The Halal Journal - Nov/Dec 2006 by The Halal Journal

| kasehdia.com | www.halaljournal.com | NOV+DEC 2006

AUSTRALIA AU$6.50 • MALAYSIA RM9.90 • SINGAPORE S$5.50 • UAE DHS10 • UK £2.95

PP 13884/ 10/ 2006 | MICA (P) 135/ 12/ 2005

* END OF THE YEAR ISSUE

The Best & The Most Promising of 2006 And What It Means for 2007 Halal Industry Development Corporation Sneak Peak When Halal turns non-Halal THE HIGH-5 BREAD SAGA: What does it mean for the Halal Industry AirAsia Goes Shariah Compliant

HALAL BEEF: Learning from Uruguay

LIVING: ISLAM & THE ENVIRONMENT TAGINE, DUBAI MERCAN DEDE BRAZIL: THE COMEBACK KID OF SOUTH AMERICA COLGATE’S KAYU SUGI

The global Islamic finance industry is in great need for new talent and expertise. The demand is expected to exceed 5000 over the next four years alone. It is for this reason that INCEIF was founded. INCEIF is focussed on producing high calibre professionals equipped with both sound academic knowledge and invaluable practical experience. Nurtured by a faculty of renowned Islamic scholars and financial experts, a Board of Directors chaired by the Governor of Bank Negara Malaysia, and strategic alliances with various leading global institutions of higher learning, INCEIF represents the promise of a new standard of excellence for future generations of Islamic finance professionals. People who are not just industry-ready, but also world-ready.

www.halaljournal.com | ISSN 1823 1411 • PP 13884/ 10/ 2006 • MICA (P) 135/ 12/ 2005

NOV+DEC 2006

24}

HALAL INDUSTRY’S YEAR IN REVIEW:

Looking Forward in Hindsight

contents 22} FEATURE 1

The High-5 Bread Saga: What Does it mean for the Halal Industry?

27} FEATURE 2

Beefing up Export Potential: The Uruguay Experience

30} FEATURE 3

Ramadan Ringgit Rush: Boom for Businesses

34} FEATURE 4

When Halal turns to Haram

36} FEATURE 5

AirAsia Going Shariah? Halal Food, No Alcohol, Halal Funding, you tell us…

39} FASTRACK ASIA

•Colgate Clarifies, and Reassures •All Aboard…for the Halal Express •The Dutch Has Landed…Again!

43} FASTRACK AUSTRALASIA

Halal Gaining Foothold in Australia

45} FASTRACK AFRICA

Promoting Investment in Agriculture

46} FASTRACK EUROPE

The Candyman can... Changing with Chocolates

48} FASTRACK AMERICAS

Where Art Thou Islamic Funding?

50} FINANCE

DISCLAIMER : While all care is taken, the publisher accepts no responsibility for the information contained herein which is believed to be reliable. The publisher/editor takes no responsibility for opinions expressed or implied as they are the writers’ own and do not necessarily reflect that of the publisher or editor who make no warranties governing material, including advertising or features contained within this publication. This publication may not in whole or part, be copied, reproduced or translated without prior written permission of the publisher.

Ed’s Note WHAT A GREAT YEAR FOR HALAL: NOW FOR AN EVEN BETTER ONE NEXT YEAR

My whole aim in life is to bring ASEAN together. Connect them through flights; connect them through food. Dato’ Tony Fernandes, CEO, AirAsia

Regulars 08} QUIETLY SPOKEN Brave enough to get dirty? 08} GLOBAL NEWS Your quick reference of Halal development around the globe, updated Calendar of Events + reader’s poll 14} BETWEEN THE LINES: HDC Gets Underway 15} MATRADE NEWS MATRADE in Dubai and Johannesburg

We have arrived to our end of the year issue in a blink, we feel. For over two years, the Halal Journal has brought you the developments, trials and tribulations of the international Halal market. The year 2006 has been a year of continued new initiatives for the Halal industry. This year saw the birth of the spanking industry driven World Halal Forum and the Government of Malaysia’s new ‘blue-eye’ organisationthe Halal Industry Development Corporation (HDC). Although not much has been mentioned on the HDC, we have a sneak peak of the organisation on page 14. Once Halal has turned into a concept that a whole corporation can be build upon, you tend to stop and wonder. What in the world is the power of Halal as a concept and market? Being the first organisation of its kind in the world, the HDC indeed has a lot of people wondering and speculating on what kind of organisation it will be. There are also a lot of hope and expectations for it. For us at Halal Journal, the HDC has the potential to do a lot of good for the development of the international Halal industry and it is something that we will watch with interest in times to come. In this issue also we have brought you some ideas from Uruguay for the Halal beef market and gave some perspective on the unfortunate Halal bread saga that happened on Malaysian soil recently. We hope you’ll continue to benefit from the latest news of the Halal markets worldwide in every issue and Insya-Allah, we’ll see you again in 2007.

the Halal Journal team

Living 55} ISLAM & THE ENVIRONMENT When will Muslims realise that part of Jihad is also to care for the environment? 58} BROWSING We ate at Tangine in Dubai but were intoxicated by Mercan Dede’s latest album Nefes while reading two books in one sitting (that’s a ﬁrst!).

:: THE HE A R T OF THE HA L A L J OU R NA L :: Halal refers to that which the Creator has made lawful. Its opposite, Haram, refers to what is forbidden. These parameters has been designed for health, safety and benefit of all mankind regardless of age, faith or culture.

62} ON DISPLAY Halal and good stuﬀ currently on the shelf

The realm of the Halal extends beyond the obvious references to food and touches all matters that relate to human life. In the commercial arena, all goods and services, markets, transactions, currencies and other activities come under the judgments of Halal and Haram. These parameters include protecting the environment, humane treatment for animals, ethical investment, the intrinsic value of currencies and fairness in all commercial transactions.

64} PARTING WORDS Meet Kazakhstan’s Halal Chieftain

We believe that the emerging global Halal market will be one of the great market forces in the coming decades.

60} COUNTRY IN FOCUS Brazil: The Comeback Kid of South America

EDITOR Jumaatun Azmi WRITER Kamarul Aznam Kamaruzaman CONTRIBUTING WRITERS Sharifah Shazana Syed Salim Agha Amanda Suriya Ariffin Zurinna Raja Adam Dina Zaman Sakeena Rashid Tong Yee Siong Marco Tieman

KASEHDIA HALAL GUIDES “The world’s first series of Halal food restaurant guides.” Asian Wall Street Journal

Top 3 ‘Best Guide in the World’ for 2004 Gourmand Awards

DIRECTOR, RESEARCH & INTELLIGENCE Abdalhamid Evans PROJECT MANAGER Salama Evans GRAPHIC & DESIGN M. Zailan DIRECTOR, SALES & DISTRIBUTION Nordin Abdullah

CORPORATE MANAGING DIRECTOR Jumaatun Azmi EXECUTIVE DIRECTOR Nordin Abdullah DIRECTORS Abdalhamid Evans Fareen Shazli Ali

PUBLISHER

KASEHDIA SDN BHD

31-2 Plaza Crystalville Jalan 22A/70A, Desa Sri Hartamas 50480 Kuala Lumpur, Malaysia tel: +6 03 6203 1025 fax: +6 03 6203 4072 email: info@halaljournal.com

www.halaljournal.com www.kasehdia.com

PARTNER EVENTS

PERMISSION & REPRINTS The Halal Journal is written and edited for a worldwide audience and is published bimonthly, except for special issues. Materials in The Halal Journal may not be reproduced in any form without the written permission of the publisher. SUBSCRIPTION INFO For subscription and circulation enquiries, address changes and request for copies, please call +6 03 6203 1025 or fax +6 03 6203 4072. To order back issues, please email us at info@kasehdia.com or log on to www.halaljournal.com. The Halal Journal, the name and the logo, are trademark ™ and copyright © 2006 by KasehDia Sdn Bhd. All Rights Reserved. Printed in Malaysia by Art Printing Works Sdn. Bhd.

Available in all major bookstores www.kasehdia.com • info@kasehdia.com

Do we have someone willing to get their

hands dirty?

IF WE accept the fact that an item is Halal until it is proven Haram, then at the time of decision the item has not been declared Haram by the Quran and Sunnah or by a consensus of qualified people, we really need to move on. But then, we have to ask this question - who is that qualified person? Many of those with Shariah qualification have not had the exposure to modern industry processes and would therefore not be much of use to the discussion as they won’t understand the problem fully. To solve this, time and money needs to be invested by the industry to bring the scholars up to speed - a small price to pay to guarantee that all steps have been taken to ensure Halal products or processes. Islamic banking is a good example, where many of the people sitting on the Shariah advisory boards have extensive knowledge of banking. Islamic banking is relatively simple in that sense as it is a narrow field of study, easily demonstrated with contracts, balance sheets and diagrams. The modern food industry, however, is a much more diverse beast. With many sectors and sub-sectors, it requires someone to have at least an understanding of the processes with a strong background in Islamic knowledge before we can even begin to see any real developments. The only solution then seems to be that the learned Islamic scholars who want to make a difference in this field will need to roll their sleeves up and visit the modern factories - be that of the slaughterhouse floors or a high tech packaging facility - and see for themselves what is really going on in there and how can they help to improve hj things - the Halal way. THE HALAL JOURNAL

Mark Piet

Quietly Spoken

GlobalNEWS

UAE

HALAL FOOD COMPANIES URGED TO SHAPE UP OR LOSE OUT

Food companies in the UAE should prepare for a wave of Halal market competition from outside Halal food producers, industry experts said. Most food companies in the region have not understood the direction the global Halal market is taking, and they may lose out on a chance to eke out a bigger share of the market if they do not adopt contemporary industry trends, said Nordin Abdullah, executive director of Malaysia-based KasehDia research and consultancy group. “Food companies in most Middle Eastern countries take their consumers for granted. Compared to buyers of Halal food in other countries, consumers in overwhelmingly Muslim countries accept what is offered to them without much questioning,” Nordin said. “The Halal wave has already happened in Southeast Asia, Europe and Africa. It is just starting in the Arab world and consumers are becoming more conscious of Halal branding of food products,” he added. According to Nordin, some companies have gauged the market mood early and are wellplaced to gain from the growing Halal market. “Companies like Co-Op Islami in the UAE have taken an early lead in adopting Halal standards, Nestle also follows the rules. In Britain, supermarket chain Tesco has decided to procure one billion Ringgit (about Dh1 billion) worth of Halal food products from Malaysia for its Muslim customers in London alone,” he said. Turkey is adopting Halal labelling for its food products in order to tap the European market. Consumers will buy Halal products from non-Arab companies if they do not find properly certified products originating from the region, Nordin asserted. A study carried out by KasehDia puts the global retail market in Halal food at US$580 billion a year. The research is based on per capita expenditure on food by Muslims. “It is an estimate, but this is the best assessment we have through our studies,” Nordin said. | SOURCE: GULFNEWS, 18/9/2006 MALAYSIA

M’SIA TO BE MORE AGGRESSIVE TO DOMINATE GLOBAL HALAL MARKET

Malaysia has stamped a bigger authority over the global development of Halal as the government allocates a significant percentage for the industry within next year’s national budget. Tabling the 2007 Budget at the Dewan Rakyat, Malaysia’s prime minister who is also the finance minister, Dato’ Seri Abdullah Ahmad Badawi unveiled a total allocation of approximately RM100 million to help boost efforts to make Malaysia an international Halal hub. Topping the list is the formation of Halal Industry Development Corporation (HDC), to be established under the Prime Minister’s Department with a launching grant of RM25 million, “to coordinate and ensure the integrated and comprehensive development of Malaysia’s Halal industry for both the public and private sectors,” said Abdullah. Aside from this primary objective, HDC will also coordinate efforts to review standards, develop the local industry, promote Malaysian Halal products and services in international markets, as well as support investments in the domestic Halal sector. The Malaysian Halal International Showcase (MIHAS) and The World Halal Forum have both been earmarked as two annual events that will help provide suitable platforms to achieve this objective. In addition to HDC’s RM25 million launching grant, a sum of RM50 million was also allocated within the 2007 Budget to set up four more Halal parks around the country, to be located in Pasir Mas, Kelantan, Gambang, Pahang; Chendering, Terengganu and Padang Besar, Perlis. The SME Bank has also been allocated RM20 million fund to finance entrepreneurs related to Halal industry. | SOURCE: HALALJOURNAL.COM, 2/9/2006

UAE

AUSTRALIAN BEEF SALES DOUBLE IN UAE

Meat & Livestock Australia (MLA) recently announced that the demand and consumption of Australian beef per month has nearly doubled in the United Arab Emirates. One year ago, about 10 to 12 tonnes of Australian beef was consumed per month but the amount has now shot up to about 20 tonnes per month, in a market that consumes about a 100 tonnes of beef per month. Ian Ross, Regional Manager of Meat & Livestock Australia Limited (MLA) commented, “Among the many factors that have helped in increasing the demand for Australian beef is the increase of sophistication in society. People in the UAE are more conscious about fine dining and all the elements that go with it. Everyone is more aware of healthy food, of what to order and how to order it, what food complements what beverage and much more. And everyone also knows that good beef means Australian beef. ” Other factors working to the advantage of Australian beef products in the UAE over the past two years include the fact that the UAE has always been a very attractive meat importer for companies worldwide. The reasons for which are many. 20

MEAT & LIVESTOCK AUSTRALIA (MLA)

tonnes per month

COUNTRY: UAE

AUSTRALIAN BEEF CONSUMPTION PER MONTH 10

2005

2006

It has high disposable incomes, liberal trade policies, zero or low import duties and limited local production of meat. Moreover, the general prosperity in the UAE has also meant that eating out is fast growing as a trend due to the higher incomes and increasing numbers of working women. Another important and very visible reason is also the huge construction boom. A host of international hotel chains have opened their doors across the UAE and more specifically in Dubai, the new business hub of the region. “Honestly, who would have said two years back that we would be serving Wagyu in most parts of the Middle East today,” added Australian meat exporter Hamish Mckerrow of Australian Quality Plus. | SOURCE: MENA REPORT, 3/10/2006

“Indonesia and Malaysia have their own form of Islam that is much more integrated into the globalised world, but it was only for local consumption.They don’t claim to be a spokesman for Islam, and the Arabs don’t want them. It’s not a linguistic problem,” Vali Nasr, an expert on contemporary Islam at the Naval Postgraduate School, in Monterrey, California.

INDONESIA

WARY OF ARAB VOICES, WEST PROMOTES MALAY VIEWS ON ISLAM

Western governments and institutions, eager to dilute what they see as Arab radicalism, are actively encouraging the translation of works by Malay-speaking Muslims from across Southeast Asia. Drawn to the region’s history of pluralism and its recent experience with democracy, supporters say Islamic thought from Indonesia, Malaysia, Philippines and Thailand has a lot to offer the modern world - if only language were not a barrier. But some experts say the traditions of Islam, its heart and head rooted in the Arab Middle East, and the insular nature of the approximately 234 million Malay Muslims themselves, could blunt the effort’s impact. “There is very progressive thought in Indonesia, but it doesn’t get out,” said Robin Bush, of the US-based Asia Foundation, which helped launch the budding translation movement. “The perception is Southeast Asia is much more complex, historically and culturally, than the Arab world,” said Bush, deputy head of the Asia Foundation’s Indonesia office. Funding for the effort has also come from such organizations as the Ford Foundation, with additional support from Western embassies. “Too much of the Islamic tradition derives from the Middle East, from so many centuries ago,” said Lily Zakiyah Munir, a Jakarta-based intellectual promoting Malay Muslim writings. “We want to show the relevance of contemporary (religious) issues ... and promote the humanitarian side of the religion,” she said. Few Malay-Muslims write in English or Arabic and even fewer Muslims outside the region know the Malay languages. Later plans call for translations directly into Arabic. Among those produced so far are “Understanding Women in Islam: An Indonesian Perspective,” by Syafiq Hasym, and “Indonesia, Islam, and Democracy,” by Azyumardi Azra. Both books are said to highlight modernist elements in Southeast Asian Islam, the relatively prominent role for women in public life; and general support for democratic norms and practices. Proponents also say Islam’s history of gradual spread throughout the region, by commercial interests and cultural advance rather than battle, makes it an effective counterweight to the traditions of the tumultuous Arab world. “Indonesia is a moderate Muslim country and these views can be very helpful in contrast to the militant voice of Arab Muslims today,” said a diplomat from one Western country that helped fund the translations. But Vali Nasr, an expert on contemporary Islam at the Naval Postgraduate School, in Monterrey, California, said such works were unlikely to find acceptance among Arab Muslims. “Arabs are perfectly happy to export their ideas, but they are not very good at importing,” he said by telephone. What’s more, important developments in Southeast Asian Muslim societies, such as the advance of pluralistic democracy, were never seen as universal prescriptions. “Indonesia and Malaysia have their own form of Islam that is much more integrated into the globalised world, but it was only for local consumption. “They don’t claim to be a spokesman for Islam, and the Arabs don’t want them. It’s not a linguistic problem,” Nasr said. | SOURCE: REUTERS, 28/9/2006 THE HALAL JOURNAL

GlobalNEWS HOLLAND

ROTTERDAM TO HAVE ISLAMIC HOSPITAL

Paul Sturkenboom wants to build an Islamic hospital in Rotterdam, the first in the Netherlands, as he presented his plan at the Zakenfestival business festival in Rotterdam. Sturkenboom was chairman of the executive board of the Slotervaart hospital in Amsterdam, which was taken over by investors a month ago. He now hopes to build a hospital in Rotterdam within two years where the customs and traditions of the Islamic culture are followed. Food will be Halal and there will be separate wards for men and women. In addition, women will only be treated by female specialists and men only by male doctors. Besides this, an Imam will be present at all times, there will be a separate area for prayer and Islamic medicines and herbs will be used. “There are about a hundred hospitals in the Netherlands based on general or Christian principles, but none at all for the more than a million Muslims living here. They are regularly confronted by problems,” Sturkenboom explained. “For example, they are only able to obtain Halal food sporadically. The result is that they often refuse all hospital meals and have to provide their own food.” The 45 specialists and 275 nursing and paramedical personnel the hospital expects to need do not have to be Muslims themselves. “But they must naturally respect the faith,” Sturkenboom observed. | SOURCE: NIS NEWS BULLETIN, 28/9/2006

BOSNIA

LOCAL COMPANIES TO START HALAL FOOD PRODUCTION

LE T TER S

Six Bosnian food-processing factories are to be given special certificates that their products are produced in accordance with Islamic rules, local media reported recently. Around 450 food products would soon be marked Halal, meaning that those products would be permissible under the shariat - the Islamic system of ordinances - and would contain no pork, blood or fat or any such additives and substances, reports said. A special Agency for Halal-quality Certificates of Bosnia- Herzegovina is to take over responsibility for issuing and withdrawing certificates with the consent of Bosnia’s Islamic Community. The head of the agency, Amir Sakic, said, “Bosnia will be the first European country with the certified Halal standard.” Bosnian businessmen hope the products will soon reach international markets where an estimated 1.8 billion people mostly Muslims use such products. In Bosnia-Herzegovina, Muslims account for nearly 50 per cent of the country’s 4.5 million population. | SOURCE: DEUTSCHE PRESSE-AGENTEUR, 25/9/2006

10 THE HALAL JOURNAL

HALAL JOURNAL ONLINE POLL ARE YOU CONFIDENT THAT THE FRESH MEAT PRODUCTS IN SUPERMARKETS ARE HALAL? 27% NOT SURE 52% NO 21% YES

WOULD GRADUATES WITH HALAL QUALIFICATION BE AN ASSET IN YOUR COMPANY? 90% YES

10% NO

DOES HALAL BECOME MORE IMPORTANT IN RAMADAN?

94% YES

6% NO

SOURCE: WWW.HALALJOURNAL.COM

Letter 1: Halal Sausage Casing Issue Assalamu Alaikum warahmatullahi wabarakatu. I recently attended a Halal Expo in Melbourne, Australia and at one of the stalls I was given The Halal Journal. To my surprise, I saw an article that really made me sad. This is the article: “Malaysia needs to establish a Halal Act, say a few industry observers…The natural casing issue in sausage production is one of the many examples of how some unscrupulous food and beverage producers are taking advantage of Halal certification to fool consumers.” This article consumed me with anger because I am currently a producer of natural Halal casings and I know without a doubt that my plant is the only Halal producing plant in the whole of Australia. Four years ago my wife and I came to Malaysia and approached the Halal Authorities requesting recognition of our plant. We were given forms by the minister in charge who requested that we fill them in and post them back. We did this but never heard of our application again… Just recently in 2005, we had a visit from a Br. Mohamed from Halagel in Malaysia. He was keen to buy casings from us but because we were not Malaysian recognised, we could not proceed. Forms were completed once more and applications were made for the second time. This application was lodged personally by the brother in Malaysia and still no answer. Surely, if the Malaysian Halal Authority is so keen to source Halal casings for the Muslim market, than they should make a concerted effort to visit my factory in Melbourne and certify it. Wassalaam.

