Halal logistics in malaysia and 5 continents

GBI 795 – UiTM Shah Alam

MOHD FARID AWANG AMIN ABDULLAH

NORHAIZUM SAHRIL

HALAL LOGISTICS


CONTENT

1.  Introduction on Halal 2.  What is Halal Logistics? 3.  Standards 4.  Government initiatives 5.  Private initiatives 6.  Halal Logistics in 5 continents 7.  Opportunities


INTRODUCTION

• What is Halal? • Halal products • Muslim population


Halal is used to describe anything permissible under Islamic law, in contrast to haram, that which is forbidden. This covers aspects such as behavior, speech, dress, conduct, manner, and dietary laws. This dichotomy of usage is similar to the Hebrew term "kosher".

Halal

Ir. Marco Tieman, ASEAN Logistics Network Symposium 2010 Bangkok, 8-9 October 2010


HALAL HUB DIVISION : JAKIM


Halal Products !  The production & consumption of Halal

food has been traditionally the main focus of the Halal industry.

!  However, the concept of Halal is not confined to food itself. Halal products and services also include cosmetics, pharmaceuticals, clothing, financial services, and logistics.

!  Halal is extending both upstream (like animal feed) and downstream (like food services) the value chain and includes logistics!

Ir. Marco Tieman, ASEAN Logistics Network Symposium 2010 Bangkok, 8-9 October 2010



The People


THE HALAL LOGISTICS


•  Hypermarket •  Restaurant •  Canteen •  Pasar malam

•  Supply chain •  Online


HOW ALL THESE FOODS DELIVERED? IS IT (SC)

CLEANS? DO THE SUPPLIER HAVE HALAL

LOGISTICS @ SC?


Ensuring integrity from farm to fork

WHY NEED HALAL LOGISTICS?

Ensuring integrity from seed to fork


WHAT IS HALAL LOGISTICS?


DEFINITION

•  Halal logistics is the process of managing the procurement, movement, storage and handling of materials, parts livestock and (semi) finished inventory both food and non-food (and related information & documentation flows) through the organization and the supply chain in compliance with the general principles of Shariah Law.

Halal Logistics Conference 2012 28 June 2012, Traders Hotel, Penang


Halal products are segregated from non-Halal products to: 1. avoid (cross) contamination 2. avoid making mistakes 3. ensure consistency with Shariah and the expectations of the Muslim Consumer

THE PRINCIPLES





Assoc. Prof. Hajjah Mariam Abdul Latif (UMS) Opportunities on Halal Logistics and ASEAN FTAs, HDC and MITRANS, June 2012


HALAL LOGISTICS SUPPLY CHAIN


EMERALD JOURNAL : Marco Tieman, (2011),"The application of Halal in supply chain management: in-depth interviews

GBI 795 – UiTM Shah Alam Foundation of Halal supply chain management

As argued by all people interviewed, the perception of the Muslim is different, depending on the Islamic school of thought, local Fatwas (religious rulings) and local customs. As mentioned during one of the interviews, Brunei requires even full segregation between stunned and non-stunned Halal slaughtered meat.

Risk product characteristics: •  wet products have a higher

risk as compared to dry products; and

•  bulk products have a higher risk than unitised products

EMERALD JOURNAL : Marco Tieman, (2011),"The application of Halal in supply chain management: in-depth interviews


Halal control activities and assurance activities in the

Halal Supply Chain

•  Warehouse •  Transport •  Terminal

Marco Tieman, Jack G.A.J. van der Vorst, Maznah Che Ghazali, (2012),"Principles in halal supply chain management", Journal of Islamic Marketing, Vol. 3 Iss: 3 pp. 217 - 243


1. Halal control activities and assurance activities in the warehouse


2. Halal control activities and assurance activities in transport


3. Halal control activities and assurance activities in terminals


EMERALD JOURNAL : Marco Tieman, Jack G.A.J. van der Vorst, Maznah Che Ghazali, (2012),"Principles in halal supply chain management", Journal of Islamic Marketing

HALAL SUPPLY CHAIN MODEL (Developed based on SC model by van der Vorst and Beulens

(2002), based on Cooper’s SCM framework (Cooper et al., 1997)


EMERALD JOURNAL : Marco Tieman, Jack G.A.J. van der Vorst, Maznah Che Ghazali, (2012),"Principles in halal supply chain management", Journal of Islamic Marketing


Assoc. Prof. Hajjah Mariam Abdul Latif (UMS) Opportunities on Halal Logistics and ASEAN FTAs, HDC and MITRANS, June 2012






NO# COMPANY# ADDRESS## WEBSITE#

1"CITRA"MULTIMODAL"SERVICES"SDN"BHD"Lot"37,"Lebuh"Sultan"Mohamad"1,"Kaw."Perindustrian"Bandar"Sultan"Suleiman,"Pelabuhan"Klang,"Klang"Selangor"

www.citra.com.my"

