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Halal Industry
Russo-Ukrainian war triggers food insecurity in the Arab region

Global agricultural trade is particularly affected given Russia and Ukraine hold the keys to world staples wheat and sunflower oil.

 

The Russo-Ukrainian War is profoundly impacting on global politics, economic growth and specifically agricultural trade, triggering concerns in the Arab region struggling to secure sufficient cereal imports for its citizens.

Russia and Ukraine are key food bowls globally, most notably for the Arab region where insufficient land and water resources do not permit cereal self-sufficiency. While the widely used policy by Arab governments to import cereals has worked for decades, it is now enduring its potentially worst stress test.

The pressure will exceed that caused by the food price spikes of 2007/08 and 2010/11 and following the COVID-19 pandemic. Holistically the Arab region receives 40-50% of its wheat imports from the two warring nations and is thus vulnerable to the secondary effects on food security.

Background – Arab countries are among the world’s most vulnerable to cereal availability and price fluctuations

Arab countries are among the most vulnerable countries to cereal availability and price fluctuations. Driven by robust demand and supply shortfalls in some producer regions, the Food and Agricultural Organisation of the United Nations (FAO UN) Food Price Index has continuously grown since the second-half of 2020 and reached an all-time high in February 2022. This was before the Russian invasion of Ukraine.

In the wake of the Russian attack on Ukraine on 24 February 2022, grain prices on the futures markets spiked to an all-time high in the FAO Food Price Index’s (FAO, 2022) history.

The invasion can affect grain prices in three ways – crop losses (especially in Ukraine); logistical problems as most exports travel through western Black Sea ports including Odessa and trade financing and payment processing problems due to sanctions.

Since Russia is also a major fertiliser exporter such as potash, nitrogen, phosphate and ammonia, that collapse will affect the cereal production in other countries. Russia and Ukraine account for 29% of global wheat exports, 31% of barley, 19% of corn, 23% of rapeseed/canola and a staggering 78% of sunflower oil – and the Arab region will bear a disproportionate burden of the crisis.

Given its structural weaknesses related to land and water availability, it disproportionately relies on staple food commodity imports with wheat particularly important for human calorie intake and barley as animal feedstock.

 

 

FAO Food Price Index February 2022

 

Wheat – a critical element to Arab daily consumption

According to the UN Economic and Social Commission for Western Asia 2015 (UNESCWA), wheat provides between 24 and 49% of Arab consumers’ daily calories, predominantly via bread. This makes wheat the single most important crop in the Arab region for food and nutrition security.

Lebanon and Egypt are particularly exposed to developments in the Black Sea. In 2020 the two warring nations accounted for 96% of wheat imports to Lebanon and 86% to Egypt.

Other highly import-reliant countries are Mauritania, Oman, Yemen, Tunisia, Libya and the United Arab Emirates. Although there has been a small decline in imports from Ukraine and Russia and more trade diversification since 2018, the Arab region is disproportionately dependent on the Black Sea for wheat.

 

Arab reliance on wheat imports from Russia and Ukraine from 2015 to 2020 (FAO statistics 2022). No updated data available for Qatar, Somalia, Sudan, Iraq and Palestine.

 

Barley – feeding the animals

Predominantly used as animal feed, barley is another important commodity sourced from Russia and Ukraine. Again, about half of the barley requirements are imported from the Black Sea with Egypt, Jordan, Lebanon, Libya, Syria, Saudi Arabia and Tunisia being the most dependent countries as their barley imports are not diversified.

Any long-term disruption of trade relations could significantly limit the availability of barley. The same applies to the price of meat and dairy products as they depend on animal feed such as barley or maize.

 

Arab reliance on barley imports from Russia and Ukraine between 2015 and 2020 (FAO statistics 2022). No data available for Somalia, Sudan, Iraq, Qatar and Palestine.

 

The short-term, medium-term and long-term consequences

The timing poses significant challenges to Arab region governments, private sector players and consumers. Cereal harvests in Arab countries will not start before the middle of the second quarter, while in Europe and North America wheat is sown in autumn and harvested in July. This leaves little room for major production expansions in 2022 (Abay et al., 2022).

The most significant consequences will appear in the short-term future impacting on Ramadan in the most economically vulnerable countries when food consumption is generally higher than normal. The most vulnerable countries are Somalia, Iraq, Lebanon, Palestine, Libya and Yemen that have little or no access to hard currencies to cover the costs of expensive emergency wheat imports.

Consequently, wheat rationing and the increased use of available storage might be inevitable. Arab countries differ according to their storage. While Lebanon has about one month of wheat storage available, Egypt has wheat for four months and last year Saudi Arabia increased its storage facilities by 37% (Schroeder, 2021; Walsh, 2022).

Since agricultural commodity markets are uncertain, market transparency and policy dialogue must be strengthened to ensure international markets function properly and trade in food and agricultural products flows smoothly.

Market control and monitoring mechanisms must be improved to control storage and monitor availability. Many Arab countries partially control wheat prices to shield domestic food prices from movements in global markets.

However, the capacity of these countries to insulate against a major shock was displayed during the 2008/2009 food price spikes when every country in the region, except Morocco and Syria, experienced food inflation of over 20% (FAO, 2020).

To maintain stable bread prices, especially for vulnerable groups, Arab governments must strengthen social safety nets, possibly assisted by emergency loans from international financial institutions.

In the medium-term, countries must carefully weigh their existing measures against the potentially detrimental effect on international markets. Alternative wheat and barley sources must be identified – including North and South America, Australia and India. The latter has already announced it can increase its wheat production by 2023 to mitigate some of the global shortage (Times of India, 2022). Yet procuring wheat from more distant regions comes with increased prices given boosted transportation costs.

The Black Sea crisis similarly affects oil and gas prices ultimately leading to increased shipping and fertiliser costs. Emergency loans and budgetary support for food subsidies must continue to mitigate the effect on the Arab region’s poor, but might face challenges of fiscal sustainability.

Expectations are for the wheat market crisis to last until 2023 (Abay et al., 2022). Hence, long-term effects will further cripple Arab countries. Limited mitigation and diversification opportunities might exist through dietary changes towards rice and other traditional starchy crops such as durum wheat, aestivum and sorghum that can be grown under marginal conditions in the water-scarce region.