Letter 2: Environmental Ethics Assalamulaikum, The extent of potentials for Halal industry to be inclusive of all other legitimate ‘branding’ is certainly vast. My interest in environmental ethics started from initiatives in the advancement of natural and built infrastructures. Since you mentioned the Imarat of Ottoman Turks, I was later introduced to one officer from MCCA of Turkish origin, whose knowledge of the Ottoman Empire is greatly comprehensive. We should look at that model to promote charitable deeds amongst current wealth generators. The private wealth in the Middle East economy had risen drastically in the past decade, but very little of these are passed on to the community in the regions where economic hardships still prevails. I agree that we have to think beyond the shores of Malaysia to promote the values of Islam through Halal products, services and trade. Malaysia has always, since the Sultanate of Malacca, been located right smack in the middle of it all! Wasallam,

Rashid Essop M.D, Supreme Halal Foods Australia

Rahmat B Bayudi International Halal Management Pty Ltd Australia

GlobalNEWS “We believe good CSR (corporate social responsibility) practices are not at the expense of profit. Statistics have shown that the more companies practise CSR, the more profitable they are,” Tan Sri Nor Mohamed Yakcop, Malaysian second finance minister

MUSLIM, JEWISH COMMUNITIES SECURE HALAL-KOSHER LABELLING LAW

Muslim and Jewish communities in the state of Virginia have successfully lobbied for enactment of a Halal / kosher labelling statute. The new Virginia law requires that any food offered for sale as kosher or Halal be labelled with the name of the person or organisation certifying the item kosher or Halal. Violations are punishable by a US$500 fine. Observant Muslims and Jews observe similar, but not identical, dietary restrictions. These practices - Halal for Muslims and kashrut (kosher) for Jews - forbid consumption of certain foods and regulate how animals may be slaughtered.Trained individuals and organizations ensure compliance with these standards and permit vendors to affix their symbol of compliance on the product packaging. In the United States, the “Crescent M” is a leading Halal certification symbol. There are a number of common kosher symbols, or hekhshers. The two communities decided to work together toward the nation’s first joint kosher and Halal statute. With a coalition of Muslim, Jewish and interfaith organizations supporting it, the new law was passed by a unanimous state Senate vote and by 96–2 in the General Assembly. It then was signed into law by Governor Tim Kaine, a Democrat, in the presence of Muslim and Jewish community leaders in early August. With the new law in place, the onus for selling mislabelled food now falls on the vendor, said Muneer A. Baig, vice president of the non-profit Muslim Association of America. Partnership between communities to advocate common goals is the essence of the American political system. “When people work together as partners to humanity” they can achieve success, Baig says. When they work against each other, “we all lose.” | SOURCE: WASHINGTON FILE, 19/9/2006

JOBS BOOST IN TESCO STORE WITH HALAL COUNTER

A Tesco Extra store in UK, said to offer the largest ethnic range of any Tesco store, has a new Halal counter and will need 65 new employees to cope with increasing demand. The four-year-old store at Gallions Reach Shopping Park has increased in size by more than 25 per cent, taking the sales floor to 104,000 sq ft. The store is said to offer customers the largest ethnic range of any UK Tesco. There is also a new Halal counter and the demand for non-food items has more than doubled in the last few years, said store manager Sukwinder Bassi. The 65-plus new posts will take the total number of employees at that store to 520. By its official re-launch, the number of new posts could rise to 80. | SOURCE: NEWHAM RECORDER, 29/9/2006, 2006

BECOME PART OF OUR COMMUNITY AND REGISTER AT

www.halaljournal.com Get exclusive Halal Journal Market Reports, Interviews, Events Reports and a whole host of contents from past issues of the magazine. Existing magazine subscribers get FREE online, so renew yours or sign up for one today! Email info@kasehdia.com.

12 THE HALAL JOURNAL

Calendar of events 13-16 NOVEMBER 2006 9TH ECR ASIA CONFERENCE ECR & FREE TRADE - THE CHALLENGE FOR CROSS BORDER SUPPLY CHAIN MANAGEMENT Kuala Lumpur Convention Centre Federation of Malaysian Manufacturers Tel: +603 6276 1211 Fax: +603 6276 1042 Email: ecrasia2006@fmm.org.my www.ecrasia2006.org 20-21 NOVEMBER 2006 MENA FOOD & INGREDIENTS CONFERENCE 2006 SHERATON CREEK HOTEL AND TOWERS Dubai, UAE Incglobal Tel: +65 6220 2577 Fax: +65 6337 4169 Email: cecille@inc-global.com www.inc-global.com 21-22 NOVEMBER 2006 ASIA RETAIL CONFERENCE Sheraton Imperial Hotel Kuala Lumpur, Malaysia Davos Management Institute Tel: +603 2026 8188 Fax: +603 2026 0388 Email: info@davosmi.org www.davosmi.org 21-24 NOVEMBER 2006 INT’L PALM OIL TRADE FAIR & SEMINAR Shangri-La Hotel Kuala Lumpur, Malaysia Tel: +603 7806 4077 Fax: +603 7806 2272 Email: potsales@mpoc.org.my www.poram.org.my 20-21 NOVEMBER 2006 INTERNATIONAL SOUTHEAST ASIAN COLD CHAIN CONFERENCE & TRADE SHOW Grand Plaza Parkroyal Hotel Penang, Malaysia Tel: +6012 377 3881 Email: info@ColdChainExperts.com www.coldchainexperts.com/m_conferences.php 23-26 NOVEMBER 2006 MUSIAD INT’L TRADE FAIR MACHINERY, TEXTILES & GARMENTS, FURNITURE & DÉCOR, FOOD STUFF CNR Expo Center Istanbul, Turkey Tel: +90 212 213 6100 Fax: +90 212 216 0142 Email: fairs@musiad.org.tr www.musiad.org.tr/fairs 27-29 NOVEMBER 2006 KLIFF AND KLIIFEX 2006 KUALA LUMPUR ISLAMIC FINANCE FORUM INT’L ISLAMIC FINANCE EXPO Putra World Trade Centre Kuala Lumpur, Malaysia Cert Events Sdn Bhd Tel: +603 4108 1439 Fax: +603 4106 1549 Email: habib@cert.com.my www.cert.com.my 28-29 NOVEMBER 2006 F&B MANUFACTURING CONGRESS EXHIBITION AND CONFERENCE Berjaya Times Square Kuala Lumpur, Malaysia Marcus Evans Tel: +603 2723 6600 Fax: +603 2723 6699 Email: TanP@marcusevanskl.co ww.marcusevanskl.com

For centuries, Asian merchants were renowned for their business acumen and foresight. As far as Islamic Banking is concerned, we haven’t lost our touch. At CIMB Islamic, we believe foresight is the key to capture latent opportunities. Perhaps that is why successful companies in Asia trust us – helping us become The Banker’s Islamic Investment Banking House of The Year 2006 and the world’s largest Islamic Bond issuer. So whether you are looking to the future or simply want to make your money work harder for you, CIMB Islamic is ready to think forward on your behalf. Bank on us to see beyond. Call +603 2116 1200 or visit www.cimb.com for more information.

Khazanah Nasional Berhad

Tabreed Corporation

USD750 million Global Exchangeable Sukuk. (Lead Bookrunner)

USD200 million Global Sukuk. (Lead Bookrunner)

Penang Bridge Sdn Bhd

Bank Pembangunan & Infrastruktur Malaysia Berhad

RM695 million Redeemable Secured Serial Sukuk Istisna. (Lead Bookrunner)

RM7 billion Murabahah Medium Term Notes Programme. (Lead Bookrunner)

Putrajaya Holdings Sdn Bhd Rantau Abang Capital Berhad RM10 billion Sukuk Musyarakah Programme comprising RM3 billion Commercial Papers & RM7 billion Medium Term Notes Programme. (Lead Bookrunner)

RM2.2 billion Murabahah Medium Term Notes Programme. (Lead Bookrunner)

FORWARD BANKING

1st Floor Menara Promet, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia. Investment Banking | Consumer Banking | Asset Management

between the lines

HDC Gets Underway On 4th October, the Halal Industry Development Corporation opened its doors; not its own doors, admittedly, as these are still such early days for the HDC that is does not yet have its own doors. Nevertheless, HDC’s chairman Tan Sri Syed Jalaluddin and CEO Dato Jamil Bidin hosted an informal 2-hour session with around ﬁfty of the leading names in Malaysia’s Halal industry to share HDC’s vision and to hear their views. The Halal Journal was there. Words By HAJJ ABDALHAMID EVANS

he primary purpose of the recent meeting was to introduce everyone to the main objectives of the HDC, and to get a cross-section of views and feedback from the main players in the domestic Halal sector. HDC’s overall mission is to be the driving force behind Malaysia’s vision to be a Halal trade and production hub, and for this reason it is important for both Chairman and CEO to have an open and collaborative relationship with the industry, and to have a real grasp of the issues and challenges that shape the local situation. As Tan Sri Syed Jalaluddin stated right from the outset, the HDC is not going to be anyone’s competitor; their job is to act as a catalyst, coordinator and facilitator to bring about everyone else’s success. Success for the local players translates into success for the HDC. Jamil outlined HDC’s main thrusts which cover four broad areas: A) To develop and optimise the Halal standard, auditing and certification process to make it a world-class example; B) to facilitate capacity building for local manufacturers and producers, including overseeing the development of the Halal parks; C) to develop a distinctive national brand for Malaysia’s Halal products and services; and D) to promote inward and outward investment to strengthen Malaysia’s overall Halal market strength. Viewed in the light of the guidelines detailed in the Halal Chapter of the Government’s recently released 3rd Industrial Masterplan (IMP3), the HDC’s overall programme would appear to be pretty much on target. Because the Halal issue crosses so many ministerial and industry sectors, HDC’s initial task is clearly one of speaking to everyone concerned, to do some serious study of the market (both domestic and overseas) and to formulate a roadmap to take Halal to the next level. Hearing the views of the industry players

14 THE HALAL JOURNAL

seemed to us like a good place to start; they are, after all, the ones who do the business of production, manufacture, packaging, distribution and trade in Halal products and services. They are likely to have important insights into what they need to improve and strengthen their own businesses, and the more the HDC can get a real grasp of the issues, the more likely they will be able to piece

HALAL IS NOW ABOUT TO BE TREATED AS AN INDUSTRY, AND NOT JUST AN ADJECTIVE. together an overall strategy for collective success. Needless to say, HDC’s mission is by no means easy; on reflection, it is a somewhat daunting task that will require considerable strength of purpose, determination and patience. It is not an arena where anyone can justifiably expect quick results; indeed, as it is impossible to please all of the people all of the time, especially when attempting to engineer change, the HDC is certain to be the target of criticism from time to time. However, the creation of HDC is in itself a milestone, something that to our knowledge has not been

considered, let alone achieved, in any other country, and it is an initiative to be applauded as evidence of Malaysia’s ideasleadership in the Halal arena. The HDC is itself the fruit of the success of Malaysia’s Halal initiatives over the years and it is these successes that must be built upon. The recent HDC meeting made it clear that the industry players are all keen to see expansion and growth in the Halal sector. There is clearly much to be done to gear up to the next level, but it is encouraging to see that Halal is now about to be treated as an industry, hj and not just an adjective.

MATRADE news

MIHAS 2007 EXPECTS BIGGER PARTICIPATION FROM SOUTH AFRICA

The Malaysian delegates of JAKIM, MIHAS and Matrade being greeted by their South African counterpart.

Matrade director of services & product promotion, En. Zakaria Kamarudin (right) receiving a momento.

The South African National Halaal Authority (SANHA) has agreed to gather their Halal certified companies to exhibit at the 4th Malaysia International Halal Showcase, MIHAS 2007, to be held from May 9 to 13 at the Kuala Lumpur Convention Centre (KLCC) in Kuala Lumpur. Sharing the same enthusiasm were the Muslim Judicial Council (MJC) in Cape Town and the National Independent Halaal Trust (NIHT) in Johannesburg, who will be working together in the interest of creating opportunities for South African Halal producers and entrepreneurs to go a step further by marketing and promoting their Halal-certified products through MIHAS. The Malaysia External Trade Development Corporation (MATRADE) and the MIHAS marketing team were recently in South Africa on a six-day special marketing mission on Halal products and also to promote MIHAS 2007. The mission, which covered the South African cities of Johannesburg, Durban and Cape Town, involved a series of talks on the growing global Halal market and how South African Halal product manufacturers can reach a wider Halal consumer market through MIHAS. Trade matching sessions arranged by MATRADE were also held in each of the three South African cities with the objective of introducing South African trade buyers to Malaysian Halal manufacturers and companies.

2007. “We are encouraged by the good response and we anticipate a stronger representation from South Africa in the form of a pavilion at MIHAS next year,” he said. MATRADE in their efforts to continuously promote MIHAS will also embark on international marketing and promotion tours which will include Australia, United Arab Emirates and Saudi Arabia, among others. MIHAS will also be participating in the Halal London – World Food Market from November 29 to 30, 2006 in London, UK. MIHAS is Malaysia’s largest food and beverage trade fair and the world’s largest international trade fair for the marketing and procurement of global quality Halal certified products and consumables. Since its inaugural show in 2004, MIHAS has successfully placed itself as the platform for Halal world players to network, trade and discuss issues related to the dynamic growth of the industry. MIHAS is hosted by the Malaysian government and is jointly organised by the Ministry of International Trade and Industry (MITI), the Malaysia External Trade Development Corporation (MATRADE), the Ministry of Entrepreneur and Cooperative Development (MECD) and the Islamic Dakwah Foundation Malaysia (YADIM). MIHAS 2006, which yielded sales of RM168.3 million over two days of business matching, will be holding its fourth exhibition at the Kuala Lumpur Convention Centre (KLCC) in Kuala Lumpur, Malaysia from May 9 to 13, 2007. hj

MATRADE director of services and product promotion, Zakaria Kamarudin, voiced his satisfaction with the outcome of the marketing mission. “Promising ties have been forged during this mission and I believe this augurs well for the nation’s Halal industry, and also particularly for Malaysian Halal manufacturers to be able to penetrate the South African Halal consumer market,” he said. The Department of Islamic Development Malaysia (JAKIM), Top Corridor Sdn. Bhd., DXN Holdings Berhad, Pertima Terengganu Sdn. Bhd., In-Yes Commerce Sdn. Bhd. and Golden Hope Food and Beverages Sdn. Bhd. also participated in this marketing mission. SANHA will work closely with the Minara Chamber of Commerce in Durban to bring Halal producers and industry players from South Africa to participate in MIHAS 2007. The Minara Chamber of Commerce was formed in May 2000 to represent and assist South African Muslim businesses and entrepreneurs. The Chamber is officially recognised by the South African government and has established links with other chambers of commerce. MIHAS chief executive officer Mohd. Shukri Abdullah said the agreement with SANHA and the Minara Chamber of Commerce would boost the number of international participants at MIHAS

For more information contact MATRADE HEADQUATERS 7th Floor, Wisma Sime Darby, Jalan Raja Laut, 50350 Kuala Lumpur, MALAYSIA t +603 2616-3333 f +603 2694-7363 toll free 1 800 88 7280 e-mail info@matrade.gov.my

THE HALAL JOURNAL 15

feature highlights

WORLD HALAL FORUM

-INDUSTRY DIALOGUE: THAILAND PROPAGATING THE HALAL SCIENCE CULTURE Several key areas were discussed during the industry dialogue, especially on the urgent need for the development of Halal science by the Muslims, or the fact that modern scientific methods needed to be used for the development and promotion of good Halal practices. Dr.Winai Dahlan stressed the need for collaboration especially in the area of science to bridge the gap between the industry and Islamic scholars, or ulamas, and the development of a global Halal standard. With this general understanding, the need for formation of a “Halal Science and Research Network” became evident. It would not only demonstrate the readiness on the technicalities of Halal science but could also protect Muslim consumers in getting quality and fully compliant Halal foods and products, “to help preserve the Muslim consumer’s dignity and faith,” said Dr. Winai. In Thailand, the efforts to uplift the local Halal food production standards are well taken care of by the Halal Science Centre (HSC) at Chulalongkorn University. With a mission to merge Halal requirements with Islamic law and international food quality standards, HSC aims to ultimately introduce a GMP/HACCP equivalent Halal standard that is both comprehensive and practical for the food industry. With its flagship Halal Industrial Capacity Building program, the centre has so far included 100 major food factories with approximately 100,000 food-related employees in the project. The Halal Science Centre has also developed the “non-pork buffered Halal kitchen” system. It was first established for the Thai Airways or TG kitchen in Thailand’s new Suvarnabhumi International Airport, but the system can also be incorporated into other Halal kitchens for restaurants, hotels, and hospitals to serve the Muslim consumers especially those from the Middle East with interests in medical and tourism services in Thailand. As Dr. Winai pointed out, “Manufacturing processes that goes along with the expanding market will be more developed with better quality and standards.”

As an adjunct to the Asian Middle East Dialog (AMED) held in Bangkok, The World Halal Forum recently held a high level discussion, or industry dialogue, with key individuals within the areas of Halal science and Islamic banking in Thailand, prior to the 1st International Halal Science Symposium last September. The fact that Halal is more and more on the agenda of international meetings gave further proof that the Halal industry sector is truly coming of age. The main aim of the dialogue was to drive home the point that the Halal industry should actually put lessons learned and creative initiatives into practice by adopting a concrete work plan that would yield tangible results. This is not merely to comply with Halal certification standards but also to promote the Halal food industry as well in line with the Thai government’s emphasis on science and technology to promote the manufacturing and trade of Halal products. Their focus within this arena is evident as Thailand is ranked the 14th largest exporter of food products in the world.

According to Assoc. Prof. Dr.Winai Dahlan, head of the Halal Science Centre, Chulalongkorn University, Thailand, the Halal food market within the U.S. and Europe can be immediate target markets for the local Halal industry. Although these are non-Muslim regions, they are 15 to 20-fold larger than those of the average Muslim countries, much larger than many anticipate.

From left, a representative of the Thai Airways, Dr. Winai, Nordin and Hajj Abdalhamid during an MOU signing ceremony.

Some of the delegates at the industry dialogue. Hajj Abdalhamid shaking hands with Prof Yaakob Che Man of UPM.

DIALOGUE RESOLUTION It was agreed at the end of the dialogue on the formation of a “Halal Science and Research Network”, to be placed under the World Halal Forum and to be jointly co-chaired by Malaysia and Thailand with Dr. Winai Dahlan taking a leading role. A Memorandum of Understanding was also signed between The International Halal Industry Alliance (IHI Alliance) and The Chulalongkorn University Thailand to complete this. The MOU was formally signed at the 1st International Halal Science Symposium organised by the none other than the Halal Science Centre, Chulalongkorn University, Bangkok.

ISLAMIC BANKING IN THAILAND The recent WHF Industry Dialogue: Thailand also highlighted some of the challenges faced by the Islamic Bank of Thailand within the current regulatory frame work, as well as the need to further develop the local Islamic banking sector. Also discussed was for the need for the Thai Muslims to actually start using Islamic banking services. It was highlighted that the Islamic Bank of Thailand can also be used as a catalyst to develop the Halal industry in Thailand’s southern region that could integrate the Muslims more into the nation’s economy.

16 THE HALAL JOURNAL

Delicious Thai Halal foods.

