MCH Halal International Holdings Ltd – Exporting Chinese halal food to Malaysia

China’s halal food trade shows promise, thanks to the country’s plan to expand links with countries along the Belt and Road.

Much of the attention on China’s Belt and Road Initiative, which envisions linking 65 nations from Southeast Asia, Africa and Europe, has focused on infrastructure opportunities. But business prospects arising from China’s economic development plan extend beyond infrastructure and finance.

At an August seminar organised by the Hong Kong Trade Development Council (HKTDC), the focus centred on developing the nascent but lucrative halal food industry to cater to the large Muslim population along the Belt and Road regions.

The global halal food market was worth US$500 billion in 2014, according to seminar speaker, Wang Guoliang, Deputy Secretary General of the China Islamic Association. He said companies should consider not just the Western European market, but also the emerging Southeast Asia market, where the majority of Muslims live.

“Eighty per cent of halal foods consumed are imported,” said Mr Wong. “The halal sector is expected to double to US$6.4 trillion in 2018, from US$3.2 trillion in 2014.” He said the three largest halal consumer markets are in the Middle East, Southeast Asia and Europe.

Strong European Following

An Arabic word meaning “lawful” or “permitted”, halal is used to describe goods or actions that are in keeping with Sharia law and Islamic principles. While many traders are aware that pork and alcohol are diet restrictions, halal calls for animals to be killed just before processing and using special slaughtering conditions. Blood by-products are also forbidden.

Such strict quality control has given halal foods a wide following in Europe. Mr Wang, noted that about 500 million non-Muslims consume halal foods, representing a large untapped market for Chinese food suppliers.

Halal Certification

Chinese companies currently export less than one per cent of halal food supplies annually. Among the new entrants is Hong Kong-based financial group, Mega Capital International Holdings Ltd, which established a halal food division in June 2014 to connect Chinese manufacturers with Jakim, Malaysia’s Department of Islamic Development responsible for issuing halal certifications.

“Jakim has two main criteria,” said Carson Kwong, President of the company’s halal food subsidiary, MCH Halal International Holdings Ltd. “First, it’s to make sure production flows smoothly and is hygienic. Then, it’s the religious component – that the food is properly prepared according to Islamic principles.”

Standards Pioneer

Recognised by the United Nations and in 57 countries, the Jakim certification can help operators build an extensive distribution network across Asia, the Middle East and North Africa, according to Rusli Mohd Nor, Chief Advisor of Jabatan Kemajuan Islam Malaysia.

“Malaysia is the first in the world to introduce halal food standards,” said Mr Nor. “We are keen to serve as a stepping stone for Chinese halal exports targeting the Belt and Road region.” Mr Nor noted that halal logistics involves managing the supply chain, from transportation to storage and handling, to ensure adherence to Islamic principles, with the goal of safeguarding the integrity and purity of halal products.

While Jakim officials periodically conduct on-site inspections, Mr Kwong said his company pays close attention to factories without ISO9000 certification. The company’s halal food division has already received about 100 applications since starting operations in June 2014.

“Many Chinese SMEs are waking up to the lucrative opportunities in Southeast Asia,” said Mr Kwong. “Events such as the HKTDC seminar encourage them to think out of the box by targeting untapped markets.” He said the seminar generated plenty of discussion, which he welcomed as the halal food business remains an untapped niche in Hong Kong. Eligible applicants, he said, can become halal-certified in about two months, with two years’ validity.

Mr Kwong underscored Hong Kong’s position in helping mainland companies go global. “Free access to information is our biggest advantage,” he said. “We can access Jakim’s big data on halal trade, which is important for our upcoming online trading platform. It provides an alternative channel for Chinese manufacturers to connect with international buyers.”

The company will set up customer services centres in Shenzhen and Guangzhou, and seek funding support from mainland provincial governments to market Chinese-made halal products to the world.