Durum wheat and aestivum are either dried or smoked to become bhurgul and freekeh that are an ancient tradition especially in the Maghreb and Mashreq countries (Ohr, 2014; Toufeili et al., 1997). Good yields can be expected with supplementary irrigation.

However, traditional starchy crops will only contribute to food security; not provide self-sufficiency. Eventually, global markets will stabilise once farmers react to price signals and shift to wheat production.

This will further stabilise global grain markets. However, Arab governments might have to diversify trading partners, but this will come at a price. Russian and Ukrainian wheat typically trade at a discount compared to higher quality wheat from other regions; hence alternative supplies will be more expensive notwithstanding the higher transport costs.

 

Read - Russian invasion of Ukraine disrupts food trade for halal market countries

Read - Ukraine conflict: OIC countries face the spectre of hunger

 

References

Abay, K., Abdelfattah, L., Breisinger, C., Glauber, J., Laborde, D., 2022. The Russia-Ukraine crisis poses a serious food security threat to Egypt. IFPRI Blog. URL https://www.ifpri.org/blog/russia-ukraine-crisis-poses-serious-food-security-threat-egypt (accessed 3.15.22).

Ohr, L.M., 2014. Good Things Come in Small Sizes. FOOD Technol. 68, 57-+.

Schroeder, E., 2021. Saudi Arabia adds wheat storage. World Grain.

Times of India, 2022. Putin’s war may help boost India’s wheat and maize exports: report.

Toufeili, I., Olabi, A., Shadarevian, S., Antoun, M.A., Zurayk, R., Baalbaki, I., 1997. Relationships of selected wheat parameters to burghul-making quality. J. Food Qual. 20, 211–224. https://doi.org/10.1111/j.1745-4557.1997.tb00465.x

UNESCWA, UNESCWA, 2015. Pathways toward food security in the Arab region: an assessment of wheat availability. UNESCWA, Beirut.

Walsh, A., 2022. A new Arab Spring, thanks to the Ukraine war? Dtsch. Welle.



Dr Martin Keulertz is an assistant professor in the Food Security Programme as the American University of Beirut, Lebanon. His research interests centre on strategies for food and water security in the Middle East and North Africa (MENA) region and how a rapidly growing region can address its future food requirements through sustainable and adapted domestic production, food technology innovation and agricultural trade.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
The Gulf’s battle against food waste

Managing food waste remains a critical challenge in the Gulf Cooperation Council (GCC) countries.

 

Nearly 17% of the food available to consumers in 2019 – an amount nudging 1,000 million tonnes – ended up in the rubbish bins of households, retailers, restaurants and other food services, reveals United Nations (UN) research conducted to support global efforts to halve food waste by 2030.

 

In high-income countries like the GCC, food is mainly wasted at the consumer level. It typically ends up in landfills where the decomposition process emits methane gas 25 times more damaging than carbon dioxide.

Studies highlight that wastage increases on social and religious occasions such as the holy month of Ramadan. However, various local organisations offer solutions for businesses and private households to reduce food waste; help the needy and generate alternative energy.

“Putting a serious dent in food loss and waste will slow climate change, protect nature and increase food security – at a time when we desperately need these things to happen,” said Inger Andersen, Executive Director of the United Nations Environment Programme (UNEP), adding these issues account for up to 10% of greenhouse gas emissions.

The UNEP Food Waste Index Report, published in March 2021, exposes western Asia, including the GCC, with 110kg per capita annually as the region with the highest average household food waste. Following on its heels is sub-Saharan Africa with 108kg and then southern Europe with 90kg.

Dubai – household food waste is 95kg per person each year

The Food Waste Index reveals the United Arab Emirates (UAE) estimated household food waste amounts to over 923,000 tonnes per year or 95kgs per capita per year. According to Dubai Carbon, roughly 38% of the food prepared daily in the Emirate is wasted. This jumps to around 60% during Ramadan.

In 2013 the Dubai Municipality’s Waste Management Department launched an integrated waste management master plan, aiming at slashing the amount of waste sent to landfills by 75% by 2021 and 98% by 2030.

Although Dubai achieved a total waste diversion rate of 31.8% in 2018 versus the 25% target, the domestic waste reduction rate disappoints. According to Dubai Municipality Statistics 2018-2020, published in February 2022, the percentage of domestic waste that went to landfills grew from a 62.7% share of total waste in 2019 to 77.8% in 2020.

Equally, while the composting rate increased from 0.35% to 1.035% during the same period, the recycling efforts dropped from 36.9% share to 21.1%.

However, food waste disposal technology is available to Dubai households and businesses, helping them to turn food waste into biogas and soil nutrients. Emerson, an American multinational Fortune 500 company serving the industrial, commercial and consumer markets, has regionally distributed the InSinkErator® brand since the firm opened its Dubai office in 2010.

“The food waste gets ground and shredded into small particles. Then it goes through the sewer system to the wastewater treatment plant,” Mohamed Karam said, explaining the InSinkErator concept using centrifugal force.

Karam is Senior Business Development Manager Middle East and Africa at InSinkErator®.

“Over the twelve years, we managed to increase our business between 8% to 12% on average almost every year. By helping to have a clean house, we increase hygiene. Moreover, we reduce the household’s carbon footprint as the waste doesn’t need to be stored or transported,” he told Salaam Gateway.

Taking the waste issue to the next level, Dubai’s Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum approved the Integrated Waste Management Strategy 2021-2041 at the beginning of this year. Its AED74.5 billion ($20.2 billion) budget covers waste management, recycling and energy conversion projects.

Sheikh Hamdan highlighted the private sector’s role as a critical strategic partner in Dubai’s efforts to become a sustainable city, noting the sector’s direct contribution amounts to 94.6% of the budget.

 

 

Qatar – high consumption and low recycling translates into excess food wastage

The Food Waste Index indicated Qatar’s annual estimated household food wastage exceeds 267,000 tonnes given the country’s high consumption and low recycling rate. This translates to 95kg per capita.

Qatar-based sustainability advocacy group EcoMENA estimates leftover food makes up about half of the waste sitting in Qatar’s landfills. Moreover, only a minimal portion of this discarded food is composted, despite the short supply of good soil.