Key People in Dialogue

Among the key people who attended the dialogue include: • Nordin Abdullah, Director, World Halal Forum • Assoc. Prof. Dr.Winai Dahlan, Head of the Halal Science Center, Chulalongkorn University Thailand) • Assoc. Prof. Jongjit Angkatavanich, Halal Science Center, Chulalongkorn University Thailand) • Amirut, Head of the Islamic Chamber of Commerce, Thailand • Shahlan Hairalah, Head Halal Certification Strategic Unit, Majlis Ugama Islam Singapore (MUIS) • Issa Gammoh, Assistant CEO, Jordan Investment Board • Dheerasak Suwannayos, Chairman, Executive Board of Directors and Acting President of Islamic Bank of Thailand • Suwan Damnerthong, Managing Director Shariah Banking Services, Krung Thai Bank.

feature highlights

WORLD HALAL FORUM

-INDUSTRY DIALOGUE: AUSTRALIA The World Halal Forum held yet another dialogue with local Halal industry players, this time in Melbourne, Australia. This one day event that was held on the 18th September in conjunction with the 1st Australian Halal Trade 2006, held at the Royal Exhibition Hall in Melbourne. The event was attended by 55 decision makers from many sectors in Australia. It was designed to address two key areas of concern within the Halal industry in Australia including certification and audit and the local meat and dairy industry. Richard Dilla Riva, shadow minister for the Australian trade and export ministry aptly summarises the importance for Halal for Australia: “It is crucial for Australia in the delivery and understanding of the importance of Halal. There is an estimated two billion Muslims across the globe with the Halal food market internationally worth hundreds of billions of US dollars each year - and with the Muslim population now making one quarter of the world’s population, the market opportunities are outstanding,” he said. HALAL CERTIFICATION AND AUDIT From the previous World Halal Forum held in May at Kuala Lumpur, it was clear that the Australian meat industry had made major improvements internally to ensure that integrity of Halal was taken more seriously by all parties involved. Some of the strides forward made since then include the registration by the federal governments, represented here by the Australian Quarantine and Inspection Service (AQIS) of Muslim slaughtermen under a certification agencies’ accreditation program, as well as establishing a standard customer requirement approach to Halal standards. These efforts were highlighted throughout the day. If implemented successfully it could even be used as a role model for other countries to adopt. Australia’s Halal standard

is based on the Australian Standard and the Australian Government Supervised Muslim Slaughter program (AGSMS). The AGSMS provides a single Halal standard and takes into account animal welfare, from slaughtering right through to processing and product integrity. This invariably would include NLIS and NVD standards for slaughtering, competency and training modules. AUSTRALIAN HALAL MEAT INDUSTRY All Islamic certifiers must be accredited and subject to audit by AQIS. As the case with many other non-Muslim countries, the domestic certification bodies often fight amongst themselves for market share. In this regard, the Australian Federation of Islamic Councils (AFIC) has positioned itself as the leading certification agency in the country, having had the advantage of a wider social agenda that includes the development of Muslims within the Australian context. “Malaysia has accredited three Australian beef slaughter establishments to resume meat export to Australia and we would like to see Malaysia being encouraged to accredit more Australian establishments that apply to Halal. It is anticipated that, in the future, AQIS expects to provide to Australia a list of additional Australian abattoirs for their consideration,” Riva added. “What I think as the immediate challenge facing the Halal business community is to establish some level of certification benchmarking which provides consistency, uniformity and certainty for all involved,” Riva added. OTHER MATTERS ARISING Dr. Rahim Ghouse from the Muslim Community Co-operative Australia Ltd spoke of the opportunities of attracting foreign direct investment into the country especially into the Halal industry. One key area would be to look at the Middle East for a viable source of venture capital.

The VIP, Richard Dilla Riva with the organisers.

Richard Dilla Riva, Shadow Minister of Australian Trade and Export Ministry.

Speaker John Hayes of Australian Meat Industry Council making a point.

Some of the delegates at the dialogue.

JAKIM’s director of Halal hub division, En. Hassan Pahmi stressing a point.

It is also clear that the animal rights groups in Australia will play a role in the development of the Halal Industry. It was therefore proposed that a charter of animal rights be drafted Dr. Tawfique Chowdhury, director of Al-Kauthar Institute. DIALOGUE RESOLUTIONS 01 To draw up the formulation of the Islamic Charter for Animal Welfare based on the Shariah as a guide, to be tabled at the annual World Halal Forum in May 2007. 02 To invite Australian participation in the ongoing Halal Science projects being undertaken by Thailand and Malaysia.

03 To invite Australia to make a presentation at the World Halal Forum 2007 on the recent developments within the Australian Halal industry 04 To request for the Australian Halal meat sector to apply the same standards for the domestic market as they do for the export markets. 05 For more training to be conducted, possibly under the auspices of AFIC, to develop the human resource potential within the Muslim community to contribute to the Halal industry. hj Check out the www.halaljournal.com for a more detail report on this event.

THE HALAL JOURNAL 17

feature highlights

Kuala Lumpur International Islamic Finance Expo (KLIIFEX 2006)

Food & Beverage Manufacturing Asia Congress

Islamic banking and finance has shown its resilience to be one of the major financial players in a niche local and global mainstream financial industry. In recent years, we have seen the rising number of Islamic based financial institution which indicates the interest of the bank operators as well as the general public to turn to the Shariah based products and services. The development of this industry has contributed a significant change in many parts of the Muslim world including Malaysia. As one of the fastest growing Muslim country, Malaysia has structured its agenda towards becoming the hub for this dynamic industry. In accelerating the development and spurring the full potential of Islamic banking and finance, the Association of Islamic Banking Institutions Malaysia (AIBIM) and Centre for Research & Training (CERT) will be organising the Kuala Lumpur International Islamic Finance Expo (KLIIFEX 2006) this November. With globalisation now the name of the game, “Islamic Finance: Maturing Towards A Globalised Market” has been chosen as a theme for this premier event. KLIIFEX 2006 will be held back-to-back with the 3rd Kuala Lumpur Islamic Finance Forum (KLIFF 2006). It is organised under the auspices of Bank Negara Malaysia and Securities Commission of Malaysia. The expo is scheduled for 24 – 28 November 2006 and KLIFF 2006 for 27 – 29 November 2006. Both events are to be held at Putra World Trade Centre (PWTC) Kuala Lumpur, Malaysia. KLIIFEX 2006 is designed to be a grand premier event which includes exhibition, muzakarah, convention, seminar and forum

Recent advancements in food technology have meant that sustainable development is coming under increased scrutiny. Additionally, food and beverage supply chains have been undergoing major enhancements, improving worldwide trade, production and distribution in the F&B industry. In turn, this has enabled the ongoing issues of food shortages and chronic malnutrition to be tackled more effectively, particularly in developing countries, which tend to be the most affected. There are significant number of food processing factories in Asia, which are constantly undergoing expansion and development to meet the projected population growth in the region. Moreover, the government of Malaysia is setting up and promoting the country as a global Halal food hub. Plans are in for Malaysia to become the centre for the processing and packaging of Muslim food, working closely with major companies in the Middle East. For these reasons, Marcus Evans will be hosting this year’s Food & Beverage Manufacturing Asia Congress 2006 in Kuala Lumpur. The event will bring together top-level decision makers from across Asia Pacific and worldwide to discuss the key issues in food production. As the nominated Halal food hub of the world, Kuala Lumpur is the ideal place to host the event. The congress will bring together solution providers and practitioners, providing an excellent platform for business to be conducted, ensuring Malaysia’s food and beverage manufacturing industry continues to prosper and develop for the future.

24 – 29 November 2006 Putra World Trade Centre (PWTC) Kuala Lumpur, Malaysia.

18 THE HALAL JOURNAL

at one place and time. During these six-day premier Islamic finance showcases, 10 big events including the prestigious annual event, 3rd Kuala Lumpur Islamic Finance Forum (KLIFF 2006), will be organised to enable KLIIFEX 2006 to be the best platform to cater the different requirements and needs of each level of audience. KLIFF 2006 will gather a pool of industry experts ranging from regulatory authorities, Shariah scholars, bankers, legal practitioners, Takaful operators, consultants and academicians to share with the delegates their views and experiences in developing Islamic banking and finance around the globe. Other events to look forward to are the Colloquium on Islamic Finance, National Muzakarah for Shariah Advisors of Islamic Banking and Finance 2006, National Convention on Takaful and Islamic Unit Trust Advisors, Governor’s Award for Islamic Finance 2006, 4th AIBIM’s Gala Dinner 2006, Essay Competition on Islamic Finance 2006, Exhibition on History of Islamic Banking and Finance, and Quiz on Islamic Finance for secondary school students. Besides, these showcases will provide unique opportunities for participants to extend their network with prominent figures in Islamic banking and finance worldwide, as well as for meeting potential clients. For more information on the events, kindly contact Zarina (zarina@cert.com.my) or Hafizah (hafizah@cert.com.my), or call Cert Events Sdn Bhd at 603-4108 1439 or Addellan (admin@aibim. com) at AIBIM at 603-2611 2096. Alternatively, log on to www.kliifex. com or www.kliff2006.com. hj

28 – 29 November 2006 Berjaya Times Square Convention Centre Kuala Lumpur, Malaysia

CONFERENCE OBJECTIVE: To provide an ideal platform to learn, network and discover the impact of issues and concerns in achieving manufacturing excellence. CONFERENCE AGENDA: Stream 1: Food science & technology Stream 2: Operation optimisation Stream 3: Food safety Stream 4: Emerging Halal trade Stream 5: Quality Assurance BENEFITS INCLUDE: • Discovering best practices in reducing food production costs while maintaining food quality • Utilising the best techniques in energy efficiency to reduce the impact of rising fuel prices on food production costs • Enhancing the quality and safety of food with new international food standards and qualifications • Gathering the latest information on Halal food and beverage as an emerging trade • Uncovering the latest technologies in reducing waste during the production cycle • Investigating the application of the hottest technologies and innovations in food science research and development • Acquiring up to date technologies and methods to keep processed food safe • Networking and benchmarking with the leaders and experts in the food and beverage manufacturing industry For further information on exhibiting or conference, please contact Ms. Tan Peng Pheng at +603-2723 6614 or email TanP@marcusevanskl.com. hj

KUALA LUMPUR INTERNATIONAL ISLAMIC FINANCE EXPO (KLIIFEX 2006) “Islamic Finance: Maturing Towards A Globalised Market”

“

A premier of Islamic financial services showcase

“

Oﬃcial Opening Address by Y.A.B Datuk Seri Abdullah Ahmad Badawi Prime Minister of Malaysia 24 – 29 November 2006 Putra World Trade Centre (PWTC), Kuala Lumpur MALAYSIA

ww w.kliife x. co m

www.k liff2 0 0 6 .c o m

MAIN HIGHLIGHTS / ACTIVITIES ? ? ? ? ? ? ? ? ? ?

Islamic Banking and Finance Exhibition 3rd Kuala Lumpur Islamic Finance Forum (KLIFF 2006) Colloquium on Islamic Finance National Muzakarah for Shariah Advisors of Islamic Banking and Finance 2006 National Convention on Takaful and Islamic Unit Trust Advisors Governor’s Award for Islamic Finance 2006 4th AIBIM’s Gala Dinner 2006 Essay Competition on Islamic Finance 2006 Exhibition on History of Islamic Banking and Finance Quiz on Islamic Finance

KUALA LUMPUR ISLAMIC FINANCE FORUM (3rd KLIFF 2006) 27 - 29 November 2006 Putra World Trade Centre (PWTC), Kuala Lumpur Malaysia

Jointly organised by

PERBANKAN ISLAM

Under the auspices of

Bank Negara Malaysia

Association of Islamic Banking Institutions Malaysia (AIBIM))

Supported by

Ministry of Finance Malaysia

Media partner

Registration for booth & conference Cert Events Sdn. Bhd. (665109-H) Website: www.cert.com.my Zarina/Haﬁzah/Habib (Secretariat) Tel : (+603) 41081439 Fax : (+603) 41061549 Email : zarina@cert.com.my haﬁzah@cert.com.my

Association of Islamic Banking Institutions Malaysia (AIBIM) Website: www.aibim.com Addellan Jusop (Secretariat) Tel : (+603) 26112096 Fax : (+603) 26112097 Email : admin@aibim.com

Many industry insiders agree th at the recent exposé over Halal compliance was not only uncalled for but also did not leave much to be desired. Where then, does the industry draw the line?

Looking at the Bigger Picture

Words By KAMARUL AZNAM KAMARUZAMAN & HJH. SALAMA EVANS

22 THE HALAL JOURNAL

ulticultural Malaysia was recently rocked by news that a popular bread manufacturer decided to halt its operation voluntarily for two weeks after its Nilai plant was allegedly found to be unhygienic. They were also accused of using a bread releasing agent that allegedly did not have Halal certification. The local bread manufacturer, Stanson Bakeries Sdn Bhd, Malaysia’s second largest bread manufacturer after Singapore-based Gardenia, voluntarily suspended its operation

for two weeks with immediate effect after a group which included the Muslim Consumer Association of Malaysia (PPIM), the Islamic Development Department of Malaysia (JAKIM), Ministry of Health, Ministry of Domestic Trade and Consumer Affairs and the Immigration Department, visited the factory on September 6. According to Dato’ Dr. Maamor Osman, secretary general of PPIM who initiated the visit, they had allegedly received complaints about manufacturing conditions

within the factory and that they had received evidence from pictures sent in by someone three weeks earlier. Samples were taken for laboratory analysis and within two weeks, JAKIM announced that there was no DNA of animal-origin found in the releasing agent. As for being unhygienic, the claims were found to be unsubstantiated and the self-imposed ban was lifted. The company was expected to go about doing their usual business but no statement of apologies nor retractions were offered.

To Stanson Bakeries group managing director Jackson Tan, with his 35 years of experience within the bakery industry, the recent episode was simply appalling and uncalled for, especially when they have been proven innocent. “It was unprecedented in the entire world of bakery industry. What do you want me to do? Sue them? What good would that do?” he said. “If we want to push Malaysia as a Halal hub, we cannot afford to highlight petty issues such as these, because everybody will be laughing at us,” said our sources in JAKIM. “Like the sausage casing issue last year, we even get calls from friends all over the world asking about problems with our Halal certification. It’s that serious.” Our source went on to suggest that the government or the newly created Halal Industry Development Corporation (HDC) should consider screening all media releases on issues pertaining to Halal development in Malaysia. This would not only ensure consistency in every angle of reporting but would also safeguard the integrity of JAKIM’s highly regarded Halal certificates.

This is not the first time such

incident has happened. What could have been settled diplomatically had in fact turned into an ugly free-for-all, which is frankly, quite embarrassing. “This is actually history repeating itself. Two weeks after the sausage casing fiasco, JAKIM’s director general made an announcement that if there is no solid evidence, do not make accusations. The Prime Minister also interfered and ordered to stop discussing Halal issues. It did stop for awhile, but obviously not for long,” said the JAKIM officer. Islamic adab requires us to be courteous and mindful of others around us, be it Muslims or non Muslims. If the bread maker was suspected of using non-Halal certified oil, then the next appropriate step would be to check if it was in fact non Halal, and whether it was a mere oversight or a blatant disregard of Shariah requirements. Given that a non Muslim cannot be expected to know all the details of the Shariah, in cases of noncompliance, then we must educate them and let them make efforts to remedy the problem in good faith. The failure on our part to act diplomatically or within the norms of acceptable values only raises more questions about the true motives of such attacks. “Recent cases have in fact shown that a certain amount of slander has taken place using the Halal aspect,” said Nordin Abdullah, director of the World Halal Forum. He reasoned that until every appropriate channel of communication has been exhausted and until conclusive evidence is produced to support the claim, there is no other logical explanation than to categorise them as slander. Though Stanson Bakeries has already established a Halal Committee internally, this incident has pushed them to strengthen it even further. They are even considering bringing in outside Shariah scholars for full benefit. Through this, they hope to ensure an incident like this cannot be repeated, especially when they

consider what is at stake - for the company as well as the country. While Malaysia continues to push ahead in unchartered waters to promote Halal in the world arena, such slanderous acts at home should be stopped, as it is making a complete mockery of the government’s resolve to become a global Halal hub, not least in their efforts to introduce a global Halal standard for adoption by all Muslim countries. The Halal Journal has found over time that one of the factors that has stopped the Halal industry from growing is the disputes between various certifying bodies. Fortunately in Malaysia, this is not something we have to contend with. It is something we want to rise above and harmonise and

many of the companies that are producing Halal food are either public listed or non-Muslim owned.”

Despite the recent episode, Stanson Bakeries

have expressed their readiness to continue supporting the government’s vision to become a global Halal hub and to continue promoting Malaysian Halal products overseas. “What we are proud of today is that we are producing Halal products for the region that is made by a home grown Malaysian manufacturer. Regardless of what happened, we will still try and build closer rapport with the relevant Halal authorities and we shall look forward to more interactive dialogues between the industry and

What we also need to realise is the true power of the press highlighting sensational stories without thinking about the impacted results it may cause people to blindly believe what they read. Do they offer apologies or make efforts to reassure readers when their story is proven untrue? the World Halal Forum (www. worldhalalforum.org) was created for just this purpose. With the establishment of HDC, this harmonisation process in Malaysia is set to move at a much faster rate, and in a more concerted and orderly fashion. To that effect, the new Halal body would most likely need inputs from industry players to draft its blueprint. “Proper regulation of the Halal industry will ultimately benefit the consumer,” added Nordin. “It will ensure that products that are certified and marked Halal are in fact Halal. This should be kept in mind when a “Halal Act” is created. Any regulatory framework that is established will need to also protect the Halal industry. This will be an interesting proposition as

the government,” said Jackson Tan. It is high time that a more realistic sense of proportion is adopted within the Halal industry. There is a lot of development needed in the Halal industry and responsible actions by all parties are needed. What we also need to realise is the true power of the press highlighting sensational stories without thinking about the impacted results it may cause people to blindly believe what they read. Do they offer apologies or make efforts to reassure readers when their story is proven untrue? Usually nothing is done as they are off on the next hot lead and the company in question is left to pick up the pieces and hj rebuild their reputation again. THE HALAL JOURNAL

A YEAR IN REVIEW

LOOKING with Hindsight IT WAS AN INTERESTING SCENE. The Chinese non-Muslim Mayor of cosmopolitan Melbourne addressed the international and overwhelmingly Muslim crowd. High overhead, the exhortation ʻSeize the Dayʼ was inscribed in Latin amid scenes of angels, clouds and chariots across the fresco-ed ceilings of the classically Victorian exhibition Centre. Words By HAJJ ABDALHAMID EVANS

24 THE HALAL JOURNAL

hroughout the hall, exhibitors displayed selections of Halal goods and services - salamis, pastramis, cheeses, health drinks, snack foods, books and magazines, carpets and calligraphy, scientific research and even other exhibitions. It was the opening day of the first Halal Trade Australia expo. “Halal,” announced the Mayor, “is here to stay!” This expo, in September, was the latest in a long line of ‘firsts’ for 2006, a year that has in many ways marked the coming of age for the Halal industry. There have been

significant developments from all sides, - government, industry, media, events and academia – that collectively give rise to a measured optimism that Halal may indeed live up to its potential as the opening of a new market paradigm. Several governments have started to promote Halal up the priority rankings, most notably in Malaysia, where, under Abdullah Badawi’s leadership, Halal is clearly being

FORWARD taken seriously. In the 3rd Industrial Masterplan IMP3, which outlines the course of the coming 15 years, the development of the Halal industry is given its own chapter covering a comprehensive set of inter-related plans to turn Malaysia into a Halal hub for production, trade and logistics. This determination is reflected in the recent setting up of the Halal Industry Development Corporation (HDC) to drive and coordinate Malaysia’s Halal related activities. This new corporation – government backed and private sector driven – is likely to prove a forerunner of similar moves in other countries as Halal is increasingly being recognised as an emerging market force. (see page 14 for more)

s the UK government looks at ways to codify a Halal standard to regulate its growing and somewhat chaotic Halal sector, other governments

as diverse as Turkey, Bosnia, the UAE, Australia, Kazakhstan, Brunei, Singapore, Thailand, Canada and the US are all making their own moves to take better advantage of Halal’s perceived possibilities. Malaysia’s recent budget allocation for 2007 of close to RM100 million for Halal clearly puts them at the front of the pack, at least in terms of (finally) putting their money where their ideas are, but there is every reason to believe that other countries will not be far behind in the days to come. The industry giants are also confirming their positions in the Halal market, with Nestlé, Tesco and McDonalds all playing leading roles at the World Halal Forum in May. The fact that Tesco followed up with an announcement in June that they would be sourcing RM1 billion of certified Halal products over the next five years to service selected UK stores indicated that the purchasing power of the UK’s 2 million Muslims has clearly been

Several governments have started to promote Halal up the priority rankings, most notably in Malaysia, where, under Abdullah Badawi’s leadership, Halal is clearly being taken seriously.

calculated. No doubt other retailers have taken note. And not just in the UK. As can be seen from the proliferation of Halalrelated Trade shows around the world, this is a market that is waking up to its own potential. 2006 saw Halal expos in Los Angeles, Jakarta, Kuala Lumpur, Paris, Brunei, Dubai, Melbourne and London. Malaysia’s MIHAS, with three year’s under its belt, is clearly the biggest of the bunch; with strong government support, 500 booths and over RM150 million in sales for two years running, it is almost as big as all the rest combined. The other expos produced promising results, although the Jakarta and Dubai events indicated that holding a Halal expo in a Muslim country is not a recipe for automatic success; access to the winning formula requires a bit

THE HALAL JOURNAL

This is clearly a market that will require ongoing collaboration, patience and goodwill between government, industry and the relevant Islamic bodies. Interestingly enough, the weakest component of this three-legged Halal market is the Islamic one.

