Halal logistics in malaysia and 5 continents

HALAL LOGISTICS

MOHD FARID AWANG
AMIN ABDULLAH
NORHAIZUM SAHRIL

GBI 795 – UiTM Shah Alam

CONTENT

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


INTRODUCTION

•  What is Halal?
•  Halal products
•  Muslim population


Halal
Halal is used to describe anything permissible
under Islamic law, in contrast to haram, that
which is forbidden.

This covers aspects such as behavior, speech,
dress, conduct, manner, and dietary laws.

This dichotomy of usage is similar to the Hebrew
term "kosher".
Ir. Marco Tieman, ASEAN Logistics Network Symposium 2010
Bangkok, 8-9 October 2010

HALAL HUB DIVISION : JAKIM


Halal Products
!  The production & consumption of Halal
food has been traditionally the main
focus of the Halal industry.

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

!  Halal is extending both upstream (like
animal feed) and downstream (like food
services) the value chain and includes
logistics!
Ir. Marco Tieman, ASEAN Logistics Network Symposium 2010
Bangkok, 8-9 October 2010

The People


THE HALAL
LOGISTICS


•  Hypermarket
•  Supply chain •  Restaurant
•  Online •  Canteen
•  Pasar malam


HOW ALL THESE FOODS
DELIVERED? IS IT (SC)
CLEANS? DO THE
SUPPLIER HAVE HALAL
LOGISTICS @ SC?


WHY NEED HALAL
LOGISTICS?

Ensuring integrity from farm to fork

Ensuring integrity from seed to fork


WHAT IS HALAL LOGISTICS?


DEFINITION

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

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


THE PRINCIPLES

Halal products are segregated from non-
Halal products to:

1. avoid (cross) contamination
2. avoid making mistakes
3. ensure consistency with Shariah and
the expectations of the Muslim Consumer


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


HALAL LOGISTICS
SUPPLY CHAIN


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


EMERALD JOURNAL : Marco
Tieman, (2011),"The application of As argued by all people interviewed, the
Halal in supply chain management: perception of the Muslim is different,
in-depth interviews depending on the Islamic school of
thought, local Fatwas (religious rulings)
and local customs. As mentioned during
one of the interviews, Brunei requires even
full segregation between stunned and non-
stunned Halal slaughtered meat.

Risk product characteristics:
•  wet products have a higher
risk as compared to dry
products; and
•  bulk products have a
higher risk than unitised
products

Foundation of Halal supply chain management

Halal control activities and
assurance activities in the
Halal Supply Chain

•  Warehouse
•  Transport
•  Terminal

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

1. Halal control activities and assurance activities in the warehouse


2. Halal control activities and assurance activities in transport


3. Halal control activities and assurance activities in terminals


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

HALAL SUPPLY CHAIN MODEL
(Developed based on SC model by van der Vorst and Beulens
(2002), based on Cooper’s SCM framework (Cooper et al., 1997)

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


MALAYSIA HALAL LOGISTICS PROVIDER

NO# COMPANY# ADDRESS## WEBSITE#

Lot"37,"Lebuh"Sultan"Mohamad"1,"Kaw."Perindustrian"
1"CITRA"MULTIMODAL"SERVICES"SDN"BHD" Bandar"Sultan"Suleiman,"Pelabuhan"Klang,"Klang" www.citra.com.my"
Selangor"
Lot"37,"Lebuh"Sultan"Mohamad"1,"Kaw."Perindustrian"
2"FREIGHT"MANAGEMENT"(M)"SDN"BHD" Bandar"Sultan"Suleiman,"Pelabuhan"Klang,"Klang" www.fmmalaysia.com.my"
Selangor"
No."3,"Jalan"Sungai"Kayu"Ara"32/40,"
3"GOLD"COLD"TRANSPORT"SDN"BHD" Seksyen"32,"Berjaya"Industrial"Park," www.goldcold.com.my"
40460"Shah"Alam"
NO.1,JLN"13/5,"SUBANG"JAYA"
4"HAVI"LOGISTICS"(M)"SDN."BHD." 47500,"PETALING"JAYA"
SELANGOR"DARUL"EHSAN" ""
Lot"506,"Jalan"Pelabuhan"Utara,Bandar"Sultan"Suleiman,"
5"IGLO"(M)"SDN.BHD." 42000"Pelabuhan"Klang,"Selangor"Darul"Ehsan," www.iglo.com.my"
Malaysia."
No."3,"Lengkuk"Gerudi"oﬀ"Jln."Pelabuhan"Klang"Utara,"
6"JOHANN"FREIGHT"SDN"BHD" www.johannfreight.com"
Klang,"Selangor"
Batu"9,"Jalan"Klang"Lama,""
7"KONTENA"NASIONAL"BERHAD" Seri"Sea"46000" www.kn.com.my"
Petaling"Jaya"

Zalina Idris, Capacity Development Division, HDC, Oct 2012


STANDARDS


STORAGE
•  Non halal product / raw material
should not be in the storage area
•  The surrounding of storage must
be clean and free from any
contamination
•  Storage for wet and dry raw
ingredients should be separated,
well arranged and systematic

DISTRIBUTION & LOGISTICS
•  Transportation and warehouse are
assigned for halal products only
•  Suitable temperature based on
the product characteristics


MALAYSIA HALAL LOGISTICS STANDARDS

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


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

! MS 2400-2:2010 (P) Halalan-Toyyiban Assurance
for Warehousing and Related Activities

! MS 2400-3:2010(P) Halalan-Toyyiban Assurance
for Retailing


The International Halal Logistics
Standard

IHIAS 0100:2010


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

•  The Halal products have a dedicated storage zone (floor
storage) or racks, which are clearly separated by colour and/
or marking

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


Halal Transportation
•  The transport is cleaned before use according to existing hygiene standard
and according to ritual cleansing in case of an earlier non-Halal or unknown
shipment (history of one shipment before this only),

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

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

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


Halal Compliant Terminal
•  The organisation shall ensure that there is a physical segregation of Halal
cargo from non Halal cargo throughout
the Terminal processes.


