countries that are not majority Muslim. In 2016,Brazil exported $5.2 billion worth of halal food and beverages ? the highest byany country in the world ? followed by Australia at $2.4 billion, India at $2.3billion, and France at $0.8 billion.
In Europe alone, the halal market driven bya growing Muslim population is expanding at an estimated annual rate of 10 to20%. Europe’s Muslim population is expected to grow from 5.9% in 2010 to 6.8%in 2020 and 10.2% in 2050, another sign of good things to come for the globalhalal trade.
On the other hand, Pakistan lags behinddespite being a Muslim-majority country and has a minuscule share of around 0.25%of the global halal market.
The ‘Halal Club’
In 2011, the Halal Club Brussels wascreated in Belgium, dedicated to helping its members in their efforts topenetrate halal markets. The club brings together nearly 100 European companieslocated in Wallonia, Belgium, that are producing and exporting halal productsand services.
“Halal is becoming a universal sign forquality assurance and standard of living. The world market for halal goods andservices is constantly on the rise and influencing world commerce and finance,”says Pascale Delcomminette, Chief Executive Officer at WalloniaExport-Investment Agency (AWEX), a public sector organisation working toenhance Belgium’s international trade. “Halal products and Islamic FinancialServices have a market share of almost $1 trillion annually.”
Delcomminette said that the club wasinitially composed of agribusiness companies, but these pioneers have beenjoined by more members who are producing pharmaceuticals, cosmetics and textileproducts as well as by service companies in logistics and technology.
When asked her views on how a country likePakistan can become more involved in this growing market, Delcomminette saidthat Belgium can be of great help to Pakistan in this sector. “Pakistaniexporters have a huge market for delivering their halal products. In today’sbusiness environment, companies are seeking to find the key to remaincompetitive. Combining their technology and expertise, Pakistani and Walloonentrepreneurs can forge successful partnerships and mutually benefit from the$1.8 billion-strong Muslim consumer market that represents a fifth of the worldpopulation,” she said.
And there is a clear connection betweenentrepreneurs in Wallonia and in Punjab, Delcomminette believes. “In Wallonia,the Southern part of Belgium, we have developed a very strong logisticsindustry. Its main objective is to improve the long-term performance of bothindividual companies and the supply chain as a whole. The halal supply chainapproach is important to guarantee the halal integrity at the point ofconsumption. With this view, logistics service providers are progressivelyoffering a halal supply chain service to meet the demand from halal industriesthroughout the world,” she explained. Similarly, in Pakistan’s region ofPunjab, the Punjab Halal Development Agency (PHDA) has been established in abid to formalize the halal sector. The agency works on halal certifications,capacity building and compliance regime of halal food safety standards.
It also seeks to brand Pakistan as the“Halal Hub” of the world and open new avenues for the country to expand intothe global halal market. Currently, the halal market in the country isexpanding rapidly under diverse areas of trade, including Islamic financing,food items, oil seeds, pharmaceuticals, cosmetics, tourism and hoteling.
“An MoU was recently signed betweenNorthport in Selangor, Malaysia, and Logistics in Wallonia, for a project toestablish a Halal logistics route between Malaysia and Europe and therebycreate a Halal Hub-to-Hub concept that will progressively be extended at bothends, from Malaysia to China and from Europe to Africa,” Delcomminette said.“Pakistan is ideally located on this new Halal Silk Road. The overarchingobjective is to optimize access to the global halal market.”
The high potential of halal products
According to a report published in 2017,food items consist 43% of the global halal trade, followed by media products at23%, clothing at 23%, tourism at 8%, pharmaceuticals at 7% and cosmetics at 5%.
So what has led to such high demand forthese products? First, the market for halal products is growing due to a hugeMuslim global population that has reached almost 1.84 billion. This figure isexpected to reach 2.2 billion by 2030.
Secondly, the market is still largelyuntapped. The global halal food market was worth $1.2 trillion in 2016 and isexpected to reach $1.93 trillion by 2022. Similarly, the modest fashion marketwhich was valued in 2016 at $254 billion is expected to reach $373 billion in2022, and the halal travel and cosmetics markets that were valued at $169billion and $57 billion respectively are expected to reach $283 billion and $82billion in 2022.
Thirdly, a large chunk of the market sharefor halal products comes from the Asia Pacific where the Muslim middle class isbecoming an area of opportunity not just in numbers but also in terms ofincome. As disposable incomes in Indonesia, Pakistan, and India, for example,have increased over several decades, their Muslim populations have alsoincreased in tandem by almost 257%.
Popularity of halal products amongnon-Muslims
Perhaps even more interestingly, the demandfor halal products does not necessarily come from Muslims alone ? a largenumber of non-Muslims is also becoming more willing to try halal orShariah-compliant products. A case in point is Britain where Muslim migrantshave established halal restaurants that enjoy almost equal popularity among thenon-Muslim population.
But the most interest has been seen inIslamic banking. One in three customers at Al-Rayan Bank, one of the largestShariah-compliant retail banks in Britain, is a non-Muslim. Last year alone,90% of fixed-term deposit accounts opened with the bank belonged tonon-Muslims. The 2008 global financial crisis has made Islamic finance a farmore appealing option to non-Muslim borrowers and investors who see the Islamicsystem as less volatile compared to conventional banking. This is because theIslamic system is based on profit sharing and prohibits investing in“speculative” businesses in favor of things like real assets.
Picking up on this trend, Singapore was oneof the first non-Muslim countries to start selling Islamic sukuk bonds,followed by Hong Kong, the United Kingdom, and Luxembourg who entered the sukukmarket in 2014. Top corporations like General Electric’s GE Capital and GoldmanSachs have also ventured into Islamic bonds
Islamic finance is also thriving in Belgiumand the country offers a good opportunity for Pakistani banks. Pakistan’s HabibBank Limited (HBL) already has branches in the country along with other Islamicbanks of mainly of Lebanese origin. Delcomminette firmly believes that otherPakistani banks will also be welcomed in Belgium should they consider enteringthe Belgian market.
|Prev||HALAL EXPO KOREA 2015_Exhibitor profile|
|Next||?Travel experts forecast high growth ofhalal tourism?|