2006 saw Halal expos in Los Angeles, Jakarta, Kuala Lumpur, Paris, Brunei, Dubai, Melbourne and London. Malaysia’s MIHAS, with three year’s under its belt, is clearly the biggest of the bunch.

more homework. Another notable first was the recent Halal Science Symposium in Thailand. This groundbreaking event, hosted by the Halal Science Centre at Chulalongkorn University highlighted the work being done to develop the scientific and academic aspects of the Halal industry. Not only were the latest developments for the detection of haram ingredients highlighted, but new procedures were also presented that can show whether an animal was slaughtered in a Halal manner or not, as well as ongoing research that is likely to provide scientific evidence that Halal slaughtering methods produce cleaner, safer and healthier meat and poultry.

n February, KasehDia’s Halal Journal TV gave us another first with a 13-part series looking into the business and lifestyle aspects of Halal, and it seems likely that a second series will be screened in 2007. The internet is similarly abuzz with Halal market news appearing

26 THE HALAL JOURNAL

on a daily basis. At halaljournal.com, now with a news archive of close to 1,000 online articles, visits to the site have tripled over the last 12 months. The world’s media has responded to the increased interest in Halal with a sharp upsurge in the amount of coverage given to Halal-related issues. The World Halal Forum alone generated six press conferences and 250 separate media reports in print, TV and online, with the likes of the BBC, Bloomberg, and the Asian Wall Street Journal all making their own contributions. The World Halal Forum was followed up by a series of ‘WHF Industry Dialogues’ in Bangkok, Dubai, Brunei and Melbourne. These semi-formal sessions created arenas to look more deeply into the issues and challenges facing the collective Halal industry, always with particular emphasis on the host’s domestic Halal industry. All produced interesting results, often with similar challenges emerging despite the various locations. The WHF Industry Dialogue in Melbourne produced a clear and encouraging picture of a nation that has for many year’s given the Halal market a strong priority. The current Australian initiatives to harmonise and standardise the components and procedures of their Halal industry

seems likely to produce a model that can be adapted and utilised in other parts of the world with good effect.

egardless of the location, the strongest picture that emerges from a look back over the last year is that this is clearly a market that will require ongoing collaboration, patience and goodwill between government, industry and the relevant Islamic bodies. Interestingly enough, the weakest component of this threelegged Halal market is the Islamic one. The standards, auditing process and certification issuance which collectively comprise the primary responsibility of the global Muslim community is all-too-often characterised by confusion, inefficiency and conflict. So in conclusion, amid the overall optimism, there is a caveat. If the Halal market is to fulfil its great potential, the Muslims – our leaders, businessmen, scholars, scientists and certification agencies – will have to find a way to raise their game to match the general level of expertise in the overall global markets. Otherwise, as someone in Melbourne said recently, “We do the slaughtering and the eating…and in between, hj everyone else is making money.”

rom being a backwater country in South America to a leading exporter of quality beef, Uruguay is a stellar example that may point the way for Malaysia.

BEEFING UP

Export Potential It is no secret Words By AMANDA SURIYA ARIFFIN

that Malaysia has created its own success story within the poultry market, where the country is currently a net exporter of poultry meat, a far cry from her humble beginnings. It was a stellar case study of how collective efforts by all industry players that pushed the industry to the forefront of the Malaysian meat sector. In the other potentially-lucrative area of Halal beef, however, Malaysia has far to go from her existing position as an importer of Halal beef and its related products. The level of national self-sufficiency has been stagnating at 20 per cent. The Ministry of Agriculture has made clear its objective that this level should be raised to 40 per cent by 2015. In 2005, consumption of beef per capita was calculated at a mere 4.7kg, and the total value of beef imports then was pegged at RM648 million. Despite concerns over the Halal certification of slaughter methods in certain abattoirs in Australia and New Zealand (which have since eased), consumption of imported Halal beef is expected to grow steadily and significantly. And despite generous allocations from the Ninth Malaysia Plan – RM11.4 billion - for the agricultural sector and electrical power tariffs, too, Malaysia may give a nod in the direction of Uruguay, a country roughly half the size of Malaysia. Uruguay has the highest number of South America abattoirs that are accredited by our Department of Veterinary Sciences (DVS) – the number stands at 11 currently - compared to her much larger neighbours Brazil and Argentina, numbering at two and seven respectively. And for a while, this country that houses an estimated labor force of a mere 1.52 million had to contend with a near-crippling crisis of outbreaks of foot-and-mouth disease in 1995 and in 2000. The reality is that the Uruguayan economy is agriculturedependent. Although a mere nine per cent of the gross domestic product (GDP) consists of agricultural production, more than half of Uruguay’s exports are made up of agriculture-related products. Add this to the fact that the country’s industrial sector is largely based on the transformation of agricultural products. Developments arose which were of grave concern to Uruguay’s economy. Aside from a devaluation in Brazil in 1999 which caused Uruguayan goods to become less competitive then, an outbreak of foot and mouth disease in 2001 curtailed Uruguayan beef exports to North America. Several other financial and monetary developments to add further injury to Uruguay’s economy until 2002, when the government proceeded to take steps such as allowing the Peso to float freely, amongst other measures.

THE HALAL JOURNAL

One of the central points within the government’s strategy comprised the stimulation of growth based on an increase in exports. This move targeted not just the traditional partners in the MERCOSUR (the Southern Cone Common Market, of which Uruguay is one of the founding members, and now includes Argentina, Brazil and Paraguay) but also to the EU and to America. In the context of their beef exports, Uruguay is counted as one of two of South America’s most important beef exporters, together with Argentina. Eradicating the disease was not only a logical step, but one that was needed to ensure the survival of Uruguayan beef exports, gaining access to an FMD-free market and ensuring the health of their beef export prices. An increase in Uruguay’s beef export prices could subsequently stimulate greater production and exports, which, together with increased Argentinean beef exports, would result in a reduction of prices within the FMD-free market itself. Although historically beef prices are lower in an FMD-endemic market than in an FMDfree market, figures can also be deceiving as the composition of cuts exported and the level of protection in destination markets can influence the average export price. An example can be cited in the case of the average US beef export price being considerably higher than

the average Australian beef export price, this being due mainly to US cuts being high quality cuts while Australia exported predominantly manufactured beef. On a micro-management scale, analysts noted that Uruguay’s efforts to increase efficiency were coupled with a shift from grain-fed beef to grass-fed beef. This move ensured that Uruguay was competing directly with Australia and New Zealand grass-fed beef for destination markets such as Canada and Mexico. Uruguay had begun producing grass-fed beef using traditional ranching practices. By adopting more intensive management and using grain supplements and silage, beef producers found they could raise output significantly. Exporters could more than double their output if slaughter were to increase by as little as ten percent without varying or dampening domestic consumption. Analysts had long suggested that one of the ways Uruguay could increase their beef

On a micro-

management scale, analysts noted that Uruguay’s eﬀorts to increase eﬃciency were coupled with a shift from grain-fed beef to gr-fed beef. This move ensured that Uruguay was comping direly with Australia and New Zealand. 28 THE T HE HALAL JOURNAL

export prices was to expand production in tandem with significant reduction in domestic consumption, but in Uruguay’s case this was not so. Uruguayan consumers have traditionally professed a disinterest in marbled beef, which caused a move towards grain fattening to be more gradual. When considering this point together with the fact that land use had shifted from pasture to grains, it became clear that producers needed to incorporate grain production and silage into the whole farm production system. They could not afford a decline in cattle herd population caused by a shift from land pasture use to land grain use. With the emergence of feedlot systems, and foreign markets demanding only a few specific cuts, (meaning that the rest of the live animal had to be sold at a discount in the domestic market) topped by a lack of land or crop production, Uruguay began exporting live cattle to Argentina. Much of Uruguay was well-suited for producing calves and feeder steers that could be fed more cheaply in Argentina, where cheap grain was providing a comparative advantage to the latter in grain-fed as well as grass-fed beef. Although Uruguay’s beef processors had progressed significantly in production and marketing efficiency, it is reported that she lags behind in international standards in these areas. Under-utilisation of processing plants and poor use of many cattle byproducts are cited as reasons, together with firms operating on small margins and insufficient capitalisation. Industry consolidation has begun, however, spurred by a rise in supermarkets’ share of retail beef sales. Additional consolidation was recommended as a precursor to improved efficiency and more effective international marketing efforts. In Uruguay, beef is one of the staple foods and per capita beef consumption is among the highest in the world, averaging 61kg per year. While domestic

For the ﬁrst dade in the 21st century,

Uruguay’s three-step aroach in positioning itself as a major compitor to US beef is gaining notice. consumption faces stiff competition from consumption of poultry, declining domestic consumption also frees up additional exports. Uruguay had also negotiated bilateral agreements with other FMD-free countries such as Mexico, Canada, Japan and South Korea, resulting in a considerable expansion of fresh beef exports to these countries.

Negotiating access to new

markets was said by some reports to be a slow process for Uruguay, but she was still able to increase exports to FMDfree markets and still slightly increase exports to its traditional markets. US beef producers had also faced increased competition for cheaper beef because of Uruguay’s lower production costs, and although high transportation costs normally associated with beef exports from Uruguay to markets such as Japan and South Korea were expected to make Uruguayan beef exports uncompetitive, but analysts discovered this was not the case. A growing number of MERCOSUR beef producers are also eyeing the lucrative kosher and Halal beef market in the US, and trends indicate that Argentina has led the way in fast becoming an exporter of kosher and Halal beef products. But for the first decade in the 21st century, Uruguay’s three-step approach in positioning itself as a major competitor to US beef is gaining notice. According to MLC Industries Sdn Bhd’s executive director Darhim Hashim, the South American competitor has many export weapons which can be a useful case study for Malaysia. (MLC Industries is involved in the trading of imported ready-cut beef as well as the local production of Halal beef from imported cattle.) He says, “The first thing that Uruguay did was to remove itself from the list of countries banned from beef exports due to FMD. Uruguay made major strides in ridding its borders of the disease.” He continues, “Winning concessions through the Uruguay round of GATT talks was the next step, and the country gained invaluable access to the US market with most of the beef used for manufacturing. However, bear in mind that at the same time, Uruguayan cattlemen were pushing to develop US high quality markets for Uruguayan beef products.” And improving productivity, says Darhim, is the final push. “A progressive effort by Uruguayan producers to improve their productivity will expand their beef production by as much as 50 per cent, and that the

increased production can double the export potential.” “Uruguay also has advantages in marketing its products to markets such as Mexico, where it can become the number two customer for Uruguayan beef, second to US beef. For starters, Uruguayans speak the same language, and they can market cuts that more closely fit the Mexican cultural profile. Mexico could also become a member of MERCOSUR, providing preferential trade access to its members.” This translates, logically, explains Darhim, to a boost in trade access for Uruguay. Although some industry observers claim that Uruguay will still have to play catch up in the market when placed alongside US producers for Prime of Choice beef, there is no doubt that bouncing back bullishly from a potentiallydevastating period of an FMDstricken industry has been a case study worth exploring, especially in a country that has been historically dwarfed by its neighbours in size, international recognition and reputation. Such reversal of fortunes is noteworthy as an example for other countries that have abundant natural resources and a traditionally agriculturebased economy, to perhaps, shift the focus from technologyand development-intensive industries, to a lucrative agriculture-intensive economy with great export potential. “The Uruguayan success story is a model Malaysia can hope to emulate,” concludes Darhim, “when you consider the position they started from: a net importer, to becoming a major exporter of quality products. A similar transformation is very much feasible in Malaysia if we adopt an integrated and holistic approach to overcoming our constraints and elevating the industry to global standards. hj THE HALAL JOURNAL

As Muslims abstain from food, water and other worldly pleasures during Ramadan, one might expect consumption to decrease during the holy month. But what happens, in fact, is the opposite. Demand and consumption increases significantly, providing massive boosts to businesses located in predominantly Muslim countries.

Ramadan

A Time of Bustling Trade Words By SHARIFAH SHAZANA SYED SALIM AGHA

n the weeks preceding the Eid festival, consumers tend to increase their monthly expenses on food and non-food items. A recent study by Morocco’s High Planning Commission found that the average Moroccan family spends 28 per cent more during Ramadan than any other month of the year. This study is perhaps reflective of the general trend in Muslim societies during the fasting month and supported by reports of increased sales by various companies during the month of Ramadan.

According to a report by Gulf News, a top official at Dubai-based Halal food producer AlIslami had said that the company’s sales increased 75 per cent above average rates produced during the rest of the year. Geant, a large hypermarket chain in Jeddah was reported by Arab News to produce 25 per cent more sales during Ramadan. But it is not just food or food retail companies that are cashing in on the Ramadan rush.

30 THE HALAL JOURNAL

The Saudi Telecom Company (STC) recorded a staggering 165 million SMS text messages sent during the first three days of Ramadan this year. Sharjah-based retail conglomerate Safeer Group was reported to earn 15 per cent of the company’s total sales during the month of Ramadan, with garments and foot-wear leading sales before the Eid celebrations. The hospitality industry is another recipient of the Ramadan sales boom. Although hotel

occupancy slows down during the fasting month, Ramadan buffets, available in almost all hotels in Malaysia, tend to make up for this lack. According to the General Manager of Hotel Maya in Kuala Lumpur, there is a dramatic increase in the number of customers during the iftar meal, well-known as “buka puasa” in Malaysia, particularly in the first week of Ramadan. “The increase (in sales) in our all-day dining outlet, Maya Brasserie, which serves the Ramadan buffet, goes up to 60 per cent during the fasting month” says Mr. Iskandar Zakaria Melvin. “At Maya Brasserie, the food served is also more family-friendly and localised so it’s just like having a homecooked meal,” he adds. The hotel buffets also cater for more than families, as many companies view grand “buka puasa” functions as corporate events for their staff. All these figures are clear indications that Ramadan is a month of lucrative trade and such opportunities have not gone unnoticed by businesses and advertisers alike. In Egypt, for example, with an estimated 55 million people watching television during the two hours following break fast, Ramadan is in fact the most crucial time of the year for

populace takes advantage of the dazzling array of products and sales on offer, rendering the atmosphere akin to shopping frenzies demonstrated during Christmas sales. The religious obligation of sadaqah is amplified during Ramadan, and results in a necessary increase of expenditure in food and other essential items for the poor and destitute. In Saudi Arabia, for example, the wealthy take the opportunity to provide free iftar (break fast) meals to the less fortunate. Arrangements are made with restaurants to prepare and distribute food to mosques. In some neighbourhoods, special tents are set up where the poor can gather to have free meals. Apart from affluent individuals, charitable organisations and companies actively undertake large-scale

“Working people have no time to prepare meals in time for break fast. Here they can get good food at reasonable prices,” she says. Stall operator Mohammad Fahrozi also claims to make more money during Ramadan than what he earns in other months. “Although we work for fewer hours during Ramadan, the crowd is bigger and more concentrated,” he says. “If it doesn’t rain, we are in for good business.” THE SURGE IN UMRAH TRAFFIC During Ramadan, the holy cities of Makkah and Madinah tend to experience an influx of pilgrims intending to perform the Umrah. The rush is said to increase gradually and reach its peak during the last 10 days of Ramadan where hotel room rates tend to triple. Utas Travel & Tours, a

IN EGYPT, for example, with an estimated 55 million people watching television during the two hours following break fast, Ramadan is in fact the most crucial time of the year for companies to advertise. Some companies are said to spend almost as much as half of their advertising budget in this month alone. companies to advertise. Some companies are said to spend almost as much as half of their advertising budget in this month alone. According to Business Today Egypt, Savola Sime Egypt, a market leader in edible oils, spends 40 per cent of their annual advertising budget in the month of Ramadan and 35 per cent of their yearly revenue is gained in the fasting month alone. As companies compete and struggle to capture audience attention during Ramadan, advertising rates also tend to soar. Reporting on figures by the Pan Arab Research Centre, Business Today Egypt says that rates during Ramadan may increase by as much as 150 per cent. A 10-second slot on state channels during prime time may cost as much as LE 20,000 (USD 3,486). FACTORS ENCOURAGING CONSUMPTION There are many factors at play which increase consumption during Ramadan. Attractive promotions and discounts, for one, serve to tempt consumers into purchasing more, particularly in preparation for Eid where entire households may require new items that range from personal apparel to interior decoration. These special offers during Ramadan often present good bargains and attract more than its target of Muslim consumers, as the non-Muslim

32 THE HALAL JOURNAL

projects aimed at helping the poor. The Al Ain Red Crescent Society (AARCS) in the UAE, is reported to be carrying out projects worth Dh10 million (USD 2.7 million) during Ramadan this year. The organisation, which has fixed iftar tents at 30 locations in Al Ain city, distributed 2,500 iftar meals daily as part of its Ramadan Iftar project. Small scale businesses also see the fasting month as a month of lucrative trade and play a big role in extending the sales to the streets. Thousands of makeshift stalls mushroom in clusters throughout Malaysia, at accessible outdoor locations aptly titled as “Ramadan Bazaars”, hoping to earn their share of profits. “The amount I earn in 10 months is the same as the amount I earn in 25 days of the fasting month,” says Wanjah bin Abdul who sells a variety of sweet deserts at a local Ramadan bazaar.

travel operator in Malaysia specialising in Umrah and Haj travel packages confirms that sales of Umrah packages typically increase during Ramadan. “It would not be normal if it doesn’t increase,” says its managing director, Dato’ Muhammad Din Yusuf. “I remember selling as many as 5,000 Umrah packages during Ramadan in the years before the 1997 financial crisis.” Although sales have not quite returned to pre-1997 levels, the month of Ramadan is always an opportunity of increased sales. Reasons for this include the belief that performing the Umrah during Ramadan is equal to the reward of performing the Hajj. The last ten days of Ramadan are also given much prominence due to the belief that Lailatul Qadr, one most blessed nights, occurs during hj any of the last ten nights.

PRE-REGISTER ONLINE AT www.gulfood.com

The region's most important industry event Gulfood 2007 -

The 12th Gulf Food, Hotel and Equipment Exhibition and Salon Culinaire

19 - 22 February 2007

Information correct at time of print. Details subject to change without prior notice.

Dubai International Convention and Exhibition Centre

Organised by

• • • • •

Do business with more than 2,000 exhibitors from 70 countries See exclusive product launches Visit 51 country pavilions featuring new and established exporters Attend the the second Dubai International Food Safety Conference Watch over 1,000 chefs from around the world compete in the Emirates International Salon Culinaire

For further information please refer to our website

www.gulfood.com

TRADE AND BUSINESS VISITORS ONLY strictly no children

Supporting Association

from HALAL to HARAM WHY DOES COMPLYING WITH HALAL STANDARD SOMETIMES DOES NOT NECESSARILY ENSURE THAT THE PRODUCT REMAINS HALAL? DUTCH LOGISTIC EXPERT MARCO TIEMAN EXPLAINS WHY.

ost countries have their own Halal certification and standards and for Malaysia, this is the Malaysian Standard MS1500:2004. Although these standards cover food production, preparation, handling and storage, it still does not ensure that a given product is entirely Halal when it finally reaches the end-consumers. Why? “Simply because this standard does not cover the entire supply chain, or in other words, the handling of Halal products beyond the Halal slaughtering or production,” said Marco Tieman of MDS Logistics, a Malaysian-based logistic consultants. “Even a naturally Halal product can become Haram. For example fruits, where Halal standards may only ensure Halal processes up to the post harvesting stage. Delivery and transportation of the fruits are not included,” he said. Rightly so, a product can shift from having a

Halal status to that of Haram by improper handling of the Halal products throughout the supply chain. According to Tieman, this can happen from any of the following reasons: 1. CROSS-CONTAMINATION.

Cross contamination can occur by exposure of the Halal product with a Haram material or with any other materials which may lead to impurity and filthiness. Cross contamination is a result of incorrect packaging, poor air flow management in storage or transport (e.g. in a container or warehouse), or lack of separation between the flow of goods

from one point to the other. 2. EXPOSURE TO CERTAIN ENVIRONMENTS, WHICH LEADS TO IMPURITY AND FILTHINESS.

For example, when a product is exposed to high temperatures and/or high moisture levels that may deteriorate the quality of the product. This may be in terms of taste, look, smell or feel; including microbiological or toxicological safety; as well as nutritional value. 3. LONG SUPPLY CHAIN LEAD TIMES CAN ALSO RESULT IN IMPURITY AND FILTHINESS.