EcoMENA’s research shows people throw away up to 25% of all food prepared during Ramadan.

In Qatar charitable enterprises like Wahab play a vital role in humanitarian activities to preserve food and reduce waste. The non-profit organisation collects food leftovers from hotels, supermarkets and restaurants to deliver to the needy.

Sport related events have also been a focus with Wahab’s EcoProbe, a 24-hour composting machine, operating at the 72nd FIFA Congress and Final Draw at the Doha Exhibition and Convention Centre (DECC) on 1 April.

In a LinkedIn post, Wahab’s founder and social entrepreneur Wardha Mamukoya said organic waste and compostable products from the event were successfully processed, proving seamless food waste management is possible, even in urban settings.

Moreover, Wahab redistributed over three tonnes of surplus food after the MotoGP event at the Lusail Circuit Sports Club held in March. Instead of being thrown into landfills, the charity collected fruit, vegetables and other food items and shared them with the community.

While Islamic teachings prohibit wastage in every life aspect, Andrea Cattaneo, a senior economist at the UN Food and Agriculture Organisation, highlights three dimensions in which countries benefit from food waste reduction.

According to Cattaneo, economics improve as the reduction in losses increases business productivity, food security advances and the environment recovers as resources aren’t used to no end.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Newswrap: Halal industry

PIF to invest $320 million in Saudi Coffee Company; India bans wheat exports; EBRD to bolster food storage capacities and developed food security plans in the MENA; Nigeria’s BUA Foods buys new ships to bolster sugar exports; Pakistan-Turkey-Kazakhstan biotech forum to be held.

 

PIF to invest $320 million in Saudi Coffee Company

The Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, has launched the Saudi Coffee Company, intending to invest SAR1.2 billion ($320 million) over the next decade, reported the Saudi Press Agency (SPA). The aim is to bolster production from 300 tonnes per year to 2,500 tonnes, and develop the whole value chain “from bean to cup”. Coffee consumption in the kingdom grew by 4% a year between 2016-2021 and is forecast to rise by 5% a year to 2026, to 28,700 tonnes, according to data cited by the SPA. In the three mountainous regions of Jazan, Al Baha, and Aseer there are more than 2,500 coffee plantations with a combined total of around 400,000 coffee trees.

India bans wheat exports

India, the world’s second largest wheat producer after China, has banned wheat exports following a severe heat wave that damaged crops. Following the Russian invasion of Ukraine in February, New Delhi pledged to export 10 million tonnes of wheat this year, but this has been put on hold, with the harvest expected to drop from 111 million tonnes to less than 100 million tonnes, Nasdaq reported. Whiel wheat prices have surged by around 60% this year, the World Bank is forecasting that wheat prices will reach a record $450 per tonne this year, a 42% rise on 2021. India will continue to export to countries with letters of credit already issued "to meet their food security needs,” reported Reuters. Egypt confirmed on Sunday that it will still be able to buy half a million tonnes of wheat from India.

EBRD to bolster food storage capacities and developed food security plans in the Middle East and North Africa

The European Bank for Reconstruction and Development (EBRD) is discussing ways to boost food storage capacity and to diversify food suppliers in Morocco, Tunisia and Egypt, Reuters reported.

The talks come in the wake of spiking food prices in the wake of the pandemic and the disruption to food exports from Ukraine. "We are in early discussions on what is needed on capital investment to boost storage facilities," EBRD Southern and Eastern Mediterranean Managing Director Heike Hargmart told Reuters. Additionally, the bank is involved with the World Bank to develop a regional food security mechanism plan for Egypt, Lebanon and Jordan. Iraq is in the process of becoming a EBRD member, while eight Sub-Saharan African countries are expected to join, Hargmart told Reuters.

Nigeria’s BUA Foods buys new ships to bolster sugar exports

Nigeria’s BUA Foods, a food group with operations in sugar, flour, pasta, rice and edible oil,has acquired two new ships to boost operations in West Africa, reported This Day. Nigeria’s sugar market is forecast by 3.5% CAGR between 2022-2027, according to Expert Market Research.

Refined sugar is processed at BUA Foods’ refinery in Port Hartcourt, with a capacity of 750,000 tonnes. In December, BUA’s five food businesses - Sugar Refinery Limited, BUA Rice Limited, BUA Oil Mills Limited, IRS Flour and IRS Pasta – were merged into BUA Foods. “We see an increased and continued demand for refined sugar across the region with attendant increase for logistics support to aid timely delivery, which is why it is important for us to strengthen our current capability with our own controlled asset as we advance further in our business strategy. These new vessels will create operational efficiencies in our business and open possibilities for new services,” said Alhaji Abdul Samad Rabi, Chairman, BUA Foods.

Pakistan-Turkey-Kazakhstan biotech forum to be held

A three day `Pakistan-Turkey-Kazakhstan Youth Forum on Biotechnology’ will be held in September to discuss ways to bolster the share of Muslim countries in the biotech space, APP reported. The event is sponsored by COMSTECH-the OIC Standing Committee for Scientific and Technological Cooperation, Islamic Organization for Food Security (IOFS) and the Islamic Cooperation Youth Forum (ICYF) under the theme “Agriculture Biotechnology”. Applicants can register online.

Halal Industry
UAE companies raise the bar for corporate giving during Ramadan

Ramadan 2022 sparked a tidal wave of charitable initiatives among Emirati businesses with far-reaching impacts destined to affect lives well beyond the holy month.

 

Dubai: From retailers and schools to tech companies and food delivery providers, the UAE’s private sector has rolled out some of its most creative corporate social responsibility (CSR) campaigns during Ramadan to encourage people to give back during the holy month.

While UAE residents are allowed to give free iftar meals to small groups with whom they have a close association during Ramadan, they are not allowed to organise or run donation campaigns unless licensed to do so by the government.

Consequently, local companies and institutions authorised to carry out charitable campaigns innovated ways to facilitate various donations.

 

E-tips launched 'Tip the Chef' campaign during Ramadan (Courtesy: E-tips).

 

Cashless tipping, digital charity

One of the most novel CSR campaigns gave customers the opportunity to digitally tip chefs, kitchen staff and delivery drivers. The Tip the Chef campaign was launched by digital tipping and review platform E-tips in partnership with virtual food brand company The Cloud.

