Dubai, the Gulf’s halal hub?

When the Gulfood Manufacturing trade show meets in Dubai in late October, halal food will be at the top of the menu. More than 50 companies from the halal sector are due to attend, making it the second-largest segment represented (the largest being the dairy ingredients sector). Add in companies that specialize in packaging, processing, transport – and other consumer brands with an interest in the sector – and you have a healthy halal industry in the Gulf.

What might be unexpected is that most of the food at the show is from outside the region. With a climate that makes it difficult to grow crops and raise livestock, the six countries of the Gulf Cooperation Council (GCC) rely heavily on imports. The sugar and poultry they consume may come from Brazil, the fruit and vegetables from Nigeria and the beef and dairy products from Australia.

“Apart from Malaysia, Indonesia and Turkey, Muslim countries are not big halal producers. The big players are non-Muslim countries in Europe, South America, China, India and New Zealand,” says Grégory Bajeux, general manager of Global Halal Logistics, a French firm that transports halal products around the world.

$2.5 TRILLION SPEND BY 2019

Producing and transporting all that food costs money, and the amount being bought is set to rise strongly in the coming years. Globally, Muslims spent some $1.3 trillion on food and beverages in 2013, a figure that is expected to nearly double to $2.5 trillion by 2019, according to the State of the Global Islamic Economy 2014-2015 report from Thomson Reuters.

The countries with the highest spending are, unsurprisingly, those with the largest Muslim populations, with Indonesia leading the way at $190 billion. In regional terms, however, the Middle East and North Africa (MENA) is the largest with annual spending of $412 billion in 2013.

Within the overall market, halal imports are increasingly important. According to Dubai-based Alpen Capital, halal imports into the GCC are expected to more than double from $25.8 billion in 2010 to $53.1 billion by 2020, an annual growth rate of 7.5 percent. For some places, the growth will be even faster, with imports into the UAE growing by 12 percent from $3 billion in 2011 to $8.4 billion in 2020.

UAE

While the UAE may not be the biggest market, it is perhaps the most important. Alpen Capital says the country is establishing itself as a major global hub for halal foods. The activity is centred on Dubai, where the authorities are developing halal food production and accreditation plans and trying to leverage the emirate’s existing skills as a trade and services hub. A number of specialty halal areas have been set up in the city’s business parks, including at Jebel Ali Free Zone, TechnoPark and Dubai Industrial City.

Prominent local halal producers include Al Islami Foods and Iffco, but major international firms are also present. In July, Nestlé’s facilities in TechnoPark, which produce confectionary, dairy and other products, were awarded a halal certificate from the Emirates Standardization & Metrology Authority (ESMA). Lynn Al Khatib, a spokesperson for Nestlé Middle East, says all Nestlé products in the Middle East are halal.

All this activity forms part of the Dubai government’s wider initiative to develop the emirate into the global “Capital of the Islamic Economy.” When it comes to halal food, it is already in a strong position. According to the State of the Global Islamic Economy report, Malaysia has the strongest halal food ecosystem, but the UAE is second. Events like the Gulfood Manufacturing show will only narrow the gap.

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