A perishable product has a limited shelf life. When the

EVEN A NATURALLY HALAL PRODUCT CAN BECOME HARAM. FOR EXAMPLE FRUITS, WHERE HALAL STANDARDS MAY ONLY ENSURE HALAL PROCESSES UP TO THE POST HARVESTING STAGE. DELIVERY AND TRANSPORTATION OF THE FRUITS ARE NOT INCLUDED. 34 THE HALAL JOURNAL

KEY FIGURES (ON WHY WE SHOULD LISTEN TO THE DUTCH ON LOGISTICS) 400,000: THE NUMBER OF PEOPLE EMPLOYED IN THE NETHERLANDS’ TRANSPORT AND DISTRIBUTION SECTOR. US$ 22 BILLION: THE AMOUNT THIS SECTOR GROSSES IN ADDED VALUE ANNUALLY IN THE NETHERLANDS. 9,200: TOTAL NETHERLANDS’ COMPANIES CURRENTLY ACTIVE IN THE ROAD TRANSPORT SECTOR. 7.1 MILLION: TOTAL ANNUAL CONTAINERS HANDLED BY HOLLAND’S PORT OF ROTTERDAM, OR 590 MILLION TONS: TOTAL ANNUAL CARGO HANDLED. 40%: OF ALL SEA CARGO IN EUROPE HANDLED BY THE PORT OF ROTTERDAM. 27%: OF ALL INTERNATIONAL ROAD TRANSPORT HANDLED BY THE DUTCH, OR 50%: OF ALL INLAND SHIPPING IN EUROPE.

transportation and storage of the product is longer than the determined shelf life of the product (within a certain environment) the product quality will surely deteriorate. Again, product quality can deteriorate based on the above mentioned conditions. When addressing food, nutrition, health and medical products, product quality is directly linked to product safety for the end consumer. As proven from the above, logistics plays a key role in protecting the Halal status of any given product through proper transportation, storage and handling within the supply chain, until it reaches its final destination. Tieman pointed out that many manufacturers do not regard their logistics as a core business and outsourcing of the distribution function has

become even more common these days. However, as manufacturers outsource their distribution function to a logistics service provider, the final responsibility of the distribution function still lies with the manufacturer. So what can they do to ensure that their entire supply chain remains Halal compliant? Halal compliance within the supply chain has two components according to Tieman. First, the manufacturer should ensure that the supply chain is Halal compliant by design. Halal compliance by design looks at various aspects of the manufacturer’s logistics model. This would invariably cover the supply chain structure (design of supply chains to your customers specifications, separation of flows, design of warehouses, packaging, etc.), logistics processes (logistical activities), logistical controls (coordination of the supply chain), logistics ICT (IT system, barcoding, RFID, etc) and logistics performance indicators to orchestrate the entire Halal supply chain effectively. Tieman pointed out that this logistics performance indicators are often overlooked areas by not only local manufacturers but also multinationals. A solid set of logistics indicators should give inputs to the

logistics organisation, similar to the instrumentation panel in the aircraft cockpit for pilots, in managing and intervening effectively within the Halal supply chain. The second component is that the manufacturer should audit the supply chain from a Halal point of view. Companies usually have an annual audit for their finance by the accountants. Similarly, their Halal production should also have an annual audit for Halal compliance as well as other complementary standards. “It is therefore logical that a company audits its supply chain annually as well, as the production process cannot be seen in isolation from its supply chain process. The reason is that the supply chain has too big of an impact on the

THE SECOND COMPONENT IS THAT THE MANUFACTURER SHOULD AUDIT THE SUPPLY CHAIN FROM A HALAL POINT OF VIEW. product’s Halal status and thus should be given similar attention by the manufacturer,” Tieman added. The importance of Halal compliance would therefore explain the growing interest of local and multinational manufacturers in dedicated Halal parks currently being developed in various parts of the world, including Malaysia. These Halal parks would be able to provide advance infrastructures that could simplify the entire supply chain and logistical controls for the manufacturers. “This way, the manufacturer would be able to create a superior Halal supply chain that would then be able to contribute directly to the competitive advantage of the global Halal market,” he said. Certainly, much still needs to be done to enhance the supply chains of Halal products. “But on the other hand, it is certainly not rocket science and a manufacturer can even start as early as tomorrow by making the first steps towards a more Halal compliant supply hj chain,” capped Tieman. THE HALAL JOURNAL

AirAsia - A Shariah Compliant Airline? WHAT QUALIFIES FOR AN AIRLINE COMPANY TO BE SHARIAH COMPLIANT? HALAL FOOD, HALAL DRINKS, HALAL AIRCRAFTS? TRY ALL THREE. Words By KAMARUL AZNAM KAMARUZAMAN

hat is it about low cost carrier AirAsia that makes it so appealing? Is it their all-out drive for success, growing from just two aircrafts in 2001 to more than 45 in operation today; or is it perhaps clever branding to project an affordable and at the same time, hip and trendy airline? Whatever that X-factor may be, AirAsia has certainly matured to be one of the strongest and best-managed airlines in Asia, all within a very short period of time. Integral to this success clearly is leadership. The Halal Journal met up with the two big guns of AirAsia, chief executive officer Dato’ Tony Fernandes and his deputy, Datuk Kamarudin Meranun at their brand new office in LCC Terminal in Kuala Lumpur International Airport, and this is what they have to say.

‘‘

YOUR AIRLINE IS ONE OF THE FEW IN THE WORLD (IF NOT THE ONLY) THAT DO NOT SERVE OR SELL ALCOHOL ON BOARD YOUR FLIGHTS. WHAT WAS THE RATIONALE IF YOU CAN SHARE BEHIND THIS DECISION? TF: “The thought of not having alcohol was twofold. First, the majority of my partners are Muslims, including the foreign ones. There was a conscious desire not to have any alcohol right from the beginning despite even the Arabian Airlines had alcohol. For me personally, it was on top of the religious reasons. I

feel that it is a hazard to my staff, because people can drink a lot on a plane in a very short time. They come (on board) with holiday in their minds; and they can also drink a lot in two, three hours. And most of our flight crew are predominantly female, so we felt the need to protect our staff.” WHAT ABOUT HALAL FOODS? IS THAT PART OF THE CORPORATE PHILOSOPHY TOO? TF: “Actually, we live in a global community, so for us, there is no harm for non Muslims to have Halal foods. That was

’’

So if any of your readers have any ideas for food, email me directly. We believe in supporting local industry. Its not talk, we’ve actually done it.

36 THE HALAL JOURNAL

‘‘

There’s a lot of capital in the Islamic finance industry, but the problem is that it’s not traditional, so people don’t look for it. But now, people should look at this in another way - if AirAsia is doing it, something has got to be right with Islamic finance. the one thing that drove us (to offer full Halal meals). We have a lot of Aussies living in Indonesia and Malaysia, and at the same time, we also have a lot of Middle Eastern guests coming in. So that was the thought behind the Halal food. And you might as well try to help as many Muslim suppliers to come forward with their Halal products.” NOT LIMITING TO JUST FOOD AND DRINKS IT SEEMS, AIRASIA RECENTLY FUNDED ITS FLEET EXPANSION PROGRAMME USING ISLAMIC FINANCE. CAN YOU ELABORATE MORE ON THIS? TF: “Yes, KFH (Kuwait Finance House) gave us a good deal. We liked the style of Islamic finance as well, but I don’t think religion drove us into making that deal. There’s a lot of capital in the Islamic finance industry, but the problem is that it’s not traditional, so people don’t look for it. But now, people should look at this in another way - if AirAsia is doing it, and we are very, very competitive, something has got to be right with Islamic finance. I think my deputy here can explain the financing better.”

Dato’ Tony Fernandes and his deputy, Datuk Kamarudin Meranun.

DK: “Thanks Tony. Actually, when Malaysia was championing the cause to be the regional Islamic finance hub, we thought about how we could help to promote this. We wanted diversification to the current list of financiers we already had. With Islamic financing, we saw the potential to tap a much larger pool of financiers, rather than be stuck with the same old conventional banks. So bigger selection of financing alternatives, and assisted by the flush liquidity within the global Islamic financial industry.” SOME SAY ISLAMIC FINANCING RATES ARE ACTUALLY SIMILAR, IF NOT HIGHER THAN THE CONVENTIONAL. SO WHY ISLAMIC FINANCE, AND WHY KUWAIT FINANCE HOUSE? DK: “I would say that the financing cost is ‘about there’ or even slightly higher, but definitely more complicated especially with the documentation. But our main objective is to gear up the Islamic finance industry in developing their products

’’

to be friendlier and adaptive for aircraft operators, which I believe is a new industry for them to be involved in. So essentially, AirAsia would be pioneers with KFH as proponents for a new development in the industry.” “Why KFH? Well, once we had decided on using Islamic finance for our aircrafts, we asked two institutions for proposals and KFH gave us a lot more than just good rates. They were very effective, came with vast experience and have excellent networking in the Middle East, which is a big plus point. In essence, KFH provided us with a much wider financing option and we are very pleased to be in partnership with them.” WITH ALL THESE DEVELOPMENTS, ONE MIGHT JUST BE TEMPTED TO CATEGORISE AIRASIA AS A HALAL, OR AT LEAST A SHARIAHCOMPLIANT AIRLINE COMPANY. WHAT DO YOU THINK? TF: “I think we are a unique company, definitely one of a kind. We have managed to blend a lot of different things into one, like no alcohol but on the other side; we have a trendy kind of deal going on. So yes, I think you can merge it together - this is us. We are not making something up, it is our personality. You can be religious, but you can still have fun and be hip at the same time, and I think in many ways, the West have projected Islam in a certain way. We are very good religious company, but we are also multi faith. But that doesn’t mean we can’t have fun and project a more liberal thought on many global issues.” AFTER HALAL FOOD, DRINKS AND NOW AIRCRAFTS, WHAT’S NEXT FOR AIRASIA? TF: “Two developments we are currently working on actually - we are revamping the whole food area, to put more emphasis onto it. We are looking to build our own kitchen so we can control more ourselves and experiment with many different things. Sometimes when you’re in your own control, you can play around a little bit more. You’ve got to think out of the box. How’s that progressing? Well, we’re supposed to change our menu next month, but we are still looking into things, so

it is still very embryonic. The other area we are looking into is in-flight merchandising.” WHAT IS THE ULTIMATE AIM OF HAVING TOTAL CONTROL OF YOUR FOODS? TF: “The airline has taken on many evolutionary things, and in flight food wasn’t on top of my list at that time. But now we’re flying 17 million people and so we can influence food preference quite a bit. All of our food is based out of KL, Bangkok or Jakarta but what I’m trying to do is be a little bit more adventurous, and its not easy by the way, and to go out and find a local Vietnamese or Thai delicacy. My whole aim in life is to bring ASEAN together. Connect them through flights; connect them through food, and through sports, which is what we’re trying to do.” FOOD AND SPORTS AS REGIONAL UNIFIERS? THAT SOUNDS INTERESTING. TF: “Yes, like for instance, Manchester United are coming in next year to play Malaysia. AirAsia could provide very cheap fares, so that people in Vietnam, Thailand, Laos, and Indonesia can come here and watch, when it wouldn’t have happened five years ago. Food, sport and music are great way to unify an area and AirAsia can play a small part by having a Vietnamese delicacy or a Thai type of food. I’m frustrated when all I ever see is snickers bar or tuna sandwiches and stuff. I mean, it also needs a bit of reality but we don’t have to carry everything Asian but a bit of the west too. Actually, I find the people from the West more adventurous anyway. I mean, they come all the way over here to sample the food! So let’s give them that!” WHAT CAN WE EXPECT IN THE COMING YEARS FOR AIRASIA? TF: “My aim is to have Halal food in the departure lounge, so that people can buy hot food and take it to the plane and eat. I would like to have food stalls in the departure terminal that is not dissimilar to a hawker stall. That’s another way we can promote Malaysia as well. But then, I’ve got little choice, because dealing with Malaysia Airports is tough, but we’re getting there…one day. So if any of your readers have any ideas for food, email me directly. We believe in supporting local industry. Its not talk, we’ve hj actually done it.” THE HALAL JOURNAL

fast track | ASIA

Colgate Reassures Public on Halal Status

Colgate’s Bright Smiles, Bright Future community support program. BY KAMARUL AZNAM KAMARUZAMAN

CLAIMS OF YET another popular consumer brand containing non Halal ingredients began circulating in Malaysia as early as late last year. Leaflets, SMS’s and emails were distributed freely urging Muslims to boycott the product in question. The popular consumer brand is none other than Colgate toothpaste, where certain groups are claiming that they are using swinerelated ingredients. The fact that none of their packaging carried any JAKIM’s Halal logo further lent credence to this claim. The Halal Journal had to check its validity, since the allegation indirectly undermines the effectiveness of the many government bodies entrusted to care for Halal in Malaysia, not to mention challenging the trust of generations of Muslim consumers. A quick check with JAKIM’s website at www.halaljakim. gov.my gave us the answer we were looking for. Replying to a question posed by readers on December 26, 2005, the department’s relevant officers wrote: “JAKIM have conducted several laboratories testing on Colgate’s toothpaste and

results from our lab analysis showed that the toothpaste does not contain any traces of any animal DNA.” They went on, “The manufacturers have also clarified that they never used any ingredients derived from any part of animal like fats, bones, teeth or hoofs. Their factories in Thailand, Vietnam and China have all obtained Halal certifications from local Halal certifiers which are all endorsed by JAKIM. Based on this, we have concluded that there are no doubtful or Haram ingredients in any of Colgate’s toothpaste and that news saying otherwise are indeed false.” Another check, this time with Colgate-Palmolive Malaysia, also revealed some very interesting facts, especially as to why the packaging never carried JAKIM’s Halal seal. The simplest and most obvious reason, according to Hamidah Minhaj, head of technical and regulatory affairs, is that the toothpaste had been sold in Malaysia for 50 years and it has always been accepted as Halal. “In the past, the company felt that there was no need to affix a Halal logo to our packs,” she added. “Furthermore, Colgate

toothpaste being classified as a pharmaceutical by the Ministry of Health had to comply with government regulations that restricted the affixation of a Halal logo. Recognising that this was causing consumer confusion and doubt and to re-assure our loyal consumers that Colgate toothpaste is and has always been Halal, Colgate applied for, and was granted by the Ministry of Health, the right to affix a Halal logo on our packs,” she said. Their first step following this approval was to work closely with JAKIM, to ensure that they are satisfied that Colgate toothpaste fully complies with Halal standards. She reiterates that all of their products are manufactured to the highest quality and standards. They do not contain any ingredient of animal origin, and are certified in their countries of manufacture by relevant Islamic bodies that have been recommended, approved and endorsed by JAKIM. Hamidah pointed out that most Colgate toothpaste sold in Malaysia is manufactured in Thailand, while some of their toothpaste varieties are made in Vietnam, China and Brazil. Specifically, their toothpaste

has received Halal certification from the Central Islamic Committee of Thailand, the Islamic Community of Ho Chi Minh City, the China Islamic Association and the Federation of Muslims Association in Brazil. In addition to the generic Halal seal, each pack will also be accompanied by a statement which reads: “Colgate toothpaste fully complies with Halal standards and is certified by a body recognised by JAKIM,” which they hope will bolster consumer’s confidence when making purchases. “Again, we wish to reassure all of our consumers that all Colgate toothpaste sold in Malaysia is, and has always been, Halal. We will continue to work closely with both JAKIM and Ministry of Domestic Trade and Consumer Affairs to ensure that our toothpaste continues to adhere to established Halal standards,” she added. The chief executive of Colgate-Palmolive Malaysia added that having been operating in Malaysia for 50 years employing more than 750 people, Colgate-Palmolive has always respected the religious beliefs and practices of all consumers across the world. Despite these challenges, he assures that the company will still continue to support the local community in Malaysia through various community building initiatives. “We’re committed to supporting the communities where we have businesses around the world, and in Malaysia that commitment includes our Bright Smiles, Bright Futures dental health program and Oral Health Month activities, which improve the oral health of Malaysians. Consumers can learn more about the programs and the company at our website, www.colgate.com.my, where they can also write in to our consumer affairs division for further enquiries,” he said. THE HALAL JOURNAL

fast track | ASIA

MISC Commences First Halal Express Service BY KAMARUL AZNAM KAMARUZAMAN

General manager of MISC’s liner business, Abdul Hamid Nizardin officiating the Halal service by Bunga Delima at Northport.

MALAYSIAN INTERNATIONAL SHIPPING CORPORATION BERHAD, or MISC, recently launched the first ever Halal Express Service, a dedicated weekly direct liner service that connects Halal cargoes from ASEAN, the Far East and Australasia regions to the Middle East markets via Jebel Ali and Dammam in Saudi Arabia. The call to Northport by MISC’s Bunga Delima, a 1,200 TEUs containership on September 20th, 2006 marks the commencement of this service, setting the stage for Malaysia to take the lead and play a more prominent role in its effort to become a global Halal hub. Abdul Hamid Nazardin, general manager of MISC’s liner business unit said the new Halal Express Service will have a direct call at Port Klang and Jebel Ali and will provide a fast transit time for sensitive refrigerated cargoes in Port Klang to their distribution facilities in Jebel Ali for the Middle East market. 40 THE HALAL JOURNAL

“The focus of the Halal Express Service will be on providing the first end-to-end Halal supply chain solution. With only nine days transit time from Port Klang to Jebel Ali, Malaysian shippers will benefit from the fast and safe delivery of their cargoes to the buyers,” said Abdul Hamid. “This service will utilise the entire Halal supply chain – from the original point of the Halal goods to the Halal containerisation, to the point of Halal transportation and port movement, cargo lifting and all that, right up to this particular ship, its all going to be Halal designated express service. But that does not necessarily mean that we will take only Halal products, because it’s not going to be economically viable if we just take Halal,” he added. He also pointed that this new service has been made possible since MISC is in greater control of the supply chain with three out of four vessels plying the said trade routes are MISC owned while the fourth is owned by Simatec, a partner of MISC with similar trade routes.

The new service will also leverage on their subsidiary’s expertise in Halal supply chain by utilising MISC Integrated Logistics’ (MILS) multi million Ringgit Halal hub facility. If any goods needed quicker turn around time, Simatec can be used to cut short the route, from 28 days to maybe just 16 days. Abdul Hamid also highlighted that the new service will also leverage on their subsidiary’s expertise in Halal supply chain by utilising MISC Integrated Logistics’ (MILS) multi million Ringgit Halal hub facility currently under construction in Pulau Indah. Divided into three phases, the first phase of MILS’ regional logistics hub (RLH) in Pulau Indah is expected to be ready by December this year. Once completed, the centre will have a total of 90,000 square metres of multi modular storage and processing facility that would enable manufacturers, importers and exporters to consolidate multi-country warehouses in a single duty free location.

With this facility, MISC will be able to provide Halal warehousing and cold storage facilities in Port Klang while the distribution centre in Jebel Ali will be their main sourcing point for reefer cargoes. This greater control of the supply chain would be able to ensure full compliance of recognised Halal logistics standards throughout the entire process. “Our commitment is to continuously improve our products and ensure a highly reliable service. We expect that the combination of Halal Express and Halal hub by MILS will be able to serve the demands for fully-compliant Halal products by the world’s Muslim population,” added Abdul Hamid. He also added that bookings for their very first sailing have been very encouraging particularly with such a strong support from Malaysian shippers.

fast track | ASIA

Local Dutch Agriculture Office Established BY KAMARUL AZNAM KAMARUZAMAN

THE DUTCH are keen to be identified within Malaysia’s current drive to make agriculture its third engine of growth, and one of its first moves towards this direction is to open their local agriculture office here in Kuala Lumpur. Said to be a reciprocal move of its Malaysian counterpart’s launch of their own office in The Hague / Rotterdam earlier this year, the Dutch Ministry of Agriculture, Nature and Food Quality’s new regional office in Kuala Lumpur will have the unequivocal objective of strengthening the existing two-way trade in agricultural and primal commodities between the two countries. Launched last September 13, the new regional office would also provide coverage for the Philippines and Singapore in addition to Malaysia. Speaking during the launch at his residence, Dutch ambassador to Malaysia, His Excellency Lody Embrechts said that it is the aspiration and plan of his government to see the Netherlands play a bigger role in the accelerated

development of the agriculture sector in Malaysia, especially now since the government have earmarked the sector as the nation’s third engine of growth. “I sincerely hope that this new office will be able to increase trade and investment between our two countries, especially between government to government, government to private and private to private. In addition, we have also identified the Halal sector to be one of the fastest moving industries in Europe and we would like to offer our expertise in agro-logistics to complement the delivery of Halal foods to the European region,” he said. Embrechts pointed out that recent announcements and advance meetings between ports authorities in both countries are proof that his government is fully aware of Malaysia’s intentions to become a global Halal hub. He reiterated that The Netherlands is ever willing to offer its expertise for Malaysia to achieve its ambitions.