“During Ramadan our campaign generated more than AED 8,000 ($2,160) and we have a total of 130 restaurants on board, if we count the cloud kitchens,” Michael Lvov, CEO and co-founder of E-tips and a social impact investor, told Salaam Gateway.

The campaign covered delivery-only restaurants. However, E-tips is being used by more than 200 dine-in restaurants and companies in the beauty, spa and automotive industries with the company stating hospitality vendors could increase their staff tips up to 30% via the platform.

 

Michael Lvov, CEO and cofounder of E-tips and a social impact investor (Courtesy of Lvov).

With food being a major focus during Ramadan, Middle East North Africa (MENA) food delivery giant Talabat again used its platform to connect customers with charity organisations. Through the app’s Give Back option, customers could donate directly to the World Food Programme, Dubai’s 1 Billion Meals campaign or Talabat Ramadan Heroes campaign, launched for the third consecutive year to support local beneficiaries in the UAE.

Alternatively, they could donate by redeeming their reward points towards their cause of choice; either supporting a school meal project in the Middle East by Dubai Cares or helping refugees with basic food supplies through the United Nations High Commissioner for Refugees.

“Philanthropy has always been deeply embedded in the UAE’s culture, reflected in our customers’ spirit of giving and generosity,” Tatiana Rahal, managing director at Talabat UAE, said in a statement. “We’re proud to leverage our platform for good once again this Ramadan and I’m looking forward to seeing the impact we can collectively create in the Emirates and beyond.”

In the first week of Ramadan Talabat raised more than AED 500,000 ($135,000) in customer in-app donations – and, like E-tips, Talabat encouraged customers to use its cashless tipping feature that enabled AED 1.7 million ($459,000) in tips in the UAE during Ramadan 2021.

Last year the food delivery platform added a feature update to give riders instant and full visibility on customer tips that added up in their rider app wallets.

 

Talabat customers could use the app to donate to its ‘Ramadan Heroes’ campaign (Courtesy: Talabat).

Sector-wide participation

Ramadan also witnessed the region’s biggest food donation drive. Launched by Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and Ruler of Dubai, the 1 Billion Meals campaign saw phenomenal participation from the private and public sectors.

By the end of Ramadan, the campaign had collected 600 million meals donated by 320,000 individuals, entities, businessmen and companies including hospitals, financial institutions, hospitality groups, real estate developers, schools, universities and small and medium enterprises (SMEs).

The remaining 400 million meals will be provided by Sheikh Mohammed through a personal donation to feed people in need across 50 countries.

Dubai-based Swiss International Scientific School, one of the institutions that contributed to the initiative, raised AED 20,000 ($5,400) towards the campaign through various student-led events. Beating its original AED 10,000 ($2,700) target, the school of 1,450 pupils held a ticketed community iftar event and “Dress to Express Day” where students and parents attended in outfits that best expressed their personalities and donated AED 10 ($2.70) per child.

“Our pupils are acutely aware of their privilege and it’s humbling to see so much money raised to help alleviate global hunger, especially during this special holy month,” said Ruth Burke, principal and CEO at Swiss International Scientific School.

The school also encouraged parents to donate through its page on YallaGive, a UAE-based online fundraising platform. Additionally, it distributed 145 care packages to its staff, all funded by donations received from the school community during Ramadan.

Environmental sustainability with a cause

However, food was not the only focus of this year’s Ramadan campaigns. One initiative sought to empower UAE residents to contribute to vital medical treatment and education by recycling their used plastic bottles and aluminium cans.

Launched by Recapp, a free door-to-door recycling service by environmental management company Veolia, the campaign urged the app’s 20,000 users to gather their Al Ain Water plastic bottles and request a collection to gain points based on the recyclable weight.

 

Recapp launched its Ramadan charity campaign to to benefit Al Jalila Foundation (Courtesy: Recapp).

Users had the option to redeem their points for a digital charity voucher converted into a donation for Al Jalila Foundation. Annually during Ramadan the Dubai-based healthcare philanthropic organisation turns its focus to treating children with cancer.

Muslims often choose to do sadaqah (charity) during Ramadan with many habitually disbursing their zakat – the obligatory annual charity based on one’s wealth – during the holy month. According to the Mastercard-CrescentRating Ramadan & Eid Lifestyle Report 2022 that surveyed 1,000 people between January and March, 31% of respondents said they gave their zakat and sadaqah during Ramadan.

The survey also found 33% paid their sadaqah to a local organisation, while 16% preferred to donate to campaigns online.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Q&A with Malaysia’s Duopharma Biotech: Making inroads into halal pharmaceuticals

Salaam Gateway interviewed Wan Amir-Jeffery Bin Wan Abdul Majid, Chief Operating Officer/Chief Commercial Officer at Duopharma Biotech Berhad in Malaysia, about recent developments in the halal pharmaceuticals sector and the company’s plans.

 

Wan Jeffery joined Duopharma Biotech Berhad as Chief Strategy Officer in 2016, responsible for business development, halal initiatives and government relations and ethical classic government business sales. He was appointed Chief Operating Officer in 2018 with additional responsibilities in ethical classic private sales and corporate communication. In 2020 Jeffery was appointed Chief Commercial Officer when he took on board the ethical and specialty business. In 2021 he also took up the international business department commercial role, handling the group’s commercial business.

Salaam Gateway (SG): How were Duopharma Biotech’s halal sales in 2021?

Wan Jeffery: All products manufactured in our three Malaysian plants are halal certified. Removing the traded products from the equation, revenue was about RM 600 million ($150 million) with about $100-$110 million coming from our halal-certified plants. We definitely have growth opportunities in that particular portion in 2022.

SG: How have sales of halal nutraceuticals/vitamins/health supplements been over the past year? Have they declined due to COVID-19 easing or have sales kept going?

Wan Jeffery: We did well during COVID-19, post the first quarter (of 2020) and in 2021. Consumer healthcare products offset prescription drugs sales that reduced due to discontinued products or not being taken up by the market as the focus was on addressing the virus.

