Halal Certification

Today’s Close-up, Halal Market

“Today’s Close-up” can tell you the things about what is happening in Japan right now. Sometime it picks up a bright topic, and sometime it talks about a dark topic. My estimate is 20% of the bright ones and 80% of the dark ones. That doesn’t have to make you feel so pessimistic about our society in Japan. In another word, if the society has lots of problems, should there are a bud of a chance to change our society for a better future. If individuals who are aiming for social entrepreneurs, “Today’s Close-up” is about a program that gives a chance to find the seeds of the business.

If you say, there are entrepreneurial opportunities in eliminating the frustration of our customers; I think social entrepreneurs should notice that it is frustrating that society suffers. And social problems have been recognized by many people once, individuals or NPO, even private companies providing a method of solving those issues have been presented in our society, we, society, municipality, and country, should support and continue to operate by applying.

Japan is a country of improvement and reform. Individuals, who is thinking even if there are any problems, exist and try to find out the solutions. We will be aware of such individuals! Cheer such individuals! “Today’s Close-up”, is providing so many hints to improve the Japanese society.

Japanese Firms Eyeing Muslim Market

This logo at a fast food outlet in Malaysia holds the key to making inroads into the giant Islamic market. The global Muslim population is expected to bloom in 2 billion by 2030. Due to economic growth, the number of middle-class Muslims is expected to grow. The Islamic market is expected to reach $9.1 trillion. But to enter the market, companies must be issued halal certificates for their products to prove they are made under halal practices based on Islamic law.

Woman: {We will never put non-halal products in our mouth.}

To win halal certification, strict criteria must be met. Halal foods cannot contain pork or alcohol.

Halal Auditor: {We issue halal certificates by strictly adhering to Islamic law.}

In search of major business opportunity, Japanese companies are making inroads into the halal market with much trial and error. They must acquire a deep understanding of the religion and reviewed their processing procedures.

Japanese Company Factor Chief: {Many hurdles must be clear. We want to be pioneers in the market.}

How can Japanese firms become halal complaint to seize a huge opportunity? We will report from the business in front.

Hiroko Kuniya: {Welcome to today’s close up. I’m Hiroko Kuniya. Halal literally means permissible according to Islamic law. Muslims may not consume or touch products including food and cosmetics that contain pork ingredients or intoxicants. They are not halal. The global Islamic population in 2010, stood at  1.6 billion.  It’s expected to top 2 billion by 2030 making one in every four people a Muslim. For halal certification, producers must use approved ingredients and processed goods according to Islamic law.}

Hiroko Kuniya: {Firms around the world, they are beginning to market their goods with halal restrictions in mind with an eye on entering countries where Muslims dominate and enjoy rapid growth, in such places include Malaysia, Indonesia, and Persian Gulf countries. Halal certificates can greatly affect global sales. Halal restrictions are based on Islamic law. As more goods are imported by Islamic countries, Muslims are having a harder time deciding which goods are halal. Religious leaders must make the final decision, the halal system presents extreme difficulty for Japanese firms that are unfamiliar with Muslim practices. Against this backdrop, Islamic organizations around the world have come up with their own guidelines on halal certification over the past decade.}

Hiroko Kuniya: {Japanese firms are determined to enter the ever expanding market by understanding the halal system. Let’s look at how companies are attempting to convey their goods appeal to Muslim consumers.}

Products with Halal Logo

Dubai is a member state of the United Arab Emirates. By inviting massive investment funds, it has become a trade center in the Middle East. People in Dubai have gotten wealthier in their purchasing power is growing. Imported goods dominate supermarket shelves. Local Muslims now care about one thing when buying imports.

Man: {Is this meat halal?}

The halal mark means the product was prepared as prescribed by Muslim law.

Man: {It makes things easier for you, because if you see, you don’t need to ask. You don’t need to look it up. Just take the meat and go.}

Nonnative restaurants have also begun offering halal dishes. A Japanese restaurant.

Restaurant Manager: {This is Wagyu Beef from Japan certified as halal.}

Halal Wagyu Beef of top quality is popular. It costs almost $150 for 200 grams, but many people order it.