Embrechts mentioned that Dutch agriculture owns much of its strength to good management, modern production methods as well as an agricultural model based on a tripartite relationship between education, research and extension. Together, these factors make for an environment that allows for it to stay ahead of the competition and for it not only to produce in quantity but also in quality, he said. “The years ahead for Malaysian agriculture and Dutch input and contribution will promise to be challenging. In arable farming and plantation crops, the world expects not only food safety issues to be taken into account but also sustainability matters to be sufficiently addressed. In this, Malaysia will find a willing partner in the Dutch who are more than keen to be involved in the process and trade,” said Embrechts.

TABLE 1: MALAYSIAN TRADE WITH THE NETHERLANDS Year Total Exports Total Imports to The Netherlands to The Netherlands (RM Billion) (RM Billion) 2005 2004 2003 2002 2001

17.45 * 15.75 13.04 13.14 15.44

3.35 ** 3.43 2.15 2.45 2.47

* Machinery and fabricated goods; electrical & electronic; palm oil; chemicals. ** Machinery and fabricated goods; chemicals; foodstuff.

TABLE 2: APPROVED FOREIGN INVESTMENTS IN MALAYSIA Year Country of Origin Amount (RM Billion) 2005

USA Japan Singapore The Netherlands (4th) Republic of Korea

5.15 3.67 2.92 1.67 0.67

2004

Germany Singapore USA Japan The Netherlands (17th)

4.72 1.52 1.06 1.01 0.99

2003

UAE UK USA Japan Singapore The Netherlands (8th)

3.95 3.87 2.18 1.29 1.22 0.32

Source: MIDA, Statistics Department

42 THE HALAL JOURNAL

From left, Malaysian Minister of Agriculture Tan Sri Muhyiddin Yassin with the Dutch Agricultural Counsellor, Mr. Adrie de Roo; the Secretary General of the Netherlands’ Ministry of Agriculture, Nature and Food Quality, Mr. Chris Kalden; along with the Ambassador of the Kingdom of the Netherlands, Mr. Lody Embrechts.

Lody Embrechts.

Chris Kalden.

“Islam today is the fastest growing religion in Europe and we recognise that the foods Muslims eat must adhere strictly to the Islamic principles, including its entire supply chain, which also includes transhipments and storage. We hope to be able to play an integral role in this regard to ensure that all Halal food supplied to the region is 100 per cent Halal,” he said. Aside from agriculture he added, The Netherlands also have a strong focus in knowledge, identified as the means to encourage the necessary innovation in the sector. Their Wageningen University & Research Centre for instance - a joint initiative between the government, industry and research institute - have spearheaded extensive research in food and consumer sciences, as well as being one of the main driving forces behind the formulation of a European food safety policy.

The Netherlands is Malaysia’s 12th largest trading partner globally, or the second largest trading partner within the EU. Malaysia’s total trade with The Netherlands was valued at RM20.8 billion in 2005 comprising mainly of machineries and fabricated goods, electrical and electronics, palm oil and palm oil based products, timber / wood furniture as well as chemicals. The small country the size of Pahang and Negeri Sembilan combined also contributed a total of RM1.6 billion worth of approved foreign investments to Malaysia in 2005, the fourth biggest after the US, Japan and Singapore.

fast track | AUSTRALASIA

Australia is a prime example of a non Muslim country that have realised the immense potential of supplying Halal food for the Muslims. And they have been perfecting on just that, for the past 35 years.

Halal on the move in Australia

Colourful Melbourne at night BY KAMARUL AZNAM KAMARUZAMAN

AUSTRALIA IS THE WORLD’S SECOND LARGEST EXPORTER OF BEEF after the U.S and is one of the world’s most efficient producers of cattle. Each year, Australia produces just over two million tonnes of beef and veal a year. The gross value of Australian cattle and calf production, including live exports, is approximately AUS$ 7.4 billion. Of this, they export 65 per cent of its total beef production, or 892,000 tonnes last year valuing approximately AUS$4.5 billion, to more than 120 countries around the world. 33.2 per cent of that goes to the United States while a staggering 43.5 per cent, or 450,000 tonnes

of it goes to Japan while Korea is Australia’s third biggest market representing some 13.6 per cent of the market share. Australia is also one of the world’s leading producers of lamb and sheepmeat, as well as the world’s largest exporter of mutton and the second largest exporter of lamb. The country produces around 382,000 tonnes of lamb and 244,000 tonnes of mutton per year, grossing an estimated value of AUS$2.1 billion. 75 per cent of Australian sheep are Merinos, bred for their fine wool and slaughtered for its meat. As a matter of fact, all sheep in Australia are Halal slaughtered and 28 per cent are exported to the Middle East and

With the growing Muslim population in Australia itself, that realisation will come sooner than expected. As it is, an estimated 450,000 Muslims are currently living in Australia with 30,000 more making their way each year as tourists and students. Africa while 6 per cent of it finds their way to South East Asia. As Muslims already making up one fourth of the world population, the Australian’s strict adherence to quality and delivery ultimately handed them that massive Muslim market, pushing it as the undisputed leader of global

Halal food supplier. Locally however, the importance of the Halal industry is perhaps understated at best; as it continues to provide thousands of jobs, without most Australians even aware of the true meaning of Halal, let alone it’s potential. But with millions of dollars coming in

THE HALAL JOURNAL

fast track | AUSTRALASIA

VICTORIA STATE GOVERNMENT’S INCENTIVES FOR HALAL Committed to doubling of funding to AUS $8 million for “opening doors to export” (ODE) programmes over four years for export related activities. Committed AUS $500,000 in the first year to maximise opportunities in promoting Victorian industries internationally at the Australian-held APEC Forum in 2007. Committed AUS $1 million to participate in promoting Victorian industry internationally at the 2010 Shanghai World Expo. Committed AUS $500,000 over the first two years to develop comprehensive briefing packages for exporters on opportunities arising from the new free trade agreements between Australia and Singapore, Thailand and the United States. Supported the federal government in pursuing free trade agreements with China, India, Malaysia, the UAE and Asean nations, and committing to continuing AUS $25 million on base level funding for “Agenda for New Manufacturing” (ANM) programmes over four years.

Riva also foresees dwindling advantages within the service sector as schools and universities in South-East Asia are able to produce more graduates of increasing quality and quantity to service their booming economies. Halal, he thinks, is the answer. as export earning, Australia is nevertheless beginning to recognise that the global Halal market is really an important subset of its economy. Understanding of this market is therefore imperative. And with the growing Muslim population in Australia itself, that realisation will come sooner than expected. As it is, an estimated 450,000 Muslims are currently living in Australia with 30,000 more making their way each year as tourists and students. “It is crucial for Australia in the delivery and understanding of the importance of Halal,” said Richard Dilla Riva, shadow minister for trade and export as he officiated the World Halal Forum Industry Dialogue: Australia, in Melbourne recently. Riva pointed out that Australia has tremendous strengths in manufacturing, agriculture and services. These, 44 THE HALAL JOURNAL

according to him, are built on solid foundations, a mix of efficient local infrastructure, good training and society tolerance. “Australia has an excellent transport system, high quality education sector and skills base, cheap power supply and a strong multicultural community. These advantages are not without some level of current pressure however. The strong Australian dollar and the increased flood of low price products from Asia and other competitors are pushing our economic drivers in manufacturing and agricultural industries,” he said. Riva also foresees dwindling advantages within the service sector as schools and universities in South-East Asia are able to produce more graduates of increasing quality and quantity to service their booming economies. Halal, he

Richard Dilla Riva, shadow minister for Australia’s trade and export addressing the delegates at the recent World Halal Forum Industry Dialogue in Melbourne.

thinks, is the answer. Urging for a stronger trade relationship with Muslim countries, Riva commended AusTrade, a trade arm of the Federal Government that has been providing much of the connections between overseas trade and Australian businesses. “I also think it is also important to acknowledge the work of our Deputy Prime Minister of Australia and Federal Minister for Trade, The Hon. MP Mark Vaile, who has asked that I pass on his best wishes for this Industry Dialogue,” he added. Mr. Vaile, according to Riva, was very happy with the extensive co-operation between the Australian Quarantine and Inspection Service (AQIS) and the Malaysian Ministry of Agriculture and the Department of Veterinary Services. The Australian minister for agriculture, fisheries and forestry, Mr. McGauran had visited his Malaysian counterpart, Tan Sri Muhyiddin Yassin on August 19 in Kuala Lumpur. “We know the work the Federal Government undertakes to ensure the acceptance of the Halal protocol with Malaysia which was established in May 2006, this protocol outlined Malaysia’s requirements for meat exports in accordance with Halal guidelines. It is anticipated that, in the future, AQIS is expected to provide to Australia a list of additional Australian abattoirs for their consideration,” he said. So far, Malaysia has accredited three Australian beef slaughter establishments

to resume meat export to Australia. “Mr. Vaile would like to see Malaysia being encouraged to accredit more Australian establishments that apply for Halal,” added Riva. While he acknowledges that there are great opportunities for Australian beef exports into the Malaysian market, in particular, there is still much work to be done in this area if progress in Halal trade is ever to be made. “What I think as the immediate challenge facing the Halal business community is to establish some level of certification benchmarking which provides consistency, uniformity and certainty for all involved,” said Riva. For the organisers, the development of the local Halal industry can also be used as a catalyst for the development of the Muslim minorities in Australia and to further the government’s efforts to integrate its people, both economically and socially. Nordin Abdullah, director of The World Halal Forum added, “Likewise, it also important that Muslims take their place in the Halal industry. Muslims in Australia need to equip themselves with the skills and education that will be beneficial to the Halal industry, the community and ultimately themselves.” “As a country, Australia needs to continue to leverage off these groups to gain market share in an ever competitive business environment and to bring further credibility internationally, to Australia’s commitment to Halal,” he said.

fast track | AFRICA

Promoting Investment in Agriculture

October 16 is the annual World Food Day that intends to bring attention to global hunger and this year’s focus is on investment in agriculture for developing countries, especially for small-scale farmers. MORE THAN 800 million people worldwide live in constant hunger with 25,000 dying each day, mostly from severe malnutrition. Twenty years ago, heads of state at the World Food Summit challenged countries to cut global hunger in half by 2015. Joachim von Braun, director of the private International Food Policy Research Institute in Washington, thinks it is still possible. “China, India and Brazil have taken major new steps to reduce hunger and malnutrition. The problem is in the smaller countries, and in much of Sub-Saharan Africa. But cutting hunger in half by the year 2015 is an achievable goal,” he said. Women and children are often the hardest hit. In Africa, a severe food crisis in 2005 and earlier this year appears to be lessening in many parts of the continent. But it is estimated that 200 million people remain malnourished as severe drought has caused crop failure in

Southern Africa. In parts of East Africa, livestock have died due to the lack of rain and in West Africa; poor rains have dried up green pastureland. In the West African country of Niger, Aboudou Karimou Adjibade who works for UNICEF or the United Nation’s Children’s Fund, says aid to help the malnourished often comes too late. “Each time we wait, a lot of people are moving to severe malnutrition status. Each time we can prevent, invest at the early stage, we are sure we are saving the lives of thousands and thousands of children.” Small-scale farmers do more than three-quarter of the farming in the developing world. In Africa, most of them are women who cultivate small plots of land. Von Braun says these women could be helped with small loans, and organised cooperatives to help them market their crops. He also says if poor farmers are able to make a profit, they can improve their crop yields by purchasing

equipment, fertiliser, and higher quality seed. They can also adequately feed their families. “Many of these farm families in developing countries are among the undernourished, the food insecure, the hungry,” he said. “It’s a paradox. The people who grow the crops are suffering from poverty to such an extent that many of them and their children are hungry.” Farmers in some parts of the southern African nation of Malawi are facing food shortages. UNICEF’s Aida Germa says half a million children in Malawi have lost their parents because of AIDS, leaving many of them orphans and undernourished. “We have HIV/AIDS which has already devastated a number of the families. You have a situation where the malnutrition rate has not improved at all since 1992,” Germa said. Joachim Von Braun says because of a larger population, there are twice as many

malnourished children in South Asia than in Sub-Saharan Africa. But the reasons are different, since famine does not often occur in South Asia as agriculture has improved tremendously there. Von Braun says investing in education and health care for women can reduce malnutrition in both women and children. “It relates to health, mother’s education, and women’s discrimination, much more in Asia, than Sub-Saharan Africa where the issues are lack of food, lack of access to food, and poor ecologies, bad soils. So we need to have very different approaches to address the under-nutrition and hunger problem in South Asia versus Sub-Saharan Africa,” he added. He believes by investing in agriculture, along with better education, health, and infrastructure, malnourishment can be turned around, enabling poor countries to feed themselves. SOURCE: VOANEWS.COM

THE HALAL JOURNAL

fast track | EUROPE

A new style of business is emerging, and the all encompassing concept of Halal simply completes the picture.

Changing with Chocolates

Ummah Foods founder Khalid Sharif and his father, Mohammed Sharif.

Their print ad.

BY KAMARUL AZNAM KAMARUZAMAN

AFTER MECCA COLA, there is now Ummah Foods. Proudly emblazoned across its website is its tagline “The ummah is changing” and borrowing Mecca Cola’s charity-business model, the company vows to give 10 per cent of its profits to charity. This emerging trend in business is finding a powerful ally in Halal and Ummah Foods is proud to say that they are merely a representation of the fast evolving British Muslim community, one that endeavours to fuse both its Western and Islamic lifestyles and help contribute to a more peaceful and harmonious world for all to live in. “We would like to be a community-based business where at every stage of our work we can take actions that will please Allah (swt), and at the same time, help our community,” said Khalid Sharif, managing director of this East London company that manufactures food compatible with the tenets of Islam. Although he realises that this will take time, significant shifts within the community are already pointing towards this direction. “Muslim consumers are looking for specific products tailored to meet their religious and community needs. Mainstream supermarkets must embrace and reach out to this growing community which unequivocally defines itself by faith,” he added. Fresh from their successful launch of Halal chocolates onto selected UK’s Tesco stores last September, their all-new Ummah Orange and Ummah Caramel Chocolate bars have made their way onto the shelves in Tesco’s Bradford, Batley, Slough, Watford and Brent Park stores since early September, in time for Ramadan. A Halal 46 THE HALAL JOURNAL

mint chocolate bar is said to be waiting in the wings and will hit the supermarket shelves next year. Made under strict Halal supervision, the Ummah Foods ensures that the bars do not contain any animal fats, and that no alcohol was used to clean machinery in the production plant. Even the glue used in the bars’ wrappers is free of animal fats according to Khalid. More importantly, “it will taste as good as the existing brands of chocolate out there,” he added. On a local level, Ummah Foods is fighting to encourage greater achievement in schools, and to assist young Muslim artists and journalists to boost the current revival of the Islamic art scene. This conscientious effort is boldly displayed in their chocolate wrappings where they have commissioned up-andcoming British Muslim artists to fuse graffiti and Arabic, giving a funkier image for all of its packaging designs. “We have had lots of feedback on our packaging designs - some say they love it and some are not quite sure about it. The swirls are a story

on their own. Very few products can cater to Muslim consumers at product level through ingredients, wrapper, charity partnership and corporate philosophy; but we can, and retailers like this a lot,” Khalid added. Doing its bid for charity, Ummah Foods is using marketing materials from the Tesco’s launch to help support the Muslim Youth Helpline Ramadan Prison Campaign. The unique charity campaign calls on Muslim buyers to sponsor a gift for the prisoners and asks them to write personal messages of hope. “It is a great charity with an admirable purpose. I hope we can make a significant difference to such a good cause to dovetail with the growth of the Ummah Foods brand and the company. We also need your support and doas so we can partner and support more education projects, homeless charities, humanitarian and community projects,” he added. for more info on Ummah Food’s chocolate bars please log on to www.ummahfoods.com

fast track | AMERICAS

FINDING ISLAMIC FUNDING

in America

A young Muslim entrepreneur in America discovered first hand that it is not easy to find Halal funding in a land “of the brave and the free”. BY SAKEENA ABDUL RASHID

SOME TIME AGO I began researching a new venture. As a young female entrepreneur I was ecstatic at the idea of owning my own business. I would bring new products to the masses that would enrich their lives and I would have started something new and grand. Best of all it would be mine from inception through fruition, with my name gleaming on a gold plate on the office door. After my research was finished and a few business consultants had reviewed and applauded my ideas, I was well on my way to becoming a business owner. But before I could pat myself on the back and open for my first day of business I received an unpleasant visit from an old friend. Reality came knocking hard at my door and although I refused to let it in, he had a key. It seems with all the excitement of starting my new business; I had forgotten to focus on one very crucial issue, where would I get the funding? This is an essential step every entrepreneur and established business must face head on. Add ethics and being a Muslim in America to the mix and you have a recipe for frustration! Oh well, I’ll just contact some of the Islamic banks I’ve heard about. Or so I thought. There are a very small number of Islamic banking institutions in America. This is sometimes concealed by the larger number of Arab banks in New York and other parts of the country. These Arab banks are for the most part not Islamic in nature. There are a number of non-Muslim Arabs in the banking business, and you must do your research to find true Shariah compliant banks. I soon found a listing of several Islamic financing institutions and began weeding through them. I sorted them out into two separate categories, “home financing” and “business financing”. Disappointment started to set in. There was a myriad of home financing contacts; banks, non-profits, or community projects set up to help local Muslims achieve homeownership. That’s so great! I said. The brotherhood and sisterhood of our community was thriving. But I didn’t want to buy a house. I wanted to start a thriving business. Then I turned to my inferior “business

48 THE HALAL JOURNAL

Finding needle in a haystack. Despite being a finance capital, looking for Halal funding in US can be very frustrating.

Even though some of these banks’ services are plentiful, they do not meet the needs of every business. If you are an entrepreneur looking for start-up funding or working capital, you won’t find any here in America.

fast track | AMERICAS

financing” pile, in which there were two, maybe three contacts. One of them was Lariba, or Los Angeles Reliable Investment Bankers Associates, located in Pasadena, California. It was founded 19 years ago by Dr. Yahia Abdul-Rahman to serve the needs of consumers seeking interest free financing. Lariba is by far the most full-service Islamic financial institution in the United States. Their products and services include home, business, auto, trade and equipment financing. They fund small and medium businesses using either a leasing (Ijarah) or joint venture (Musharakah) financing model. Lariba’s services are available in most states, and online applications also make it easy for customers to apply for funding. They also finance healthcare instruments and equipments for medical professionals to start their own practice. They work with entrepreneurs interested in buying franchises and recommend nationally recognised brands like Kentucky Fried Chicken and Exxon Mobile gas stations. Furthermore, applicants must meet certain criteria defined by the bank, which includes three or more years of experience in the industry. So what do the other Muslim entrepreneurs do when they cannot satisfy any of the criterias? “How are other Muslims financing their businesses?” Tahirah Rashid, a Muslim business owner in central Michigan has a small but growing jewellery and accessories shop. She has two kiosks in different local malls serving the general public. Tahirah started her business by borrowing US$5,000 from friends and family that she paid back a month later. This allowed her to purchase her first inventory and lease a space.

Mrs. Rashid would like to expand the business but won’t go through Islamic Banks. “I find them suspicious, she says. “Islamic banks don’t charge late fees but they’ll charge an “administrative fee” for processing a late payment. For now she continues to pull money from her savings to slowly grow her business. She says she would never get a traditional interest-bearing loan. “If I couldn’t have started my business in a Halal way then I know it wasn’t meant to be,” Mrs. Rashid says. There are a few other U.S. banks offering Islamic related services for businesses. Devon Bank in Chicago, Illinois offers Murabahah and Ijara business transactions for real estate acquisition. Stand-by and documentary letters of credit are also available. University Islamic Financial Corporation is working on rolling out an Ijarah model (financing secured by real estate) within the next six months. The Ann Arbor, Michigan bank also plans to add other Islamic business financing options in the future. “It is always a goal of ours to assist entrepreneurs and small businesses with funding,” says John Sickler, Chief Residential Officer of UIFC. Even though some of these banks’ services are plentiful, they do not meet the needs of every business. If you are an entrepreneur looking for start-up funding or working capital, you won’t find any here in America. I was baffled trying to figure out why not one Islamic bank offered something more tangible. To my surprise the Islamic banks weren’t out of touch with small business needs. They are working tediously behind the scenes with the different governmental bodies in charge of banking regulations. Their mission is to offer broader products and services to

The team at University Islamic Financial Corporation, Ann Arbor, Michigan. www.universityislamicfinancial.com

If riba’ funded a Halal restaurant, would their food really be considered Halal? Can we genuinely get good from bad or Halal from Haram? It’s an ethical dilemma Muslim business owners must face head on. customers, particularly small businesses. Lengthy as the process may be, we can find comfort knowing people are working to assist us in achieving our dreams. In the meantime, there are other ways for Muslim businesses to obtain funding. Other options include tapping into personal savings, borrowing money from friends/family and selling equity in your company to outside investors. All of these avenues have their pros and cons. Investigate each one to determine which would be a good fit for your distinct business. Also seek the help of a licensed attorney to guide you through these important decisions. In life we will always be presented with trials and tribulations that will test our faith. If you go into a venture unethically, what would you expect the outcome to be? If riba’ funded a Halal restaurant,

would their food really be considered Halal? Can we genuinely get good from bad or Halal from Haram? It’s an ethical dilemma Muslim business owners must face head on. I think the deeper lesson here is the strong sense of community that we are all lacking. If we sought to build our ummah and invest in it not for financial gain but because our people needed it we would be elevating our society. When researching funding options, I came across a Jewish organisation that loaned money to its residents with no strings attached. It was not a bank; just a “community development fund” for different purposes, and amounts with no additional fees. It is in our hands to address the needs of our people. By joining together to bring about new opportunities for our commonwealth we will not only unify we will also excel.