Consumer healthcare did well because people were boosting their immunity. That was at the height of the pandemic, but now demand is for paracetamol or cough syrup, as many are getting affected due to the highly infectious, but less symptomatic Omicron virus.

People are concerned about managing any potential symptoms by taking these products to reduce symptoms. Overall, our consumer healthcare sales are strong and achieving targets, but not as strong as in 2021 and 2020.

SG: So ordinary health problems are back?

Wan Jeffery: We are seeing the take-up of products not seen in 2020 and 2021, so there is some normality, especially from government hospitals. People are going out more and getting treatments for illnesses other than COVID-19. Anti-infectives are seeing a higher uptake than in the last two years.

SG: Any news on a halal-certified COVID-19 vaccine?

Wan Jeffery: Not yet for Duopharma Biotech. Work is being done by local players and stakeholders, but it is not a priority for either us or the Ministry of Health. There is a focus on other vaccines like meningitis and flu. We are also working on a few others for dengue and foot and mouth disease. The issue with a COVID-19 vaccine is developing one that covers all potential variants; something on which big pharma is working.

SG: What’s your outlook for halal pharmaceuticals this year?

Wan Jeffery: The question is how do we ensure increased awareness? That is the recurring theme we highlight year-in year-out as far as halal pharma is concerned. As an industry player, we can do our part, but there’s also only so much we can do. We want to see more aggressive halal pharma awareness sessions and ecosystem development programmes carried out by the government – and not on “What is halal pharma?”.

The government has supported halal pharma, but more can be done. The focus should be on enabling the ecosystem to grow and government should support programmes, whether awareness, development, market access or procurement policies that support halal pharma products as we have halal-certified products.

SG: So the Malaysian government should be a key driver?

Wan Jeffery: If you look at different market segments, the government purchases 60-65% of total pharmaceutical products in Malaysia value-wise. You can easily make that halal pharma focused procurement-wise. One government policy gives more points to tender submissions for halal-certified products, but we still do not consider it sufficiently robust to ensure halal pharmaceuticals are given priority in terms of purchasing.

It is critical to have government support and commitment beyond just halal food and beverage. Last year the Ministry of International Trade and Industry identified pharmaceuticals as a national investment aspiration. They mean to put industries into different baskets priority-wise to give due attention to development in Malaysia; a growth driver for the next 10 years. In that case we can look at how the local industry can play a big role in terms of providing products to government and the private sector, but mainly to ensure there is self-sufficiency and security around key pharma products increasingly at risk to be manufactured.

SG: So a focus on domestic manufacturing?

Wan Jeffery: If the focus is domestic first, the rest will follow. By having consumer awareness, over-the-counter products and halal pharma mentioned in the same breath as the brands on which we are spending more in terms of ads and promotions, acceptance of halal pharmaceuticals will no longer be a question, but a norm. Eventually, there would be a spill-over into regional and then international markets.

SG: What are your plans for Duopharma Biotech this year?

Wan Jeffery: Halal is obviously a key initiative for us and the other larger players in Malaysia. We have a few pillars in our seven-year strategy and halal is one of the main ones. We will also continue working with the agencies including JAKIM and the Halal Development Corporation (HDC).

JAKIM is the custodian of the certification process, but HDC develops the ecosystem and I believe the two share the same aspirations. We engage with both parties and, as a commercial entity, bring in innovative technology, products and solutions to ensure we also co-operate on requirements for halal pharma, whether for vaccines in the pipeline or biosimilars.

SG: Do you have new halal-certified products coming out?

Wan Jeffery: What I can share is our effort to obtain Halal Malaysia certification for our biosimilar Erythropoietin under the brand ERYSAA®. Last year we underwent a tedious process of determining the halal status of Chinese hamster ovary (CHO) cell line used in producing the biosimilar. We commissioned the Islamic Science University of Malaysia (USIM) to conduct the study and they pulled together a group of scientists, Sharia experts and pharmacists to review the production process from the primary cell line onwards. I think it will be a landmark study because it was the first locally filled and finished biosimilar to have applied for halal certification.

We are still reviewing the report. The next process will be for JAKIM and the National Fatwa Council to consider the concept as we are talking about using a hamster’s cell line as the host to develop therapeutic protein. They have never had to deal with such questions in the pharmaceutical context and will need to think carefully about it. It will be the first biologics cell line under the pharmaceutical review.

SG: What does JAKIM need to consider?

Wan Jeffery: It is the first time JAKIM is looking into the halal interpretation of biologics including vaccines. When it comes to vaccines and biosimilars, that concept will take years as the status of certain cell lines is not clear and we must study and deliberate from a science and Sharia perspective.

SG: Are you hoping this will be done this year?

Wan Jeffery: Yes, but for ERYSAA® we know the process from starting the master cell to production. It is on a case-by-case basis and for others, there will be other interpretations. JAKIM has come up with a resolution to potentially apply the istihalah concept, but needs to ascertain its parameters based on Sharia and scientific evidence before it can be adopted as halal. We hope there will be a positive outcome.

 

Malaysia’s halal pharmaceutical industry continues stellar growth
 
Infographic SGIE 2022: Halal pharmaceuticals

 

SG: The last time we talked, you mentioned entering the Bangladeshi market. Is this still on?

Wan Jeffery: At that time we were exploring opportunities with Bangladesh. However, their pharma industry is, to a certain extent, more advanced than Malaysia’s for generics as the government wanted to support the local generics industry such that they do not procure anything local manufacturers can’t produce.

When we talk about collaboration, it is about understanding policies and decisions. Bangladesh is more competitive in terms of scale, so there are no real opportunities there with the pharma products they currently have.

SG: Is there potential for a joint venture?

Wan Jeffery: It’s not something we have explored. Moving forward, I don’t think Bangladesh is a Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (PIC/S) member yet and that would be a pre-requisite before we entered a business arrangement with any technological provider.

SG: What do you mean by providers?

Wan Jeffery: Finished products technology, meaning they have the formulations, and for specific products it may be interesting for us in international markets.

SG: Does Duopharma have plans to expand halal pharmaceuticals into other markets?

Wan Jeffery: We are exploring international collaborations, starting with two conferences with a group of Muslim doctors in the Philippines; the best place to start for obvious reasons. The first conference created awareness around halal pharma from a Malaysian context including MS2424 (Malaysian Standard on halal pharmaceuticals); shared some of our halal-certified products and highlighted our aspirations.

