Big Japanese and U.S. food processors such as Ajinomoto and Kellogg are turning Southeast Asia into a global production center for halal foods, as they build facilities in the region to meet the dietary needs of the world's Muslims.
The number of Muslims is
forecast to rise from 1.6 billion now to 2.2 billion by 2030, accounting for nearly
30% of the world's population and making them an attractive market for food
companies, reports Nikkei Asian Review (22 Feb 2014).
The article quotes figures
from Malaysia's Halal Industry Development Corporation (HIDC). It says the global
market for halal foods -- that is, those that comply with Islamic religious law
-- was worth 64.2 trillion yen ($622 billion) in 2010. It is expected to top 70
trillion yen by 2015.
The Japanese and U.S. food
giants see Southeast Asia as an attractive location to turn out halal products,
both because the region is home to many Muslims and because many of the raw
materials needed are readily available. The food processors plan to build
halal-certified production and export bases in Southeast Asia to take advantage
of this increasingly lucrative global market, it adds.
REST OF THE STORY:
'Non-halal' signboard
GCH Retail (Malaysia), a
subsidiary of a Hong Kong-based conglomerate, operates the Giant supermarket
chain in the Southeast Asian country.
The Giant
outlet in Kuala Lumpur's entertainment district has a tiny section with a sign
touting non-Halal foods. These include products made with pork or alcohol,
which Muslims are forbidden from consuming. The vast majority of the
supermarket's products comply with Islamic dietary strictures.
Malaysia
is a majority-Muslim country of about 30 million people. About 40% of the
population consists of ethnic Chinese and Indians, many of whom are not
Muslims. Nevertheless, halal foods dominate store shelves. "It would be
difficult to sell our products through distribution channels such as
supermarkets and other retailers if they were not halal," said an official
at a local food maker.
A similar
phenomenon can be seen in Muslim areas in Singapore and Thailand, although
Muslims make up only around 10% of these countries' total populations.
Many mouths to feed
Ajinomoto has exported its
seasoning of the same name, Aji-no-moto, made in Malaysia, to Saudi Arabia and
other Muslim countries since the 1990s. In late 2012, the Japanese company
built a state-of-the-art plant in Indonesia and developed a high value-added
product targeting consumers in Asia and the Middle East.
"We
will make Southeast Asia a base to tap the global halal market," said
Etsuhiro Takato, general manager of Ajinomoto's department overseeing the
region. The condiment maker plans to set up a new, 900 million yen production
line at the plant, which is in a suburb of Jakarta. The new line will go into
production just a year and a half or so after the original facility was built.
Other
Japanese food makers have also been expanding in Southeast Asia. Kewpie opened
a halal-certified plant in Malaysia in 2010. It also plans to start production
of mayonnaise products and sandwich fillings in Indonesia this autumn. Frozen
food maker Nichirei received halal certification for its plant in Thailand in
2010.
Kellogg, an American company
best known for its breakfast cereals, plans to spend about 13 billion yen on a
snack plant in Malaysia, as it tries to grab a larger share of the growing
halal market. The facility will be located in the southern Malaysian state of
Negeri Sembilan and is scheduled to go online in 2015.
Major
U.S. chocolate maker Hershey also plans to build a big new factory in thesouthern Malaysian state of Johor at a cost of about 25 billion yen. It will
make halal-certified products for export to 25 countries and regions, mostly in
Asia.
Southeast Asian charms
In addition to having a
sizable indigenous Muslim population and strong connections to Muslim markets
in the Middle East and elsewhere, Southeast Asia is favored as a stable
location for foreign investment. Food processors can also easily procure raw
materials such as palm oil, which is used in frozen foods and confectioneries.
Malaysia and Indonesia together account for 80% of the world's palm oil
production, and Indonesia is also one of the world's largest cocoa
producers.
[Nikkei Asian Review, 22 Feb
2014]
