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The challenges and opportunities of Halal Logistics in Indonesia

SUDARSO KADERI WIRYONOSBM-ITB

2Background

Halal logistics is a new phenomenon, driven by the halal industry to extend halal from source to the point of consumer purchase, to ensure the integrity of the halal product for the end-consumer and export markets,

The conventional logistics handling of halal products does not provide sufficient assurance for the Muslim consumer,

Key disciplines in halal logistics are warehousing, transportation and terminal operations,

3The Concepts

the principles of halal logistics were agreed upon: intention to create a global halal logistics system;

minimize hardship for the halal industry;

define cross contamination between halal and haram and how to avoid it;

create an evolution of a complete halal value chain and supply chain;

benchmark with existing halal standards,

best practices and international standards.

there are two different levels in halal logistics: one for addressing direct contact with haram, risk of contamination and

perception of the Muslim consumer,

and one for addressing only direct contact with haram and risk of contamination

4Halal Products (1)

HALAL Products includes both Food & Non Food Items.

HALAL Food is not only Meat and Poultry but also other Food Items such as:

- Confectionery

- Canned & Frozen Food

- Dairy Produce- Bakery Products

- Organic Food

- Herbal Products

- Beverages etc

5Halal Products (2)

HALAL Products also includes Non-Food products such as:- Cosmetics

- Toiletries

- Beauty products

- Pharmaceuticals

- Leather products

- Perfumes, etc.

6Market Review (1)

Halal is more and more a complete range of product offering in supermarkets chains worldwide, as well as in 5-star hotels and restaurants and fast food chains, airline meals, school dinners, military and even prison rations.

The phenomena applying not only on food items. Personal hygiene and healthcare products, toiletries and cosmetics are all appearing as Halal options. Once Halal is understood as a lifestyle choice, the range of option increases exponentially.

7 Market Review (2)

ASEAN countries are one of the world’s leading suppliers and also importers of HALAL certified products in the world. Although these countries compete in the international front, there has been substantial trading in HALAL products among them. For example Indonesia is the biggest buyer of Malaysian HALAL food.

China is a huge and an untapped market.

Around 80% of the Halal food industry is in the hands of non-Muslims. The Brazilians have been big halal producers for decades. Three-quarters of chickens exported by France are halal.

8Market Review (3)

Players from every sector of the industry, from the huge multinationals down to small enterprises are looking to capture their share of this growing market. Nestle, TESCO, Colgate, etc. are some examples,

More and more Supermarkets and Hypermarkets are adding HALAL Shelves to attract ethnic Muslim population in non-Muslim countries, eg. TESCO in UK and CARREFOUR & AUCHAN in France

9The challenges and opportunities (1)

Halal logistics has been defined as the process of managing the procurement, movement, storage and handling of materials, parts, livestock, semi-finished or finished inventory both food and non-food, and related information and documentation flows through the organization and the supply chain in compliance with the general principles of shariah.

The Halal integrity in the handling, storage, warehousing, and transportation by road, sea and air of Halal certified products, and also dedicated Halal-certified zones are becoming increasingly important.

10The challenges and opportunities (2)

Because with the movement of Halal products around the world, the increase in awareness of Halal in general, and in turn added value surrounding Halal, and of the holistic and interdependence of the entire Halal value chain, we are seeing entirely new sectors emerging, relating to Halal logistics, security, auditing and industrial development,

11The challenges and opportunities (3)

The factors affecting the integrity of Halal logistics: certification,

Halal standard,

Halal traceability,

Halal dedicated assets,

trust among supply chain members,

commitment of supply chain members; and

role of government, in enhancing the integrity of Halal food supply chain

12The challenges and opportunities (4)

The food products must not only be Halal at the supply chain starting point but throughout the supply chain until it reaches its final destination.

The possibility of becoming non-Halal is greater when the food product needs to travel a greater distance whereby a lot of handling points will be involved.

HALAL Logistics is important to ensure that a HALAL product remains HALAL from its origin to the consumer – Farm to Fork