It is a long road to creating awareness and converting that into commercial and procurement policy decisions, particularly in the south (of the Philippines), if not other parts of the country. We are now creating clusters of international partners to create that awareness, starting in predominantly Muslim markets large enough to potentially have the momentum to move commercially.

We are also moving into smaller markets, like the Maldives, outside of ASEAN. We want to move into more obvious halal-ready markets like the United Arab Emirates (UAE) and Gulf Co-operation Council (GCC) countries, not just to sell products, but to achieve awareness of halal pharmaceuticals.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Malaysia’s halal pharmaceutical industry continues stellar growth

Malaysia is securing its position in a lucrative market segment.

 

Kuala Lumpur: Malaysia is well positioned to capitalise on the growing global demand for halal pharmaceuticals and medical implants following the government’s foresight in regulating the country’s emerging market segment.

Envisaging halal pharmaceuticals as a large and potentially untapped market, Malaysia was a trail-blazer in formally regulating its local sector. Building on the country’s historically robust certification process for food products, the government introduced the Malaysian standard MS 2424:2012 Halal Pharmaceutical Guidelines in 2012.

This set the benchmark for the growth and development of the local pharmaceutical industry that now boasts around 2,000 registered pharmaceutical products. In addition to supporting local markets, Malaysian-produced, halal-certified pharmaceuticals are exported regionally (predominantly to Singapore and Indonesia) and further afield to Japan, China and some European markets.

According to Amrahi Buang, President of the Malaysian Pharmacists Society, halal pharmaceutical exports have witnessed consistent annual growth rates reaching RM401 million ($93 million) in 2019. However, the pharmaceutical industry is in its relative infancy and has significant untapped potential.

Before COVID-19, market observers had predicted an industry valued at RM1.6 billion ($375 million) by 2025. Buang said although the pandemic dented market expansion in 2020 and 2021, positive growth is anticipated in this fiscal year, largely buoyed by growth in Singapore, but also by halal-centric markets such as the Middle East.

Halal pharmaceuticals sales are not only seen among Muslims, but from others who are indirectly targeted by the expanding halal industry. One example is the blood thinner heparin where, from its introduction in the 1930s, had a bovine origin.

However, concerns regarding transmissible spongiform encephalopathy during the Mad Cow Disease epidemic of the late 1980s led to the withdrawal of bovine heparin in the United States and a switch to porcine-based products.

Now, reliance on a single source of origin creates a vulnerability to the market should a similar disease affect animals used to produce medicinal products. To safeguard supply chains, the US Federal Drug Administration (FDA) is encouraging the re-introduction of bovine-origin heparin – effectively offering a sizeable potential market to halal manufacturers.

“Supporting the local halal industry has always been a Malaysian government priority,” said Amrahi.

The Halal Development Corporation (HDC), incorporated under the Ministry of Finance, provides a framework designed to nurture the halal economy in various key sectors including pharmaceuticals and medical devices. Key support programmes include targeted funding and tax incentives. Other benefits like halal business parks generate local ecosystems to support company growth in synergised environments that benefit from the specific infrastructure and proximity to other halal manufacturers.

Despite denting the overall economy, COVID-19 paradoxically played an important role in further distilling efforts within the local halal pharmaceutical sector, particularly in developing a parallel local vaccine industry.

Leveraging on the existing halal certification processes, refinements to cover vaccine production were introduced in 2019. Realising this objective commenced in earnest last year with the country’s largest pharmaceutical group Pharmaniaga Berhad awarded the exclusive rights to local “fill and finish” the China origin Sinovac. This product proved to be one of the cornerstones within the local vaccine programme.

The National Vaccine Development Roadmap (PPVN) and recently launched Malaysian Genome and Vaccine Institute are attempting to stimulate research and development into local origin vaccines.

The Bilateral Investors Agreement with the Coalition for Epidemic Preparedness Innovation (CEPI) will enable Malaysia to directly access vaccine technology and transfer and develop expertise among local researchers. Nine companies have been approved for manufacturing licences or incentives and it is anticipated the first Malaysian origin COVID-19 vaccine should be launched in 2024.

This is an important step towards achieving vaccine independence and, given the current worldwide appetite for effective vaccines, this will be a key driver for growth in the halal pharmaceutical sector.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Sri Lankan halal food sector innovates to survive during worsening economic crisis

The island nation declares a state of emergency as foreign reserves fall to levels that jettison options for importing key commodities.

 

Sri Lanka’s halal-certified food and beverage industry must investigate innovative ways to weather the country’s deep economic crisis, currently spiralling out of control to the extent a state of emergency was imposed on Friday (6 May), and the prime minister resigning on Monday (9 May).

Its success or failure matters because, according to the Halal Accreditation Council (HAC), exports account for 65% of Sri Lanka’s food and drink total exports and generated average annual receipts of $2.56 billion between 2016 and 2020.

The current economic crisis is the worst since independence from Britain in 1948 with Sri Lanka so short of foreign reserves, it cannot import key commodities. Finance minister Ali Sabry told the national parliament on 4 May foreign reserves were “well below $50 million”.

This is causing severe shortages of staple foods, medicines and fuel, triggering regular power outages. The lack of essential supplies pushed annual inflation to 29.8% in April 2022 (March 2022: 18.7%), according to Central Bank of Sri Lanka data. Consequently, halal exports have suffered.

HAC director Aakif Wahab, who heads the country’s sole halal certification entity, told Salaam Gateway halal food and drink manufacturers trading Sri Lanka-sourced products face multiple challenges. The island’s indigenous cash crops are dominated by tea, spices and coconut-based lines.

For these to compete globally, packaging is key, but “right now packaging material is expensive and in short supply, due to the foreign exchange (forex) crisis combined with an escalating cost of freight”. There are also a limited number of vessels entering the country.

It is even worse for manufacturers whose products consist of a majority of imported raw materials such as milk powder, gelatine, pre-mixes, flour, oils and fats for whom securing overseas supplies was tough.

“The short-term outlook is extremely challenging,” Wahab said.

