Indonesia’s state-owned Sucofindo hopes to double halal testing lab business using Singapore-made blockchain

JAKARTA/SINGAPORE - Indonesia’s state-owned products testing, analysis, and audit company Sucofindo hopes to double its halal business with the help of a Singapore-designed blockchain platform once the government starts its halal certification service in October, Bachder Djohan Buddin, the company’s President Director told Salaam Gateway.

Indonesia’s new state-run halal certification agency, BPJPH, will start operating on Oct 17 when halal certification becomes mandatory for all products that are halal.

BPJPH will replace non-government agency Majelis Ulama Indonesia (MUI) as the sole national-level halal certifier, although MUI will continue to pass fatawa and its research and testing unit LPPOM will become one of the many laboratories supporting the state with the work of halal testing and auditing. By the same token, Sucofindo is one of BPJPH’s appointed accredited auditors.

Buddin told Salaam Gateway Sucofindo will focus first on the laboratory testing of food and beverages, using a new blockchain service designed by Singapore company WhatsHalal.

“Currently our revenue from our strategic laboratory business unit is around 160 billion Indonesian rupiah ($11.2 million), only 20 percent of it comes from the halal segment,” Buddin told Salaam Gateway in a recent interview.

“We want to double this through the partnership with WhatsHalal.”

Food and beverages make up around 61 percent of Indonesia’s halal certification market, said Buddin, followed by pharmaceuticals at around 26 percent and 11 percent for cosmetics.

Mandatory halal certification in Indonesia will start with food and beverages, followed by pharmaceuticals and cosmetics.

Buddin could not say how many halal certification applications are currently pending with MUI and that await BPJPH in October.

“Currently we don’t have an exact number,” said the President Director, though he admits there is a “big backlog”.

WhatsHalal’s blockchain system, said Buddin, will speed up Sucofindo’s halal product laboratory testing, processing and recording, to help reduce the backlog as quickly as possible.

BLOCKCHAIN-ING HALAL CERTIFICATION APPLICATIONS

WhatsHalal CEO Azman Ivan Tan told Salaam Gateway in a recent interview that his company’s blockchain system will be ready “sometime in August” in time for Sucofindo testing and official start of mandatory halal certification in October. The two companies signed an agreement to partner in February.

WhatsHalal’s blockchain platform for Sucofindo, said Tan, is designed to document and facilitate farm-to-fork traceability of the halal supply chain at the granular, ingredients level to help speed up the process of halal certification.

He explained that the current halal certification process is a physical and time-consuming one that involves a lot of paperwork and on-site visits. It starts with submitting an application for halal certification, to testing, inspecting and auditing of the products and processes for their permissibility, to the approval and eventual release of the halal certificate.

The entire process could take anything from six to 12 months, said Tan.

WhatsHalal hopes to reduce this to one to three months, assuming all systems are in place.

The bulk of the process that the blockchain will help accelerate for Sucofindo starts with the halal application from the manufacturer, supplier or vendor right up to the awarding of the halal certification.

The applicant uploads all their documents to WhatsHalal’s system and the details are captured into the blockchain. These include all related and supporting documents, such as invoices, for all ingredients and materials used, including processing aids and additives.

As an auditor, Sucofindo will be fed with all of these details from the blockchain. If everything is in order, Sucofindo will submit its recommendation to MUI that will ensure the application and process complies with Shariah. The application is then handed over to the certifying body, in this case BPJPH.

“The blockchain portion is to control data integrity and security,” said Tan.

Hadi Rahmad, WhatsHalal Chief Commercial Officer, told Salaam Gateway the laborious task of sorting physical paperwork will be cut down drastically for Sucofindo auditors.

“The auditing and certifying to get the halal certificate is quickened because you have data captured and stored, readily available at the backend, instead of seeing it very manually, paper by paper,” said Rahmad.

WhatsHalal’s blockchain platform for Sucofindo will be outfitted for Indonesia’s specific halal certification system and standards.

The company is, at the same time, building its capacities and business to provide blockchain solutions for the entire halal ecosystem, including other halal authorities, farmers, livestock suppliers, manufacturers, and merchants, such as dine-in food services.

The company has also come up with its WhatsHalal Halal Scanner, currently in Beta, for the end-consumer to help them verify what is halal and what is not.

(Reporting by Yosi Winosa in Jakarta and Emmy Abdul Alim in Singapore; Editing by Seban Scaria seban.scaria@refinitiv.com)

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