THE HALAL JOURNAL

finance

An Islamic financial instrument is currently being disguised by conventional banks to attract Islamic funds before reinvesting it back into the conventional banking market. And the trend is methodically covert, not to mention worryingly successful.

Commodity Murabahah Words By ZURIN AL QALAM

“I

Bane or Boon?

t is demeaning to the Muslim community if that happens. What is the point of being Shariah compliant halfway? Proper regulation is needed to implement this product to protect investors,” said Mustapha Hamat, chief executive officer of Islamic Banking and Finance Institute of Malaysia. He pointed out that the money must be circulated within a Shariah-compliant money market and must never be channelled back into the conventional trading. “The concept is great but certain regulation needs to be implemented correctly. The product should be Shariah-compliant all the way. A firewall must somehow be implemented to ensure that the transaction does not go back to be traded in the conventional way. Otherwise, the whole product is purposeless,” he said. Murabahah, in the original Islamic context, simply means “sale”. The only feature differentiating it from other kinds of sale is that the seller in Murabahah will declare up front how much cost is incurred and how much profit will be charged in addition to the cost. Commodity Murabahah therefore, is the sale of certain specified commodities, through an 50 THE HALAL JOURNAL

exchange, on a cost-plus profit basis. In the Islamic financial market, Commodity Murabahah refers to investment of funds for a certain period of time supported by commodity traded as the underlying transaction. The party which does the investment is the seller of the commodity while the other party, which receives the investment, is the buyer of the commodity. The payment, meanwhile, may be at spot or it could also be on a subsequent date agreed upon by both parties. In some cases, this kind of sale is being used by the Islamic banks and financial institutions by adding some other concepts as a mode of financing. Nevertheless, the validity of such transactions depends on some conditions acceptable within Shariah. Aminnurullah Mustapha,

general manager for debts, capital markets, structured finance and wholesale banking for Hong Leong Islamic Bank agrees that the existing structure of Commodity Murabahah does not stop the Islamic funds to be invested back into conventional banking. “The structure itself is for buying and selling of commodity and at the end of the day, investors are only concern of their ROI (return of investment). This is already an existing scenario of Commodity Murabahah in the West and in Middle East,” he said.

he Middle East banking industry, which has undertaken the instrument for more than 10 years, has a common understanding that for any sale transaction, where and how the funds are being invested after

the actual transaction; or in other words, after the “third stage”, is none of the investor’s concern. Currently, Commodity Murabahah is using commodities such as metals traded in the London Metal Exchange (LME) where the transaction cost is higher if it is to be used for Ringgit based transactions. However, the different time zones will be an issue in executing the commodity trades to ensure that it matches with the fund transactions. “However, by limiting the trades to value spot and above, such problems could be minimised,” said Khalid Bhaimia, chief executive officer of RHB Islamic Bank. “There will also be other perceived conversion issues like foreign exchange especially for Ringgit based transactions,” he said. “The main plus point of Commodity Murabahah concept however is that it gives a pre-agreed net yield rate of return at the point of transaction and is Gulf Cooperation Council (GCC) compliant,” Khalid added. Khalid also called for a standardise document to approach the industry as currently each institution

“THE CONCEPT IS GREAT BUT CERTAIN REGULATION NEEDS TO BE IMPLEMENTED CORRECTLY. THE PRODUCT SHOULD BE SHARIAH-COMPLIANT ALL THE WAY. A FIREWALL MUST BE IMPLEMENTED TO ENSURE THAT THE TRANSACTION DOES NOT GO BACK TO BE TRADED IN THE CONVENTIONAL WAY. OTHERWISE, THE WHOLE PRODUCT IS PURPOSELESS,” has its own sets of documents. But most financial institution’s main concern in undertaking the product is to find a suitable local commodity for trading. “The best way will be to find a suitable local commodity for trade in Commodity Murabahah. This will reduce transaction costs significantly and will encourage participation. It will also make the offering to the general public possible,” he adds.

arlier reports have indicated that Bank Negara Malaysia and Bursa Malaysia are in the process of using the Commodity Murabahah instrument for its banking products with crude palm oil (CPO) as the underlying transaction tool. The product is expected to be available early next year. Bank Negara Malaysia has also set up a working group comprising representatives from the industry to ensure the success of Commodity Murabahah.

Such commodity-based Murabahah transactions are already widely used in Europe and Middle East within the GCC countries, but by being CPO-based, this product will be the first of its kind anywhere in the world. Thus far, market acceptance to the instrument has been very encouraging. Most local banks also agree that it is only a matter of time before Commodity Murabahah take off aggressively on the local front, which further underlines the need for more regulation and industry’s scrutiny. Azrulnizam Abd Aziz Head Islamic Banking Standard Chartered Bank Malaysia pointed out that since the bank’s introduction of Commodity Murabahah during the third quarter this year, market reaction has been very positive. “We are now seeing similar products being developed by other players,” he said. In July, Standard Chartered had signed the

country’s first Islamic cross-currency swap deal amounting to US$10 billion with Bank Muamalat Malaysia which uses Commodity Murabahah as the underlying transaction. Azrulnizam also pointed out that Standard Chartered is currently working closely with the authorities to establish a local commodity house to broaden the options available for commodity trade, which would also include local commodities such as palm oil and maybe rice in the future. Ismail Aminuddin, general manager of Hong Leong Islamic Bank also added that the bank plans to introduce Commodity Murabahah product by first quarter next year via LME. “When more banks have undertaken the product forward, maybe Bank Negara will look into commodity that can be used for the exchange. Currently, another outstanding issue in implementing the product is the liquidity of the local hj commodity,” he adds. THE HALAL JOURNAL

finance update

KFH INTRODUCES

Ijarah Rental Swap-i Kuwait Finance House (Malaysia) Berhad recently introduced the KFH Ijarah Rental Swap-i, making it the first Islamic bank in Malaysia to obtain approval to launch this product by Malaysia’s Central Bank. The new product is actually a risk management tool suitable for customers who have Ijarah financing arrangements that are either subjected to fluctuations of the reference rates such as cost of funds, or fixed over the Ijarah facility period. It is part of the Treasury solutions, where an arrangement is entered into between the bank and its customers. The customers could be a payer or receiver of lease rental payments, to exchange the series of payments or receipts from floating to fixed rental amounts or vice versa over a stated lease period. The tenures of the product varies in accordance with the requirements of the customer and can be

HSBC to expand local

Islamic banking operations

HSBC Bank Malaysia Bhd is taking proactive steps to further develop its Islamic operations in the country by introducing more products and possibly even setting up an Islamic subsidiary here in Malaysia. Its executive director and deputy chief executive, Ian Ogilvie said the bank aims to increase its Islamic assets which currently account for 15 per cent of the bank’s overall balance sheet. “We will continue to develop our Islamic operations and will constantly introduce more innovative products that can suit our consumers. There is a lot of room for Islamic banking to grow here as Malaysia has been taking progressive steps towards becoming a global centre for Islamic financial activities,” he said.

FIRST SWISS ISLAMIC PRIVATE BANK LAUNCHED

By decision of the Swiss Federal Banking Commission, Faisal Finance (Switzerland) SA was awarded a full banking license, which will now be known as Faisal Private Bank (Switzerland) S.A. Commenting on the banking license, Khalid Abdulla Janahi, Chairman of Faisal Private Bank (Switzerland) SA said: “Following three consecutive years of abovemarket performance as Faisal Finance, Faisal Private Bank certainly adds value by providing Ithmaar’s group-wide clientele and potential partners with their own bank within the safety of Switzerland. “A milestone in the history of private banking, Faisal Private Bank Switzerland also illustrates the appeal and competitiveness of a global business model guided by the ethics of the Shariah. My colleagues on the Board of Directors join me in expressing confidence in the success of our Swiss bank,” he added.

52 THE HALAL JOURNAL

The signing ceremony between KFH and AirAsia, which is one of the customers taking up the new KFH Ijarah Rental Swap-i facility.

priced for longer tenures of 10 years or more thus enabling Ijarah customers to effectively hedge their longer tenure risk. Meanwhile, KFHMB marked its first anniversary on Sept 21 with news that the Rating Agency of Malaysia had accorded positive ratings, assigning respective long- and

short-term general bank ratings of AA2 and P1 to the bank. The longterm rating has a stable outlook. In its first 14 months of operations as an Islamic bank, KFHMB posted a pre-tax profit of RM1.84 million. The bank’s returns on equity and assets stood at 0.42% and 0.32%, respectively, as at end-December 2005.

CIMB TRANSFORMS INTO UNIVERSAL BANKING GROUP

CIMB, the region’s largest investment bank, announced its transformation into a universal banking group called CIMB Group early September. The launch of CIMB Group marks the culmination of the 3-way merger of Commerce International Merchant Bankers Berhad (CIMB), BumiputraCommerce Bank Berhad (BCB) and Southern Bank Berhad (SBB) to form a universal banking group. CIMB Group’s transformation started in late 2004 when it started to undertake mergers and acquisitions worth RM12.8 billion, including merger with Singapore stockbroker GK Goh, and landmark mergers with Bumiputra-Commerce Bank (BCB) and Southern Bank (SBB). In just 18 months, CIMB Group has grown from a staff strength of 1,000 in Malaysia to 20,000 in 12 countries. Its market capitalisation increased from RM6.3 billion to RM19.5 billion. The Group’s total assets grew from RM14.7 billion to RM155 billion with a further RM18 billion being third party funds under management. CIMB Group also paid tribute the 12 financial institutions which contributed to the Group’s rich heritage which included banks such as Bian Chiang Bank, Ban Hin Lee Bank, Bank of Commerce and Bank Bumiputra as well as the thousands of people who contributed to their growth. CIMB Group CEO, Dato’ Nazir Razak said, “Our rich heritage risks fading into obscurity under the pressure of the forces of liberalisation and deregulation, unless we confront the challenges and seize the opportunities that the changes bring. We had to change. We had to transform ourselves now or risk being marginalised. We had to act swiftly or miss our chance to fulfil the ambitions of our founding fathers.” CIMB Group has 3 brand entities including CIMB Bank, CIMB Investment Bank (formerly Commerce International Merchant Bankers), and CIMB Islamic (formerly Commerce Tijari). The Group’s new tagline “Forward Banking” reflects its promise to create value for customers through forward thinking. CIMB Bank regional director for central 2, Nik Johaan Nik Hashim demonstrates to CIMB Bank chairman Tan Sri Haidar Mohamed Noor (extreme left) and CIMB group chairman Tan Sri Md Nor Yusof the LCD touch screens where customers can gain financial information during a recent launch of their branch at The Curve in Mutiara Damansara.

subscription

Know what’s going on in the Global Halal Market STAY UP-TO-DATE WITH THE HALAL JOURNAL Global Halal News Halal F&B Industry Halal Standards & Certifications Islamic Finance Supply-Chain Logistics New Products WHO SHOULD SUBSCRIBE Primary Producers Manufacturers Importers & Exporters Halal Certification Bodies Halal Industry Players Supporting Industries

to subscribe online log on to

I WOULD LIKE TO SUBSCRIBE TO THE HALAL JOURNAL FOR Name Organisation Address Postcode Phone

6 issues

City Fax

SUBSCRIPTION RATES (PLEASE TICK (√) YOUR LOCATION) Malaysia RM59.40 Asia/Pacific US$24.90 6 issues Malaysia RM115 Asia/Pacific US$49 12 issues

WWW.KASEHDIA.COM

12 issues Position

State Email Rest of World US$29.90 Rest of World US$59

PLEASE SELECT AND TICK (√) A PAYMENT OPTION BELOW (a) I enclose a cheque for RM payable to KasehDia Sdn Bhd Please invoice me at the address above. (b)

KASEHDIA SDN BHD • 31-2 PLAZA CRYSTALVILLE, JALAN 22A/70A, DESA SRI HARTAMAS, KUALA LUMPUR, 50480, MALAYSIA • tel: +6 03 6203 1025 • fax: +6 03 6203 4072 • website: www.halaljournal.com • email: info@halaljournal.com

2006 NOV+DEC THE

HALAL

JOURNAL

LIVING

ISLAM & THE ENVIRONMENT TAGINE, DUBAI MERCAN DEDE BRAZIL: THE COMEBACK KID OF SOUTH AMERICA COLGATE’S KAYU SUGI

ISLAM and the Environment When will Muslims realise that part of jihad is also to care for the environment? We’re paying too high a price for neglecting God’s natural treasures. There is a war that needs to be addressed: prolonged environmental abuse is detrimental to the next generation of ummah.

THE HALAL JOURNAL LIVING

Islam and the

ENVIRONMENT Words By DINA ZAMAN

s a consumer that prides herself and is willing to pay for organic or environmentally friendly products, I find my choices rather lacking in Malaysia. The consumer has a wide range of imported organic brands to choose from, from cosmetic brands like Aveda, Origins, and The Body Shop, but apart from the rather small amount of organic produce sold at better supermarkets, small stand alone organic boutiques, and herbal supplements – jamu –, which one gets at smaller shops and from family back in the kampong, the shopper does not have the opportunity to sample Malaysian environmentally-friendly products. It’s a shame that for a country so rich in natural resources, Malaysia is devoid of any well established, eco-friendly business. And while consumers beg, steal and shop overseas for organic cosmetic brands, there is great disrespect for

56 THE HALAL JOURNAL LIVING

the environment back home. Takeaway food is packed in styrofoam boxes which are then thrown carelessly into the trash or by the roadsides; our cities are lighted up with fairy lights and other urban decorative paraphernalia which, while attractive, consumes a lot of energy. Elsewhere, green business literally means green bucks rolling in and businesses are not looking back. CEOs of energy, food, retail organisations to name a few have realised that giving back and caring for the environment means profit. That one can make money and be ethical at the same time. Newsweek reported on August 14, 2006 that Tesco, the world’s third largest retailer, “…is pumping £100 million into environmental technologies to reduce the amount of energy they use by 50 percent, compared with 2000 levels, by 2010. In addition to building 80 new

ecostores across Britain over the next year—the greenest of which will be constructed of recycled materials and will burn food waste for electricity — they’re also making small changes that could have big effects. They’re paying customers not to use plastic bags, which they expect will cut consumption by 25 percent in two years.” In another example of a conglomerate pursuing this (ecofriendly) vision, Newsweek in the same article quoted that Renewable Energy Corp. (REC), a Norwegian solar-energy company, had the world’s largest-ever renewable energy IPO in May. “…It was 15 times oversubscribed and raised more than $1 billion, valuing REC at nearly $7 billion. You wouldn’t mistake REC’s CEO Erik Thorsen for a New Age Joni Mitchell. ‘I don’t have anything against helping the environment,’ says Thorsen. ‘But the main driver for us is profit.’”

Islam and ‘eco-friendly’ are not two words and concepts that one associates immediately, truth be told. In fact, they seem to be worlds apart! From a cursory survey conducted among friends living across the globe, the two are alien to each other. But is Islam against being environmentally friendly? No. Far from it, Islam teaches man to not only respect his neighbour but also Mother Nature. The Quran is peppered with relevant verses that encourage the ummah to protect and care for the environment.

DID YOU KNOW…? DEATH

COST

WATER

REFUGEES

HUNGER RESOURCE

150,000 people die every year from the effect of climate changes.

The economic costs of global warming are doubling every decade.

By 2025, more than 3 billion people could be affected by serious water shortages.

The UN expects 50 million environmental refugees by 2010 and 150 million 2050.

30 million people may be hungry because of climate change by 2050.

Source: ifees.org.uk

tables out its work and projects. We have to think beyond dates and oil, and kosher food – Halal products can come in many forms, and must be environmentally friendly. And how! There’s a

Wars over increasingly scarce resources, such as water and fertile land, are becoming more frequent.

living as minorities in Europe (especially in the UK) and America are a great impact on the global Halal market. This is a huge market to exploit. However, to support that demand, do we have eco-friendly Halal products that we can think of at the top of our heads? When will there be a Halal cosmetic brand along the

WHEN WILL A MUSLIM ENERGY COMPANY BE KNOWN NOT ONLY FOR ITS ISLAMICITY BUT ALSO ITS PROGRESSIVE TAKE ON ECO-FRIENDLINESS? WHEN WILL THE WORD AND CONCEPT OF HALAL BECOME AS SYNONYMOUS AS GREEN? One Islamic organisation that bases its work on Islamic principles to care for the environment is the Islamic Foundation for Ecology and Environmental Sciences (IFEES) which is based in the UK and its objectives include research and the dissemination of information, producing teaching materials, books and journals, training on practical and theoretical subjects and the setting up of an experimental centre focusing on land use and organic farming and also the development of alternative technology. IFEES is perhaps the only internationally recognised body articulating the Islamic position on these matters and at the same time attempting to give practical manifestation to this. Its website www.ifees.org.uk

lot of work to do! Research, marketing, manufacturing, branding – setting up such an industry is not going to be an overnight success. All is not lost – in Malaysia, the palm oil industry has come up with creative and eco-friendly ways of producing and marketing its mainstay product. The Star newspaper reported on August 1, 2006 that eco-friendly mats developed from discarded oil palm bunches will be used at the 2008 Beijing Olympic Games. It is estimated that the number of Muslim throughout the world is around 1.3-1.6 billion people and the Halal market is estimated at billions of dollars. South East Asia and Middle East are the two major Halal markets due to the concentrations of Muslims in this region, but other Muslims

lines of Bobbi Brown and The Body Shop, that’s immediately known as an excellent product, regardless of its Halal origins? When will a Muslim energy company be known not only for its Islamicity but also its progressive take on eco-friendliness? When will the word and concept of Halal become as synonymous as green? In my humble opinion, the word Halal also extends to a community benefiting from an enterprise. By going green, Halal businesses are also helping communities earn a living. For example, let’s look at the potential of jamu (or herbal products) in Asian countries such as Indonesia, Malaysia, Thailand, the Philippines – (1) it provides an income to poor or marginalised communities. Remember the Body Shop model! (2) it is a Halal product by itself as it is completely plant based and (3) it is a big industry. We have the resources - why not put this into action? It has already been proven in the West that being eco-friendly and healthy profits go hand in hand. We also know that Islam cares for the environment. When will we put what Allah hj has decreed into practise, and go green? THE HALAL JOURNAL LIVING

browsing Restaurant Review

Tagine, Dubai Tadlekt walls of desert colours and stone floors enhanced with low lighting from the traditional brass lanterns make this a small oasis. The music is both live and background with the combination of an oud player and hand drums, or the gentle strains of Moroccan qasidas. We began with the Moroccan Hareera soup to dig right into the cuisine. The next choice was a bit more difficult as we couldn’t decide whether to go couscous or tagine. We agreed on the Pastilla al Bahr which was the most delicate flakey pastry surrounding seafood, vermicelli noodles and herbs, and then split our choices with a Chicken tagine with onions, garlic, ginger and saffron and a Lamb couscous. We were more than content with our final choices. Desserts choices were Roz bil haleeb or Orange salad, but almond pastries accompanied by mint tea were our choice. All was served proficiently by the excellent Moroccan staff making our Moroccan journey complete. Address: The One & Only, Royal Mirage, Jumeirah Beach Rd, Umm Suqeim, Dubai. | Tel: 399 9999 | Opening hours: Tues-Sun 7pm1am | Specialties: Moroccan dishes, tagine, couscous | Price range: Starters: Dhs30-60 • Main: Dhs65-120 • Dessert: Dhs30

CD Review

MERCAN DEDE, NEFES

Book Review

FOOD & TECHNOLOGICAL PROGRESS: AN ISLAMIC PERSPECTIVE

Got the urge to try something new? Check out Mercan Dede, a Turkish composer, ney (reet flute) and knun (zither) player, DJ and producer who also happens to be a leading world music artist, playing a fusion of acoustic Turkish and other oriental music infused with electronic sounds. Mercan Dede subtly (and brilliantly!) fuses Eastern spiritual traditions of Sufi music with contemporary ambient sounds to create a unique mix of old and new, sacred and secular, East and West. His best known albums include Seyahatname and Nar and his latest is Nefes, released earlier this year. Mercan Dede’s music may unmistakably be modern, but it clearly grows out of the otherworldly heart of the sema ritual of the Whirling Dervishes of Sufism. Highly intoxicating. 58 THE HALAL JOURNAL LIVING

This compilation of papers on issues pertaining to food security and technology is a good reference point for all existing and would-be Halal manufacturers as it assembles the many insights from Malaysian Halal industry leaders who have extensive experience in food manufacturing and security. Penning down their thoughts, observations and research in a clear and easy to understand language, the panelist, some big names in the industry including Ahmad Sarji Abdul Hamid, Nik Mustapha Nik Hassan, Mohamed Sadek and Yusof Basiron, provides a good look at the food industry from the perspectives of Shariah. Other relevant Halal-related issues include GMO foods in Malaysia, Halal marketing, Halal supply chain, Halal’s nutritional values and the Halal from the perspective within the fats and oils industry.