Beyond the forex shortages, the Sri Lankan rupee has been collapsing, undermining the purchasing power of importers. It was trading at Sri Lankan rupees LKR 369/$1 on 5 May compared to LKR 249/$1 on 14 March. The government has also imposed import restrictions on foreign foods deemed non-essential (taking into account domestic supplies) such as milk products, fruits and fish.

Halal is an important sector for Sri Lanka even though just 9.7% of this majority Buddhist country is Muslim. Wahab said HAC has halal-certified 90% of Sri Lanka’s leading food and beverage products. These include globally recognised brands such as Dilmah Ceylon Tea Company, Nestlé, Knorr (Unilever), Flora (Upfield) and food service franchises operating on the island – Kentucky Fried Chicken (KFC), Pizza Hut, McDonald’s, Taco Bell, Pastamania and Burger King.

Wahab said with scarce supplies, the Sri Lankan halal food and beverage sector has been forced to look for halal-certified alternative raw materials or have narrowed their range of products.

M. Rizvi Zaheed, chairman of Oceanpick Pvt Ltd, a sustainable oceanic fish farm company and chairman of the Sri Lanka Agripreneurs’ Forum, told Salaam Gateway the halal sector was innovating to survive. Groups of small food producers were collaborating with larger farms or manufacturers, including halal groups, in “nucleus farmer outgrower schemes” where a major plantation, processor or manufacturer (including halal companies) provide small farmers with inputs and resources under contract.

This has proved especially useful after the government last year banned chemical fertilisers in favour of organic fertiliser – without providing the know-how – and caused crop failures; forcing the government to import rice for the first time. He added halal companies were negotiating lengthier credit periods and alternative financing methods to handle the shortage of packaging material.

Zaheed added exploring new niche markets was also key.

Backed by the HAC’s stringent yet facilitative processes, local companies were intensifying their focus on interesting niche markets. One example was ethnic markets servicing Asian and Arabic food preferences in North America, Europe and Australia.

Local food companies were also targeting health food segments including immunity boosting foods based on spice and herbal products. On the export front, companies were using global distribution partners to “promote value-added products where Sri Lanka has competitive advantage,” said Zaheed.

These include halal-certified processed fruit and vegetable products, value-added teas, spices, coconut kernel products and bakery products – including jackfruit-based meat substitute products in value-added forms exported under brand names such as Suboga Healthy Food Products, Eudora Tea, Island Magic coconut oil and Lanka Exports that sells a wide range of food lines including spice and coconut products.

On the flipside Zaheed said the steady depreciation of the Sri Lanka rupee would help exporters “remain competitive” although, in the long-term, higher import costs could erode margins and competitiveness. Sri Lankan halal certified food companies were also strengthening their food brands, riding on the reputation of traditional products such as Ceylon Tea and Ceylon cinnamon.

Local halal-certified brands such as Akbar were proactively marketing tea, including instant tea and value-added teas, as halal certified. Similar sales strategies were being pursued by Sri Lanka’s Dilmah (black, herbal and flavoured teas); Bairaha Farms (chicken-based processed meat); Baraka (health products and coconut-based lines); MA’s Kitchen (spices and condiments, precooked curries and rice mixes); Dad’s Garden (spices, condiments, sauces and pickles); CIC (dairy and poultry products); Crescent Fine Foods (meat-based processed lines, bakery products and snacks); Elephant House (ice-creams and desserts) and HJS Condiments Island Magic fruits and vegetables in juices and brine.

The industry is also targeting business-to-business (B2B) for halal-certified exports sales. Costco Kirkland own brands are buying halal-certified dehydrated fruit and snacks from Sri Lanka’s HJS Condiments, while McDonald’s, Burger King, Subway and other global brands are prominent foreign buyers of exported Sri Lankan halal foods.

“With the economic crisis continuing with no end in sight, Sri Lanka’s halal food and drink sector will need all this determination and flexibility to stay afloat to benefit from more prosperous times in future,” he concluded.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Australia targets Malaysia’s halal food sector

Australia’s proximity to Southeast Asian Muslim communities means there are unexplored opportunities for the country to enter the halal food sector.

 

Sydney: The Australian food export sector is targeting Malaysia’s rapidly growing certified halal food market following a memorandum of understanding (MoU) signed between the Australian Trade and Investment Commission (Austrade) and Malaysia’s Halal Development Corporation (HDC).

Signed in February, the agreement should benefit Australian exporters with both organisations concurring to share information and actively collaborate in developing partnerships between Malaysian and Australian companies.

Austrade foresees growing opportunities for Australian businesses in Malaysia given the Southeast Asian country has rising disposable household income and an increasing desire for high-quality products and services. Malaysia’s gross domestic product (GDP) per head was $10,412 in 2020.

Australian products already command a “perception premium” in the Malaysian market said Paul Sanda, Austrade senior trade and investment commissioner to Malaysia and Brunei.

“They are heavily sought after due to their freshness and quality.”

The foodservice and hospitality industries, and local manufacturers, are to look seriously at sourcing Australian products. In 2020, Australia's exports of goods and services to Malaysia totalled Australian dollars AUD10 billion ($7.3 billion), according to Sanda and data service Trading Economics, but fell to about AUD6.3 billion ($4.7 billion) last year.

The largest food export segments expected to benefit from halal certification are Australian beef and sheep meat, cereals, juices and dairy. Through the agreement, the Australian government and food sector will seek to tap a global halal goods and services market DinarStandard projects to reach $2.8 trillion by 2025, as Muslims’ spending levels across all economic sectors recover from the post-pandemic slump. 

Home to around 240 million Muslims, the Association of Southeast Asian Nations (ASEAN) region provides substantive business opportunities for halal food items. In particular, among Malaysia’s 16 million Malay Muslims there is “a significant pool of engaged consumers with evolving eating habits and growing consumption of imported food and beverages”, according to the United States Department of Agriculture June 2021 report. Malaysia’s Halal Development Corporation says the Australian deal will formalise and smooth trade flows in products between the two countries.

“Our agreement is not only about sharing business insights and commercial partnership opportunities,” Hairol Ariffein, HDC CEO, said. “Importantly, it will include projects to enhance broader trade imperatives; exchange market intelligence and know-how; (stimulate) potential investment in halal industry parks, training and consultancy services and cooperation on dedicated halal business events.”