2"FREIGHT"MANAGEMENT"(M)"SDN"BHD"Lot"37,"Lebuh"Sultan"Mohamad"1,"Kaw."Perindustrian"Bandar"Sultan"Suleiman,"Pelabuhan"Klang,"Klang"Selangor"

www.fmmalaysia.com.my"

3"GOLD"COLD"TRANSPORT"SDN"BHD"No."3,"Jalan"Sungai"Kayu"Ara"32/40,"Seksyen"32,"Berjaya"Industrial"Park,"40460"Shah"Alam"

www.goldcold.com.my"

4"HAVI"LOGISTICS"(M)"SDN."BHD."NO.1,JLN"13/5,"SUBANG"JAYA"47500,"PETALING"JAYA"SELANGOR"DARUL"EHSAN" ""

5"IGLO"(M)"SDN.BHD."Lot"506,"Jalan"Pelabuhan"Utara,Bandar"Sultan"Suleiman,"42000"Pelabuhan"Klang,"Selangor"Darul"Ehsan,"Malaysia."

www.iglo.com.my"

6"JOHANN"FREIGHT"SDN"BHD" No."3,"Lengkuk"Gerudi"off"Jln."Pelabuhan"Klang"Utara,"Klang,"Selangor" www.johannfreight.com"

7"KONTENA"NASIONAL"BERHAD"Batu"9,"Jalan"Klang"Lama,""Seri"Se\a"46000"Petaling"Jaya"

www.kn.com.my"

MALAYSIA HALAL LOGISTICS PROVIDER

Zalina Idris, Capacity Development Division, HDC, Oct 2012


STANDARDS


STORAGE •  Non halal product / raw material

should not be in the storage area •  The surrounding of storage must

be clean and free from any contamination

•  Storage for wet and dry raw ingredients should be separated, well arranged and systematic

DISTRIBUTION & LOGISTICS •  Transportation and warehouse are

assigned for halal products only •  Suitable temperature based on

the product characteristics


MALAYSIA HALAL LOGISTICS STANDARDS

Launch by Prime Minister of Malaysia during MIHAS 2010 : Halal Logistic and Cosmetic Standards, Department of Standards Malaysia


! MS 2400-1:2010 (P) Halalan-Toyyiban Assurance Pipeline – Part 1: Management System Requirements for Transportation of Goods and/or Cargo Chain Services

! MS 2400-2:2010 (P) Halalan-Toyyiban Assurance Pipeline – Part 2: Management System Requirements for Warehousing and Related Activities

! MS 2400-3:2010(P) Halalan-Toyyiban Assurance Pipeline – Part 3: Management System Requirements for Retailing


The International Halal Logistics Standard

IHIAS 0100:2010


Halal Warehouse

•  The organisation shall ensure that there is a physical segregation of Halal cargo from non-Halal cargo throughout the warehouse processes

•  The Halal products have a dedicated storage zone (floor

storage) or racks, which are clearly separated by colour and/or marking

•  A dedicated cold room is available, or segregation from non-Halal through physical barrier or container (insulated box) is required for the storage of Halal products in case of refrigerated storage.


Halal Transportation •  The transport is cleaned before use according to existing hygiene standard

and according to ritual cleansing in case of an earlier non-Halal or unknown shipment (history of one shipment before this only),

•  No mixing of Halal goods with non-Halal goods in case of bulk shipments and medium & severe najs in one container or transportation vehicle.

•  There is no mixing of Halal goods with non-Halal goods in one pallet and/or load carrier.

•  Halal shipments are provided with a tertiary packaging in case of mixing of Halal and non-Halal cargo in one container or transportation vehicle.


Halal Compliant Terminal •  The organisation shall ensure that there is a physical segregation of Halal

cargo from non Halal cargo throughout the Terminal processes.


GOVERNMENT INITIATIVES


Through one of the Government’s plan for the development of the industry in IMP3, the objective has incurred Malaysia as the global Ha la l hub fo r p roduct ion and t rade merchandize and Halal services such as logistics.




PRIVATE INITIATIVES



INTERVIEW VIDEO


The Halal SuperHighway

�The Halal SuperHighway is a trade & logistics solution and is envisioned to become the De facto standard to facilitate Global Halal Trade�.


The Halal SuperHighway

The Halal SuperHighway = Brick & Mortar (A hybrid model)

Trade and Logistics Solutions

Chain of custody

Halal certification & standards

Halal compliance

Supply Chain Integrity


The Objectives 1.  The Halal SuperHighway provides a command & control centre to

facilitate authentication of Halal in a supply chain, providing market access and a cost advantage for the Halal industry.

2.  The Halal SuperHighway locks-in Halal producers in a country as well as Halal producers overseas that manufacture under license of a country�s standard.