ISLAM, KNOWLEDGE AND OTHER AFFAIRS

MAHATHIR MOHAMAD MPH Publishing ISBN 983-3698-03-4

Dr Mahathir Mohamad has always called a spade a spade, and is still not afraid to speak his mind. As he goes against the tide of conventional thinking in this collection of speeches, he imparts a wisdom which comes from a man who believes that God will not change one’s fate unless he himself makes the effort to do so. He again reminds Third World nations on the peril of unbridled globalisation and reminds us against ritualising Islam, as he urges Muslims to shed their preoccupation with rituals and start pursuing excellence in other sciences and branches of knowledge. With this collection of speeches delivered all over the world throughout his tenure as the Malaysian prime minister, Dr. M articulates his thoughts and argues his points with characteristic aplomb and honesty.

Books courtesy of MPH Mid Valley. For more information, please log on to www.mph.com.my.

EDITED BY SHAIKH MOHD SAIFUDDIN SHAIKH MOHD SALLEH & AZRINA SOBIAN MPH Publishing ISBN 983-42884-3-3

• Alamanda, Putrajaya 03-88893604 • Carrefour Wangsa Maju 03-41423661 • Endah Parade 03-95434836 • Carrefour Subang Jaya 03-56354785 • Mid Valley 03-22841406 • Warta Bangi Utama 03-82104836 • KL Sentral 03-22737421 • Carrefour Prai, Penang 04-3700836 • Giant Plentong, JB 07-3583749 • Jusco Tebrau, JB 07-3562293 • Megamall Kuantan 09-5088059

country in focus

BRAZIL Words By TONG YEE SIONG

The Comeback Kid of South America

For the longest time, Brazilians have tortured themselves with the question of why their country can’t prosper like the United States? After all, both dominate their respective halves of the Americas, are amply endowed with a huge population, and are blessed with ample land and natural resources.

ot anymore. Brazil is no longer seen as the under-achiever in South America. In recent years, things have turned around dramatically in Brazil. Its economy now makes up one-third of the region, and is the eighth largest in the world. Brazil’s prospects are so bright that even the recent political uncertainty could do little to diminish them. While President Luiz Inácio Lula da Silva of Brazil failed to win an outright majority in the October 1 presidential poll - leading to a surprise run-off election against the centre’s Geraldo Alckmin on October 29 - it is undeniable that Brazil has improved tremendously during the four years of Lula, as 176 million Brazilians simply call him, in office. By international definitions, Brazil is today a middle-income rather than a poor country. Inflation is at its lowest level in decades. As the spending power of the poor has increased, the prices of many foods have actually fallen. And the government has introduced new forms of credit - payroll-linked lending, under which instalments are taken straight from the borrowers’ wage packets - in 2004, leading to strong growth in domestic consumption. Such stable economic conditions have enabled Brazil to register rapid economic expansion in recent years. In 2001, investment bank Goldman Sachs coined the term BRICs for Brazil, Russia, India and China. It did so to call attention to the four countries’ potential for fast and sustained growth. By 2041, Goldman predicted, the four economies would be worth more than those of the US, Japan, Germany, the United Kingdom, France and Italy put together. But things were not always rosy for Brazil. Up to mid-1990s, stratospheric inflation rates had disrupted economic activity and discouraged foreign investment. Since then, tight monetary policy has brought inflation under control. Another big challenge for Brazil came in 1998, when,

60 THE HALAL JOURNAL LIVING

following Russia’s debt default, the Brazilian Real faced enormous pressure. Capital continued to leach out of the country amid concern about Brazil’s debt and overvalued currency. The Real was subsequently devalued to make Brazil’s exports more competitive. Still, in retrospect, chief among the reasons that contributed to Brazil’s economy is rocketing global demand for its commodity exports - led by China, India and other fastgrowing markets. At the same time, low international interest rates and a glut of liquidity have contributed to what is for Brazil an extraordinarily benign international environment. Brazil is recording trade surpluses of more than US$40 billion a year, a factor that has allowed the country to pay off external debts. At the same time, the Real has gained about 65 per cent in value against the US dollar under the Lula administration, underpinning price stability and benefiting the poor. Critics say favourable global conditions have contributed to a lack of urgency for Lula to follow up initial efforts to reform the public sector by trimming spending publicsector payrolls and pensions. While exports continue to rise, they are increasingly led by

iron ore and other commodities with little or no added value, critics added. Meanwhile, thousands of companies in manufacturing sectors such as footwear and textiles have gone out of business because a strong currency has eroded their competitiveness in global market. Be that as it may, barring a sudden downturn in the world economy which, in turn, weakens the insatiable hunger for raw materials, Brazil’s dependence of its commodity exports seems likely to remain a feature of its economy over the medium term. AGRICULTURAL MODERNISATION Under an agricultural modernisation programme, the Brazilian government poured money into investments that enable farmers and ranchers to operate more efficiently. In 1971, it established a research institute called Embrapa to pioneer innovative farming techniques. The government also encouraged the consolidation of inefficient 250-acre farms into enormous plots 10 to 50 times as large. Unlike countries like India and China, Brazil’s farms were increasingly operated by large agribusinesses that chose to shift towards more diversified crops. Agricultural exports soon began growing faster than the overall economy starting in the

obligations under the Kyoto Protocol to cut emissions. Sugar, a staple in Brazil since Portuguese colonists planted it in the 16th century, is only one of the crops that make Brazil the world’s emerging agricultural powerhouse. Thanks to virtually unlimited acreage, ideal weather conditions and advanced technology, Brazilian farmers are also No. 1 in exports of beef, coffee and orange juice, and are quickly climbing the charts on other commodities, such as soybeans. Aside from that, Brazil is one of the largest exporters of guavas, lemons, mangoes, passion fruit, tangerines and tobacco. That success in world markets has given American farmers a powerful competitor and has given Brazil a seat at the table where global trading rules are written. In the ongoing “Doha Round,” Brazil and India lead a group of 20

tariffs on these products and on frozen cattle beef, fish and industrialised chicken - in anticipation of higher poultry consumption for the fasting month and the subsequent Aildil-Fitri celebration - Brazil quickly seized the opportunity and started exporting large volumes of chicken meat to the Egyptian market. According to newspaper Al Ahram, the main paper in the African-Arab country, 20,000 tonnes of frozen chicken, produced in Brazil, arrived in Egypt on September 5. Each tonne exported costs on average US$ 2,000. Therefore, a shipment of 20,000 tonnes would have cost about US$40 million, representing around 19 per cent of Brazil’s poultry revenue on the foreign market in the month of July. RICH MINERALS Adding to Brazil’s fortune is its large reserves of important industrial metal

After nearly three decades of work, sugarcane is now one of the main crops in Brazil. Apart from being used as raw material for sugar, it has also become a costeffective alternative to gasoline. For this reason, Brazil expects to become energy independent this year. mid-1980s. From 1994 to 2004, Brazil’s exports grew 8.7 per cent annually. After nearly three decades of work, sugarcane is now one of the main crops in Brazil. Apart from being used as raw material for sugar, it has also become a cost-effective alternative to gasoline. For this reason, Brazil expects to become energy independent this year. Ethanol now accounts for as much as 20 per cent of Brazil’s transport fuel market. The country’s use of gasoline has actually declined since the late 1970s, whereas the use of alternative fuels in the rest of the world is a scant 1 per cent. Brazil says its ethanol exports will likely double to US$1.3 billion in 2010 from US$600 million in 2005, largely to Japan and Sweden. These countries hope using ethanol - which releases less carbon dioxide than fossil fuels - will help them meet their

developing nations seeking dramatic changes in the way crops are raised and traded. If there’s to be a new trade pact, Brazil’s demand for greater access to protected markets in rich countries must be satisfied. Even so, Brazil’s agricultural potential has yet to be fully exploited. The country is larger than the 48 lower states in the US, and today grows crops on only 19 per cent of its 790 million cultivable acres. Going hand in hand with Brazil’s agricultural modernisation is the improvement in its traditionally backward livestock industry. Apart from beef, the country is one of the largest exporters of poultry and swine sub sectors to countries, including many with a sizable Muslim population. For example, when Egypt recently permitted for six months the import of frozen chicken, fresh and powdered eggs, and eliminated import

minerals such as bauxite, Kaolin, iron ore, niobium and nickel. Brazil is also a major producer of several other key commodities such as gold, coal and phosphates. The minerals sector employs about 4 per cent of the total workforce (approximately 650,000) of Brazil. Thus, soaring metal commodity prices in recent years are a welcomed development in Brazil. The recent windfall revenue from the mining sector is serving to entrench Brazil’s presence in the international market further. In August, Brazil’s Cia. Vale do Rio Doce (CVRD), the world’s largest iron ore miner, offered US$15.3 billion plus debt assumption for Canada-based miner Inco Ltd in a bid to become the planet’s largest nickel producer. Currently the world’s second-largest producer of nickel after Russia’s Norilsk Nickel, Inco also mines and processes

world’s top exporters BEEF (IN MILLIONS OF METRIC TONS) BRAZIL AUSTRALIA ARGENTINA

1.8 1.5 0.7

COFFEE (IN MILLIONS OF 132LB BAGS) 22.0

BRAZIL VIETNAM COLUMBIA

11.8 10.9

SUGAR (IN MILLIONS OF METRIC TONS, RAW) BRAZIL AUSTRALIA THAILAND

18.3 4.2 2.7

NOTE: FORECAST FOR 2006. SOURCE: DEPARTMENT OF AGRICULTURE, FOREIGN AGRICULTURE SERVICE

copper, gold, cobalt and platinum. CVRD’s latest plan came at the heels of its earlier announcement that 80 per cent of its planned US$4.6 billion in new investment this year is linked to meeting China’s demand. That spending would help create 20,000 new jobs, the company says. All said, it’s clear that Brazil’s macroeconomic situation is driving the expansion. While Lula may not be the long-awaited Messiah for his people - some economists have constantly attributed the country’s recent achievement to factors other than Lula’s policies - there is still a real possibility that Lula may secure a fresh mandate and use that to push forward further reform that is demanded of him in his second and final term. This will be necessary as the international economic environment will not remain clement forever. Moreover, foreign investors in recent years have claimed that Brazil’s economy is being held back by high taxes and interest rates, which are largely a consequence of high and inflexible government spending. Should Lula win, and succeed in his reform agenda, which leads to increased foreign investment tapping into the country’s rich resources, Brazil’s growth engine will continue to rev for quite some time to come, making it finally the true equivalent of the US in the hj Latin American world.

THE HALAL JOURNAL LIVING

on display HALAL PRODUCTS ARE THOSE THAT ARE GOOD, PURE AND SAFE FOR HUMAN CONSUMPTION. IT RANGES FROM FOOD TO COSMETICS, PHARMACEUTICALS TO TOILETRIES. HERE ARE SOME OF THE PRODUCTS WITH THE HALAL GUARANTEE.

Prima’s Range of Malaysian Ethnic Food

From Malaysia’s foremost manufacturer of Halal processed food, Prima Agri Products recently introduced their latest retail package for Ramadan and Syawal. Consisting of five traditional Malay dishes, Prima’s vibrant packaging is not only attractive but also provides easy-to-understand reheating instructions and indicates how hot the dishes are - mild, hot or very hot. Just like other authentic Malaysia dishes, minus the effort, Prima’s latest range is easy to prepare. Just reheat the microwavable packet and in less than 0 minutes, you’ll have piping hot and very delicious rendang, masak lemak cili api or sambal tumis nyonya. Each 500gm pack serves between 3 - 4 servings and retails around RM11.25 – 12.50 per packet. Check them out www.primahalal.com.

Bateel’s Gourmet Dates

This Riyadh-based brand of premium confectionery-dates manufacturer started with a simple concept of selling and distribution a complete range of dates. Bateel offers five main types of dates, including Balah, Rhutab, Tamr, pressed dates and dates with Dhibbs. It also owns and operates the only factory in the Middle East that produces gourmet chocolates including pralines, chocolate truffles, pastries and jams. Merge these two together and you get an entirely new line of unique datebased chocolates and premium gourmet confectionery. Naturally delicious and nutritious too, these high fibre dates are a great source of carbohydrates, potassium, vitamins and minerals. Check out their first retail outlet outside of the Middle East, which opened in Kuala Lumpur in 2002 within the Suria KLCC Shopping Centre. For more info, log on to www.bateelasia.com or email info@bateelasia.com.

Parason’s Alpha Lipoic Acid

US-based Parason Health Products, Inc. is one of the latest herbal supplement manufacturers to be certified by the Islamic Society of North America (ISNA). Their state-of-theart, NNFA/NSF GMP and ISO 9001:2000 registered facilities produce supplements, nutraceuticals and sports nutrition products that are extensively tested for purity, potency, efficacy and safety. And one of their best selling products is the Alpha Lipoic Acid’s, or ALA, which possesses a strong antioxidant property that can fight free radicals on a cellular level, and is especially powerful in preventing vitamin C and E deficiencies. ALA, also known as lipoic acid, thioctic acid or dihydrothioctic acid, can also help control glucose levels. Parason’s ALA 100mg should be taken daily, preferably with a meal and water, or as directed by a qualified health care practitioner. Pregnant or lactating women should consult with their physician prior to use. For more info, please email info@parason.com or log on to www.parason.com.

Ummah’s Chocolate Bars

If you happen to be in UK, try grabbing one of these and help them make a difference. Currently on trial at selected local Tesco and Asda stores, chocolate enthusiasts will appreciate the Ummah chocolate bars delivering a perfect balance of intense, slow melting milk chocolate and rich ingredients. The Ummah Caramel with a soft centre of premium caramel enrobed in milk chocolate and the Ummah Orange crème are simply delicious. The trial will determine whether Ummah bars will achieve the vision they set out to fulfil - to reach one billion Muslim consumers globally with the hope of helping and supporting Muslim and non-Muslim need across the world. Grab that bite at www.ummahfoods.com.

Colgate’s Kayu Sugi Toothpaste

Colgate-Palmolive (M) Sdn Bhd recently released their new Colgate Kayu Sugi toothpaste, striped with Kayu Sugi (miswak) and fortified with Colgate’s unique fluoride and calcium formula. This precursor to modern day oral care products has been used throughout history to keep teeth strong and breath fresh. Combining science and nature, the new toothpaste targets the growing group of consumers with affinity to natural remedies, improving oral hygiene by complementing miswak’s traditional use with modern technological developments such as tooth brushing. This new product is available at all leading hypermarkets, supermarkets, retail outlets and pharmacies and retails at RM5.80 and RM1.00 for a 175 gram and 35 gram tube respectively. For more info, log on to www.colgate.com.my.

62 THE HALAL JOURNAL LIVING

classified

TO ADVERTISE > tel +603 6203 1025 fax +603 6203 4072 email info@halaljournal.com

HALAL TRAINING PROGRAMME (CHO速) A comprehensive human capital development training conducted on part-time/ full-time basis. AIM: To produce trained, competent and responsible personnel that will plan, direct and supervise Halalness/Halal assurance division for the complete implementation of Halal concept in an organisation. WHO SHOULD ATTEND AND BENEFIT? Manufacturer Trade Consulate Importer / Exporter Trade Association / Chamber Distributor Hotelier & Restauranteur Wholesaler Investor Hypermarket / Supermarket Halal Certification Body Government Institution Professional / Businessmen REGISTER ANYTIME! THE PROGRAMME IS NOW ON! For further details, please contact: SECRETARIAT, HALAL TRAINING PROGRAMME (CHO速) HALAL INDUSTRY RESEARCH CENTRE c/o Advanced Engineering and Innovation Centre International Islamic University Malaysia P.O. Box 10, 50728 Kuala Lumpur, Malaysia Tel: +603-61964499 / 4498 / 4496 E-mail: secretariat@halaltraining.com Website: www.halaltraining.com

parting words As a member of the Organisation of Islamic Conference, Muslim-majority Kazakhstan is looking to re-establish its long lost ties with other Islamic countries around the world. And the idea of using Halal as a tool to achieve this was simply natural.

Opening Up a Whole New World with Halal The Kazakhstan delegate rode into town recently and The Halal Journal managed to catch up with the chairman of its first Halal certification agency, Hajj Marat Sarsenbayeva, a fellow Muslim who came from far, just to learn. This is his story. HOW DID THE IDEA START FOR KAZAKHSTAN TO USE HALAL AS A TRADING TOOL? “Halal development started in mid 2004 when the idea was mooted to establish Halal parks in Kazakhstan. Initially we faced lots of trouble because nobody knew where to look. The first visit was to Moscow, and then to Tatarstan, but they had not come across any Halal standards being used within the governmental level. Then we went to Turkey and Saudi Arabia. Again, no official government documents on how Halal standards are being implemented. But during our visit to Saudi Arabia, a Kazakhstan government representative to the OIC, Mr. Askar Mushen, told us about the MS1500:2004 Halal food standard from Malaysia. After that break, we managed to get new business contacts, new experiences and got introduced to the Halal system of JAKIM.”

‘‘

WHAT HAVE YOU OBSERVED SO FAR IN YOUR SEARCH? “During our visit in MIHAS 2005, it was interesting that the concept of Halal is being implemented more by the non Muslim countries like Brazil, the U.S, Australia and New Zealand. They are producing Halal products on a large scale for Muslim consumption and we wondered how come a Muslim nation like Kazakhstan can’t do the same. So now, we are going ahead with this vision for a local Halal standard with renewed vigour.” NOW THAT YOU HAVE FOUND US, WHAT’S NEXT? “After we scrutinise the Malaysian Halal standard, we will improve our Kazakhstani Halal product manufacturing processes and improve on the local Halal standard. As it is, we have already got a Halal standard approved by the

It was interesting that the concept of Halal is being implemented more by the non Muslim countries like Brazil, the U.S, Australia and New Zealand and we wondered how come a Muslim nation like Kazakhstan can’t do the same.

’’

government, and that approval number is STRK 1353.05 Halal. This is the official document on the standard position on Halal. With this, Kazakhstan is the only country where we have a proper Halal standard and certification amongst the former Soviet countries.” “Also, we currently have only one chemical laboratory in Kazakhstan and we need to improve and enhance this facility. For that, we are going to send two students to the Chemical Department of Malaysia to study the new scientific methodologies. We will also send two other students to learn the Malaysian Halal standards and others related standards. These are short courses of two weeks to a month.” HOW IS THE CURRENT STRUCTURE OF OBTAINING A HALAL CERTIFICATION IN YOUR COUNTRY? “The current standards decision on Halal product is obtained in two 64 THE HALAL JOURNAL

ways - the governmental standards decision and through the Muslim Committee of Kazakhstan. Both of these organisations are linked to one technical committee. The technical committee has its own representative in each 16 regions of Kazakhstan, and these experts control the Halal products in each region and indirectly fulfil roles of the Shariah. Our food standard decision is also good, but because our Halal industry is different from other industries, there are new lessons to be learnt. That is why we have to continually enhance and improve our existing standards on Halal.” WHAT DO YOU THINK OF THE PROSPECTS OF HALAL IN KAZAKHSTAN? “Kazakhstan in a multi racial country but the majority is Muslim, about 70 per cent of the population. The interest in Halal products is very big and increasing as the consumers are growing everyday.“ “We plan to certify Halal meat products first, and then we will develop for the milk and dairy industry, as well as confectionaries. Next are perfumery, cosmetics and medicines to make them comply with Halal standards.” “But we are just beginners in this Halal industry. Kazakhstan is very young and we consider Malaysia as taking the leading role in the global Halal industry. We are going to learn more experience from Malaysia and get to the highest peak of Halal development in the future, just like hj Malaysia has.”

MATRADE