GOVERNMENT INITIATIVES


Through one of the Government’s plan for the
development of the industry in IMP3, the
objective has incurred Malaysia as the global
Halal hub for production and trade
merchandize and Halal services such as
logistics.


PRIVATE
INITIATIVES


INTERVIEW VIDEO


The Halal SuperHighway

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


The Halal SuperHighway
Trade and Logistics
Solutions

Supply Chain Integrity
Chain of custody

Halal compliance
Halal certification
& standards

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


The Objectives
1.  The Halal SuperHighway provides a command & control centre to
facilitate authentication of Halal in a supply chain, providing market
access and a cost advantage for the Halal industry.

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

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

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

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


! H alalStorage.com, a LBB International
initiative, was launched in 2008.
! Halalstorage.com is an online market place for
the demand and supply in Halal storage. It
facilitates in the search process for Halal
storage worldwide
! HalalStorage.com envisions to increase the
availability of Halal storage facilities world-
wide in order to better facilitate global Halal
trade and to reduce the costs of Halal Logistics

The Objective

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


The Process
1
Register available Halal storage facilities

Contracting
3
System matching
2a

2b
Direct facilitation


Halal Logistics
- 5 Continents


GLOBAL MARKET: POTENTIAL


•  World Muslim population of 1.98 billion in 2011 out of 7.0 billion World population.

• With average annual growth rate of about 1.84% per annum.

• Approximately 117,000,000 per yr. increase which does not include conversion
which onUiTM Shah currently.
GBI 795 –
the rise Alam

HALAL MARKET

Food &
Beverage
Pharmaceutical

Cosmetics &
Personal Care

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


REGIONAL HALAL MARKET VALUE

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

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


The Americas

•  Muslims account for 0.6% of the population of the Americas, numbering 5.3
million. The Muslim population in Canada and the United States is expected
to grow, presenting new opportunities in the halal food markets of North
America.
•  The largest Muslim population in South America resides in Argentina,
numbering 1 million.
•  The population of Muslims in the Americas is small compared to that of the
Middle East; so many Muslims do not have convenient access to halal
foods. As such, this market shows strong potential for growth, as Muslim
consumers in the Americas continue to demand halal products. Canada’s
close relations with the US and Latin America would contribute to its
success in exporting halal products to these regions.
•  Several US companies have recognized this opportunity, and have become
significant exporters of halal products; companies such as Cargill, ConAgra,
Tyson, and Oscar Mayer have halal product lines.

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


Africa

"  South Africa, also known as the “rainbow nation” due to its diverse
population, has also been actively hosting events focussing on Halal as a
viable business concept.

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


Potential Markets for Canadian
Exporters

Canada has long-standing trade relations with several key halal markets.
Canada’s top export market in the Middle East, the United Arab Emirates, is
one such partner.

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


Potential Markets for Canadian
Exporters

Poultry exports to Pakistan have increased 341% since 2005, and have
seen a steady increase between 2008 and 2010. As Canadian exporters
have already entered the poultry industry in Pakistan.

there are several opportunities to export other meats and products that
adhere to halal requirements. Canadian exporters have already entered
the beef and veal markets of both Indonesia and Egypt.

Two of Canada’s largest halal export markets in this category. This
foothold will allow exporters to offer a wider range of products to
consumers in these countries, including halal poultry and other halal
products.


HALAL IN AMERICA
Certifying Organization: Islamic Food and Nutrition Council of America
IFANCA halal certification is recognized by:

!  United States Department of Agriculture (USDA)
!  Majlis Ugama Islam Singapura (MUIS) (Singapore)
!  Jabatan Kemajuan Islam Malaysia (JAKIM)
!  Muslim World League (MWL) (Saudi Arabia)
!  Majelis Ulama Indonesia (MUI)
!  Islamic Committee Office of Thailand
!  Philippine Halal Association
!  United Arab Emirates (UAE) Municipalities


HALAL IN EUROPE

•  Halal is no longer a taboo in Europe as awareness about
halal products and certification has notably increased
over the last couple of years.
•  Advertising, certification and labels are also on the rise in
Europe, particularly in France with estimated 5 million
Muslim population. (Tieman, M, 2010, http://www.logasiamag.com/article/halal-logistics/1744)
•  The European Supermarkets are now aggressively
pursuing the Halal food retailing. The Global Market Potential of Halal, International
Conference & Expo on Halal Industry , Lahore, Pakistan , 2010

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


Europe - The Port of Marseille
•  The Port of Marseille- with the strong support of the Malaysian government, is
actively developing this Halal Logistic sector.

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

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

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

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

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

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

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


Opportunities for Malaysia in
Europe
•  There remains a need to harmonize the halal standards in Europe, to
simplify halal for the consumer and meet the diverse needs of the European
consumers.

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

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

•  Help Malaysian Enterpreneurs to enter the market


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

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

BELGIUM


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

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

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

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

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


Australia

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

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

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


Implementation of
Halal Logistics
- Push Factor


GCC COUNTRIES

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

!  Among the highest economy and GDP of OIC members
countries

Source : Wikipedia

Source : Wikipedia

Darhim Dali Hashim, CEO IHI, Malaysia, 2011


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

GCC COULD FORCE
BRAZIL TO FULLFILL
THE HALAL LOGISTICS
STANDARD


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


THANK YOU


Halal logistics in malaysia and 5 continents

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