3.  The Halal SuperHighway consolidates for SMEs and provides them market access.

4.  The Halal SuperHighway connects Halal Ports & Terminals (Gateways).

5.  The Halal SuperHighway promotes International Halal Logistics Standard (IHIAS 0100:2010) as the Halal logistics standard.



! HalalStorage.com, a LBB International initiative, was launched in 2008.

! Halalstorage.com is an online market place for the demand and supply in Halal storage. It facilitates in the search process for Halal storage worldwide

! HalalStorage.com envisions to increase the availability of Halal storage facilities world-wide in order to better facilitate global Halal trade and to reduce the costs of Halal Logistics


Increase the availability of Halal storage facilities world-wide in order to better facilitate global Halal trade and to reduce the costs of Halal Logistics

The Objective


1

2a

3

2b

Register available Halal storage facilities

System matching

Direct facilitation

Contracting

The Process


Halal Logistics - 5 Continents


GLOBAL MARKET: POTENTIAL


•  World Muslim population of 1.98 billion in 2011 out of 7.0 billion World population. • With average annual growth rate of about 1.84% per annum.

• Approximately 117,000,000 per yr. increase which does not include conversion which on the rise currently.


HALAL MARKET

Food &BeveragePharmaceutical

Cosmetics &Personal Care

Global Halal products market is estimated at US$2.3 trillion excluding Islamic banking.


REGIONAL HALAL MARKET VALUE

United States According to the Islamic Food and Nutrition Council of America, the U.S. halal market is estimated at $17.6 billion

The top 10 major halal food markets are: 1. New York City, New Jersey and Long Island metropolitan areas 2. Los Angeles 9. Atlanta 3. Chicago 10. Washington D.C 4. Detroit 5. Houston 6. Dallas/Forth Worth 7. South Florida 8. San Francisco


The Americas

•  Muslims account for 0.6% of the population of the Americas, numbering 5.3 million. The Muslim population in Canada and the United States is expected to grow, presenting new opportunities in the halal food markets of North America.

•  The largest Muslim population in South America resides in Argentina, numbering 1 million.

•  The population of Muslims in the Americas is small compared to that of the Middle East; so many Muslims do not have convenient access to halal foods. As such, this market shows strong potential for growth, as Muslim consumers in the Americas continue to demand halal products. Canada’s close relations with the US and Latin America would contribute to its success in exporting halal products to these regions.

•  Several US companies have recognized this opportunity, and have become significant exporters of halal products; companies such as Cargill, ConAgra, Tyson, and Oscar Mayer have halal product lines.

Canada: Global Halal Food Market http://halalfocus.net/2011/05/09/canada-global-halal-food-market/ Page 8 of 18



Africa "  South Africa, also known as the “rainbow nation” due to its diverse

population, has also been actively hosting events focussing on Halal as a viable business concept.

"  With a Muslim population of approximately 1 million, South Africa is playing a major role in developing the regional Halal industry in Africa and is constantly seen as the gateway to the immense African market.



Canada has long-standing trade relations with several key halal markets. Canada’s top export market in the Middle East, the United Arab Emirates, is one such partner. Exports of bovine meat have increased 5383% since 2007, representing a new and lucrative market for Canadian beef exporters. Poultry exports to the country were high in 2009, likely because of the economic recession. Bangladesh is currently the largest Canadian agri-commodity buyer in South Asia. Despite strong trade relations with the country, Canada does not export significant amounts of beef and veal or chicken to the country. As one of Canada’s largest trading partners in the region, Canadian exporters will find a lucrative halal market in the predominantly Muslim country.

Potential Markets for Canadian Exporters


Poultry exports to Pakistan have increased 341% since 2005, and have seen a steady increase between 2008 and 2010. As Canadian exporters have already entered the poultry industry in Pakistan. there are several opportunities to export other meats and products that adhere to halal requirements. Canadian exporters have already entered the beef and veal markets of both Indonesia and Egypt. Two of Canada’s largest halal export markets in this category. This foothold will allow exporters to offer a wider range of products to consumers in these countries, including halal poultry and other halal products.

Potential Markets for Canadian Exporters


HALAL IN AMERICA

Certifying Organization: Islamic Food and Nutrition Council of America IFANCA halal certification is recognized by: !  United States Department of Agriculture (USDA) !  Majlis Ugama Islam Singapura (MUIS) (Singapore) !  Jabatan Kemajuan Islam Malaysia (JAKIM) !  Muslim World League (MWL) (Saudi Arabia) !  Majelis Ulama Indonesia (MUI) !  Islamic Committee Office of Thailand !  Philippine Halal Association !  United Arab Emirates (UAE) Municipalities




HALAL IN EUROPE

•  Halal is no longer a taboo in Europe as awareness about halal products and certification has notably increased over the last couple of years.

