Halal products export receives boost with new policy, but more is required

For the first time, the Bangladesh government has introduced a policy on halal certification to facilitate the local production and marketing of shariah-compliant food items, pharmaceuticals and cosmetics. This opens the door for Bangladesh to grab a piece of the huge global halal market.

Although it was approved last week, the Bangladesh Islamic Foundation (BIF) crafted this policy in 2015, aiming to empower local producers to meet the growing global demand for halal products. 

Given Bangladesh's status as a Muslim-majority country, there exists immense potential for securing a substantial share in the growing global halal market. To harness this potential effectively, it becomes imperative to prioritise product quality, adhere to stringent hygiene standards in the processing, and maintain overall compliance with established criteria.

Islamic Foundation Bangladesh has granted certificates to approximately 179 companies since 2007. To further enhance and incentivize the acquisition of halal status by companies, simplifying this certification obtaining process will not only expedite compliance but also encourage more businesses to participate in the halal market.

"This policy will be a crucial guideline for halal certification. Its implementation is expected to incentivise numerous companies to align with international standards, opening up broader access to the global halal market," said Md Abu Saleh Patwary, the Deputy Director for Halal Certification at BIF operating under the Ministry of Religious Affairs.

Over the years, the Islamic Foundation has granted certificates to approximately 179 companies since 2007, with more than 100 of them specialising in the production and marketing of halal food products. These companies have around 1,800 halal brand products. With the government's formal endorsement through this new policy, Patwary expressed his optimism about expanding the reach of halal products.

Prominent companies such as Square, Pran, ACI, Bengal Meat and Bashundhara, along with multinational giants like Nestle Bangladesh, have already secured licences from the Islamic Foundation. 

"We already comply with halal food standards. However, the introduction of this policy will surely have a positive impact by providing a clear framework," said Imtiaz Firoze, the Head of Marketing at Square Food & Beverage Limited. 

Under the policy, the Islamic Foundation can now issue certificates and the official halal logo to companies on behalf of the government. The certification, initially granted for a one-year tenure, holds the potential for an extension of two to three years, contingent upon the adherence to stringent standards by the factories involved. 

'Bangladesh has huge potential to export halal products'

Among the certified companies, 62 are actively exporting more than 200 halal products to diverse countries. Patwary emphasises the significant growth potential, citing the global market for halal items that is valued at over $3 trillion, with projections to reach $7 trillion by 2025.

Bangladesh, an OIC member, exported Halal products amounting to $843.03 million in the fiscal year 2022-23, primarily to Muslim nations. While precise data on Bangladesh's halal market size is currently unavailable, Patwary estimates its worth to be in the several thousand crores of taka.

A senior secretary of the Ministry of Commerce said that Bangladesh has huge potential to export halal products and increase revenue. 

"The volume of our halal food market export is $1.2 billion. This policy added a new dimension to the market and we hope to take significant market share, especially in Muslim countries where the halal market is larger," he said. 

According to the State of the Global Islamic Economy Report 2022, the global halal market, encompassing food, pharmaceuticals, cosmetics and more, is valued at over $2 trillion and is expected to reach $2.8 trillion soon. 

Factors contributing to this growth include the anticipated rise in the global Muslim population which is projected to reach 3 billion by 2060, and increased awareness of the benefits of halal products, attracting demand from both Muslim and non-Muslim consumers. 

Geographically, the Asia Pacific holds a dominant position, comprising over 60% of the global market share, followed by the Middle East and Africa at over 25%. Europe has a Compound Annual Growth Rate (CAGR) exceeding 10%, and North America has surpassed 5%, signifying the growing market for halal products.

The report further notes that imports of halal products to OIC (Organisation of Islamic Cooperation) markets are expected to grow from $279 billion in 2020 to $336 billion by 2025. This underscores the promising opportunities for businesses engaged in the production, distribution and sale of halal food products.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Islamic Organisation for Food Security (IOFS) have joined forces to enhance Bangladesh's access to the global halal market. During a meeting held at the FBCCI Icon in Dhaka on 21 August, both organisations outlined their collaborative plans to improve the availability and market reach of halal products.

