By Ekkarat Mukem, Bangkok Post
Muslim products offer Thai businesses a major global opportunity
Thai entrepreneurs are keen to tap the growing market for halal products and services, both at home and globally.
Plans are getting under way to promote Thailand as the World’s Muslim Kitchen, with a project to establish a halal industrial estate in Songkhla, while the major tourist cities of Phuket and Chiang Mai are also preparing to capitalise on the growth in halal industries.
Previously, halal food in Thailand was produced by Muslims and was intended for consumption by Muslims, so the products did not need halal certification.
Halal means “allowed under Islamic rules”.
Over the years, the Muslim population in Thailand has increased, creating a rising demand for halal food. Non-Muslim manufacturers have spotted and carved a niche in the expanding domestic and global halal markets.
Since Thailand is a non-Muslim country and many halal food manufacturers are non-Muslims, it is difficult for halal food exports to be widely accepted by consumers in Muslim countries. They have tried to produce food products and services to meet the halal standards and religious requirements and to win the trust of Muslim consumers.
Halal certification began in Thailand in 1948 when non-Muslim food manufacturers asked the Office of the Chularatchamontri to certify their products. In 1982, the Central Islamic Council of Thailand began issuing halal certificates.
In 1996, the halal certification logo was registered with the Department of Commercial Registration, which was later renamed the Department of Business Development.
A survey in 1997 showed that about 200 companies were issued with halal certificates. About 800 companies received the certificates in 2002, with 6,000 halal-certified products. In 2006, 1,700 companies were issued with halal certificates for more than 50,000 products.
Anumat Ahmad, deputy secretary-general of the Central Islamic Council, said many countries are competing for a market share in halal products and services. The world’s total halal market value is estimated at US$3 trillion (96 trillion baht) annually, and the value is expected grow by 4.44% a year until 2016.
He said the growing world Muslim population is a major driver of growth of the halal industry.
Increasing demand for products and services that meet the religious requirements and halal standards at every stage of the process have prompted producers and suppliers to make more investments in research and development of their products and services.
Mr Anumat said halal does not only focus on food ingredients, but also covers a wide range of other products such as cosmetics and pharmaceutical products and other kinds of industries and services such as fashion, financial and banking services, medical services, restaurants and tourism.
He said Thailand has plenty of agricultural produce with immense potential to become the World’s Muslim Kitchen and is recognised for its quality tourism facilities, resources and services.
“If we make serious efforts to upgrade ourselves and be one of the leaders in the halal markets, we will benefit a lot from halal businesses,” Mr Anumat said.
He said the Thai halal industry needs support from the government and relevant agencies to gain a foothold in the global halal market by developing products and marketing strategies, after-sales services, or even amending regulations and financial laws to allow foreign companies to make investments in terms of halal financial products in the country.
“Malaysia has placed a great emphasis on the halal market and has come up with an industrial master plan running from 2006-2020 to develop its industries. Becoming a leader in global halal food and services is part of the plan,” Mr Anumat said.
He said Songkhla, which is the economic engine of the South, is a strategically located province bordering Malaysian and it is also located as a hub for Asean countries. With its geographic advantage, the province is expected to link between the upper and lower Asean countries, with warehouses to be built and goods and services to flow through the province.
“When industries thrive, workers will move to Songkhla and there will be growing demand for food, housing, medical services, tourism and education,” Mr Anumat said.
Plans are afoot to promote the province as a hub for transport to prepare for the formation of the Asean Economic Community (AEC) next year as well as to establish a halal industrial estate to supply halal products to nearby predominantly Muslim provinces in the South and to neighbouring countries, he said.
“Setting up the halal industrial estate in Songkhla will also help ease the southern violence as it will create jobs for local people to improve their livelihoods,” Mr Anumat said.
Sorratham Chinda, deputy chief of the Phuket provincial administration organisation, said tourism in the province is expected to grow further after the AEC’s formation with the arrival of more Muslim tourists.
“Halal tourism is new to the country’s tourism industry. The PAO has realised its importance and has organised the Andaman Halal consumer fair for five consecutive years to promote halal tourism,” Mr Sorratham said.
Chalermchart Nakharangkul, chairman of the Chiang Mai Chamber of Commerce, said Thailand’s halal food exports have great market potential.
There are more than 1.8 billion Muslim people around the world, or about 25% of the world’s population, and they consume halal food products worth an estimated $700 billion annually. Asean countries have a population of about 600 million, with Muslims making up 46%, Mr Chalermchart said.
He said Thailand’s halal food exports are worth only $275 million annually, or 0.18% of the total global value of halal food.
He stressed the need for the Chiang Mai Chamber of Commerce to promote the use of local products and resources and improve halal marketing standards to cater to the Asean and the global markets.
Mr Chalermchart said Chiang Mai is a major agricultural products manufacturer as well as a producer of processed food and handicraft products for export. It is also a world-renowned tourist spot. As it is located in the upper North, it serves as a crucial link with other countries in the North.
Recently, Malaysian businessmen planned to invest in large-scale halal industries worth several billions of baht in Chiang Mai.
Thanpisit Yana-alee, president of southern-based Raya Products and Supply Co, a producer of instant coffee products, said his products are halal-certified, targeting Muslim customers.
The company has a production base in Songkhla manufacturing other kinds of food products. The company supplies its products to customers in Satun, Songkhla, Yala, Pattani and Narathiwat. It also plans to expand its markets further this year, Mr Thanpisit said.
He is now negotiating with Malaysian and Omani businessmen for joint ventures to expand exports to Asean countries. While the AEC will result in more trade competition, halal food industries still offer bountiful opportunities for businesses, Mr Thanpisit said.