Sanda added: “With the Malaysian government committed to developing Malaysia as a leading halal industry centre of excellence and manufacturing hub, Australian businesses are well-placed to supply halal certified ingredients and raw materials to both the manufacturing and food service sectors. Australia’s world-class food security frameworks and supply chain integrity are integral to supporting these initiatives.”

Muhammad Khan, a food technologist and pharmacist and CEO of Halal Australia, also believes Malaysia’s halal market is “a profitable (one) for the Australian food sector.” He highlighted opportunities especially for Australia-produced halal meat and processed food, but sees potential for exporters of pharmaceuticals and cosmetics too.

“Australia has the reputation for producing some of the finest quality food products in the global food sector,” he told Salaam Gateway.

Khan said Halal Australia already receives queries regarding the halal market in Malaysia.

“From the amount of email and telephone correspondence, it appears the Australian food sector has been actively targeting the market.”

Of course, with Malaysian halal certification being among the most advanced worldwide, Australian suppliers must work hard to fulfil halal certification. The Department of Islamic Development Malaysia (JAKIM) is Malaysia’s primary certification agency and it has appointed foreign halal certification bodies (FHCB) to facilitate the process for companies based outside of Malaysia.

These authorised representatives will confirm the manufacturing process adheres to halal standards. In Australia there is a well-established regulatory framework for halal certification with seven Malaysia-approved certifying bodies effective 1 December 2020, such as the Islamic Co-ordinating Council of Victoria (ICCV) and Halal Certification Authority Australia (HCAA).

Among the Malaysian companies already exporting halal food to Malaysia is the Holstein Milk Company, based in Johor Bahru. Holstein sells Australian milk and manufactures nut-based milks using Australian ingredients. Malaysia-based Captain Oats also repacks Australian oats for its product range.

Major multinationals such as Nestlé Australia are using halal standards to promote their products, even if they do not use dedicated halal manufacturing procedures. Nestlé uses raw materials of Australian origin such as wheat and malt extract.

Nestlé Australia spokesperson said there was no religious ritual involved in making these products, but stressed the company sold products that have always been inherently halal.

“It is important to make sure such statements are correct. Malaysia’s population is younger and more tech-savvy than many Western countries. Its high internet coverage means consumers are strongly influenced by social media, often as a primary source of information.”

Such platforms maybe used in Melbourne, this August/September (2022), when the annual HDC-organised World Halal Conference will be held outside Malaysia for the first time. The planned two-day event will feature panel discussions, halal thought leaders and business networking opportunities where Australian firms can get a first-hand account of the halal economy.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
UAE halal fast-food brand ChicKing to open 30 outlets in Canada by 2023

Halal fast-food chain ChicKing plans to expand its global footprint with up to 30 new outlets across Canada by 2023. 

 

Dubai: The company opened its first ChickQueen branch in the multi-cultural city of Mississauga, Ontario in May 2021 as part of an expansion plan into all major Canadian cities, AK Mansoor, founder and chairman of ChicKing, told Salaam Gateway. 

“As a brand owner, it was my dream to have footprint in Canada, one of the high-potential markets globally,” said Mansoor. 

The halal-compliant restaurant chain is also looking to expand into Africa and Europe over the next two years. 

“We already signed (franchise agreements) for some potential markets like South Africa, Ethiopia, Egypt, Kenya, Turkey, Jordan, Fiji, Palestine and USA, besides the additional stores opening in the existing locations,” said Mansoor. 

ChicKing’s diverse menu is influenced by Mexican, American and Italian cuisine with options ranging from fried chicken to grilled chicken, burgers, wraps, pizzas and spaghetti dishes. In Canada, ChickQueen offers a more American-influenced selection including grilled chicken, fried chicken buckets and burgers with several Indian cuisine-inspired options such as tandoori wraps and bites. 

Halal advantage 

While halal certification has been essential for the UAE market, it continues to offer ChicKing an advantageous position from which to approach international ones. The company generally follows a two-step approach to halal-certify its products. It acquires the halal certification from its local and international suppliers and then coordinates with the local halal certification bodies to recognise the brand as halal.

In Canada, ChicKing sources free-range chicken and other raw materials locally, while importing its “secret recipe” spices and flavourings, as well as packaging materials from Dubai. 

 

The first ChickQueen branch opened in Mississauga, Ontario in 2021 (Courtesy: ChicKing).

 

Global expansion 

 Starting in 2000 in Dubai, ChicKing grew quickly, expanding into 27 countries across the UK, Middle East, Africa and Asia. It currently serves more than 20,000 customers each month. The company created a global franchise management division to manage its expansion plan and find suitable franchisees. 

“As per the business plan with the master franchise, we will develop 100 (new) stores within a five-year timeframe in Canada,” said Mansoor. 

ChicKing opened its 230th outlet in December 2021 at Expo Village, in Dubai, giving Expo 2020 visitors a budget-friendly dining option – the exhibition was postponed to October 2021 to March 2022 because of Covid-19. 

In the same month, the company announced it was launching a new outlet in West Bromwich, its third outlet in the Midlands, England. 

Rising from the pandemic 

Like most restaurant companies, ChicKing was challenged by the Covid-19 pandemic. However, Mansoor said it used this period to explore opportunities in the home delivery business to balance sales lost in dine-in and takeaway. 

“We tied up with major online aggregator partners to expand our home delivery service and used the ChicKing mobile app and online delivery to reach our customers. We were able to cater to a lot of new nationalities in those two years through home delivery platforms,” he said. 

With tourists representing a sizable percentage of ChicKing’s turnover, the company observed a decline in this customer segment during the pandemic.  

“Immediately, we adapted our business model by focusing on delivery segments, be it our deliveries or partnering with third parties’ aggregators. Overall, it wasn’t that bad; we adapted quickly and recovered the sales,” said Mansoor. 

Despite the challenges presented by the pandemic, ChicKing did not lay off any employees, around 2,300 people globally. 

“We kept them on board because they are our loyal staff. We take care of them both in good and bad times. Our recruitment now is in full swing as we continue to expand through international franchising,” said Mansoor. 


© SalaamGateway.com 2022. All Rights Reserved


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