Certification process should be hassle-free

To facilitate and encourage companies to obtain halal status, the procedure should be more streamlined for companies seeking certification.

"We are introducing an online application system for companies," mentioned Patwary. "The process then will follow a factory visit, sample testing followed by the final certification decision by a 12-member committee. This entire process is expected to take approximately two months." 

Furthermore, the BIF has outlined a structured fee system for halal certification and the use of the official halal logo which varies based on the size and scale of factories and slaughterhouses. Small factories with investments ranging from Tk1-5 crore will be required to pay Tk5,000 as a certification fee. This fee doubles for factories with investments between Tk5 crore to Tk50 crore, while larger plants with investments exceeding Tk50 crore will be subject to a fee of about Tk20,000.

Slaughterhouses, categorised by their processing capacity, will have certification fees ranging from Tk5,000 to Tk20,000. The policy also extends to local hotels and restaurants, where halal certification fees are capped at Tk2,000. This fee structure is designed to be inclusive, catering to businesses of various sizes and capacities.

Quality matters

When it comes to the global market, product quality matters more than anything. With the implementation of the new policy, the BIF will subject products to increased scrutiny for halal certification and maintenance. Under this policy, authorities will conduct unannounced inspections or verifications to ensure that products labelled as halal adhere to relevant regulations. 

Notably, inspections will extend to crucial imported ingredients, such as colour and flavour, used in various products to ascertain their halal status. 

"No raw materials, ingredients, or additives can be used to make and market foods or consumer goods, cosmetics, and pharmaceuticals that are not halal under shariah," said Patwary. 

The policy mandates adherence to good manufacturing practices and standard sanitation operating procedures in the production of goods. Furthermore, the BIF plans to organise training sessions for company employees to uphold quality standards. 

"We will train people from the industry so that the quality is maintained and no halal food items are produced, processed, packaged, stored or transported along with items prohibited by Islamic law," Patwary further stated.

The halal standard is not limited to food items; it also applies to cosmetics. The policy prohibits the use of prohibited animals in cosmetics production and insists on excluding harmful ingredients. 

"As a Muslim country, our food system is focused on halal products. However, in this case, the certificate, which is provided in compliance with standards, gives more assurance to consumers," Md Parvez Saiful Islam, chief executive officer (CEO) of Square Food and Beverages.

"All Square products are exported abroad. Halal certification plays a key role in the growing global demand for food," he added.

According to AFM Asif, CEO of Bengal Meat, the halal brand combines food safety with nutrition at no harm to the body, thus uniting Islamic culture and science.

Halal food manufacturers say they put more importance on exports than business growth in the country's market since there is a good demand for halal food in different countries. 

Dr Md Monirul Islam, Principal Scientific Officer at the Bangladesh Agricultural Research Institute (BARI), stressed the importance of quality for exports. He noted the increasing demand for halal products not only in Muslim countries but also in Europe and North America, underscoring the necessity to produce quality halal products swiftly to expand market share.

Issues to address 

There are several issues that have to be addressed if we want to maximise the potential of our halal market.

Our livestock sector faces challenges such as insufficient vaccine supply, a need for improved breeds and a shortage of field-level staff. The absence of cattle disease diagnostic centres and inadequate financing add to the issues. Besides, local manufacturers must be aware of the standard of halal items. 

"Our beef is in the red zone when it comes to the halal market because we don't vaccinate our livestock properly," said Patwary. "There are abattoir or poultry processing plants which process chicken that are not vaccinated."

We also have to maintain our image in the international market.  

"We have seen jelly-like substances injected into shrimps. We have also seen many inferior products being rejected from the international market. We have to control such incidents, otherwise, consumers will not believe in our halal products."

If the market grows, so must our infrastructure. We need more equipped labs. "Apart from adding more labs, we need collaboration with other existing labs. We are in the process of revamping our lab's capacities," said Patwary. 

However, Patwary also indicated that the commerce ministry should help find different markets for local products based on demand. 

"If you look at India, they found a market in Europe even for their papad snacks. If we just produce halal products and don't have a market to export to, the whole effort will be of no use."