•  Advertising, certification and labels are also on the rise in Europe, particularly in France with estimated 5 million Muslim population. (Tieman, M, 2010, http://www.logasiamag.com/article/halal-logistics/1744)

•  The European Supermarkets are now aggressively pursuing the Halal food retailing. The Global Market Potential of Halal, International Conference & Expo on Halal Industry , Lahore, Pakistan , 2010

•  Russia & other markets – need to create awareness mitrans 2012


Europe - The Port of Marseille •  The Port of Marseille- with the strong support of the Malaysian government, is

actively developing this Halal Logistic sector.

•  The idea was officially launched in 2012 by the Port of Marseille, when the launch of the ‘Hub to Hub Halal Logistics’ was set up with.

•  Port of Marseille- is a unique tool to enter western markets.

•  Minimizing risks for mass distribution players, the system will enhance business opportunities, including in western mature markets.

•  An open door to outsiders in markets locked by multinationals.

•  A potential bridge to emerging markets : from the sole transportation of Halal finished products to the integration of these products into downstream business development adapted to local markets : Africa and Asia can be served from South of Europe

Giraud. J – (HBD, PoM) World Halal Forum – Kuala Lumpur, Monday 4th April 2011


Europe - Port of Rotterdam In the Netherlands, the Port of Rotterdam started with a consortium back in 2005 with Eurofrigo (Cold Room Warehousing) and VAT Logistics (logistics service provider) to provide halal logistics services and promote the halal gateway to Europe. (Tieman, M, 2010, http://www.logasiamag.com/article/halal-logistics/1744)


Opportunities for Malaysia in Europe

•  There remains a need to harmonize the halal standards in Europe, to

simplify halal for the consumer and meet the diverse needs of the European consumers.

•  Halal now being a global business and the international halal logistics standard is important where Malaysia Sandard is globally used as benchmark. (Tieman, M 2009)

–  Malaysian Government expertise needed by European Companies in order to set up the Halal Logistic Business (e.g PoM).

•  Help Malaysian Enterpreneurs to enter the market


Opportunities for Malaysia in Europe

• Port of Marseille- able to serve a potential target of 220 million consumers across Europe and the Mediterranean region.

Giraud. J – (HBD, PoM) World Halal Forum – Kuala Lumpur, Monday 4th April 2011 • Port of Rotterdam - is currently creating a “Halal DistriPark “ to serve 30 Million Muslims in Europe.




BELGIUM


Australia • Australia have capitalized on their image as high quality, safe and reliable food suppliers.

• Australia is one of the largest exporter to halal meat and mutton.

• Australia holds the largest market share in Indonesia of dairy products, beef, seafood, fresh fruits, vegetables and few processed products. More than 80% of Australia's cattle exports go to Indonesia.

• Meat & Livestock Australia (MLA), for example, has launched a halal brand for Australian meat in the Middle East, in recognition of the increased sophistication of meat retailing throughout the Muslim world.

http://www.worldhalalfood.com/HalalInfo/HRHalalLogistics1.aspx


Opportunities for Malaysia in Australia

• Malaysia has been particularly active and was the first country to introduce a halal logistics standard, now recognized globally as a benchmark (Tieman, M 2009). Malaysia can provide halal logistic expertise to Australian exporters in entering new market such as Europe and Africa.

• Malaysian Brand as a halal superpower can help Australian exporter to enter Market for Islamic countries e.g Middle East Countries.

• http://www.worldhalalfood.com/HalalInfo/HRHalalLogistics1.aspx


Implementation of Halal Logistics - Push Factor


!  The Cooperation Council for the Arab States of the Gulf (CCASG; Arabic: !"#$%&$ '(&)&$ &*+& ,*$-.&$ "&'/‎), also known as the Gulf Cooperation Council (GCC; ,*$-.&$ "&'/ ('(&)&$), is a political and economic union of the Arab states bordering the Persian Gulf and located on or near the Arabian Peninsula, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. Jordan and Morocco have been invited to join the council

!  Among the highest economy and GDP of OIC members

countries

GCC COUNTRIES

Source : Wikipedia

GBI 795 – UiTM Shah Alam Source : Wikipedia


Darhim Dali Hashim, CEO IHI, Malaysia, 2011


Darhim Dali Hashim, CEO IHI, Malaysia, 2011



Report from Brazilian Chicken Producers andexporters association (ABEF), 2011


GCC COULD FORCE BRAZIL TO FULLFILL

THE HALAL LOGISTICS STANDARD



CONCLUSION

-  The awareness still low -  Room for improvement -  Need a “Halal logistics @ Halal Supply Chain” logo? -  Less required in Muslim country -  Issue in Muslim's minority country -  Too focus on Halal of products and services -  Increase cost of doing business


THANK YOU

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Halal logistics in malaysia and 5 continents

Education