Customer at Restaurant: {Much softer and there is a little sweetness in it too. Unless it is halal, you cannot eat beef. It is very important.}

Restaurant Manager: {For them, price doesn’t matter. They don’t care how much.}

Markets and Muslim countries are growing rapidly, but outsiders must clear strict requirements to enter them. A firm in Dubbo, southeastern Australia, exports mutton to the Middle East. The company processes meat following Muslim law. A sign on the ceiling shows the direction of Mecca. The sheep’s head is placed in that direction as a worker prays. The process must be handled by Muslim. Products can be certified as halal only after they meet all these conditions.

Export Official: {Most importantly, we show our halal logo on the product as well. So when the consumers see the product in a retail environment, they can see that the product is halal. It’s safe and it’s from Australia.}

Japanese companies are accelerating efforts to enter Muslim markets. Indonesia in particular is capturing much attention. The country is home to more than 200 million Muslims. Its economy has been growing by about 5% annually and is now the largest Muslim market. The appetites of its expanding middle-class have diversified. Japanese cuisine is now hugely popular.

Japanese Miso in Halal Market

The number of Japanese restaurants in the country has tripled over the past five years. A mid sized company cashed in on the boom and enter the Indonesian market. This maker of Miso or soy bean paste is headquartered in Tokyo. Kozo Akaike is the head of the firms Indonesian plan. The company began making Miso in the country last year, aiming for halal certification. But it faced a big obstacle.

Miso contains alcohol, which is prohibited in Islam. Alcohol is produced naturally in the process of fermentation. Miso makers also add alcohol to the product before packaging to preserve its quality.

Kozo Akaike: {It cannot be sold as halal product. We have to develop a different type and it’s hard.}

After six months of research, Akaike came up with a method requiring no additional alcohol. This is the trial Miso. But Akaike still has to deal with alcohol occurring naturally during Miso production. The question is how much to reduce alcohol levels to have the Miso certified as halal.

In Indonesia, products must pass strict screening by a religious body before winning halal certification. In advanced laboratory, examines products and checks whether they contain alcohol. In some cases, alcohol produced during fermentation is deemed religiously non-problematic, leading to halal certification. But there are no specific numerical standards and religious leaders make the final judgment.

Halal Auditor: {We give halal certification by following the Koran faithfully. Only in Muslim leaders with deep knowledge of Islam are authorized to determine whether things are halal.}

Akaike developed Miso with the lowest possible levels of alcohol by restraining fermentation. The company applied for halal certification, but Akaike is anxious because there’s no precedent for Miso.

Kozo Akaike: {I had no idea what level of alcohol is permissible for halal Miso. It’s like turning to God for help. In any way, I desperately hope our miso get certified.}

On this day, Akaike’s company invited local people to sample its product.

Woman: {It’s really good. I’m sure that if it’s certified as Halal it’ll sell well here.}

The screening results will come next month at the earliest. Akaike hopes to sell  the Miso to middle-class customers once it’s approved.

Kozo Akaike: {I think I feel a big sense of satisfaction because of the huge obstacles. I believe that beyond those huge markets awaits.}

Islamic Standards, Halal

Hiroko Kuniya: {With us,  Teikyo University Professor Ryoichi Namikawa, an expert on Muslim markets and halal certification. Muslim consumers and Japanese businesses are said to be increasingly aware of halal practices. Why is that?}

Ryoichi Namikawa: {One factor is that as we saw Islamic countries are enjoying economic expansion, so there’s more demand for imports and luxury food. But many of those types of food or products that Muslims have never eaten before and  require checking. And another factor has to do with the Japanese side. The food market in Japan is already saturated. But the Muslim market is expanding. So businesses feel that they may be able to lead large profits if you’re the first to enter.}

Hiroko Kuniya: {This maybe becoming a boom. What difficulties do Japanese businesses face when trying to enter the halal market?}

Ryoichi N: {One is that the technical level must meet Islamic standards. Halal involves two areas. One concern strictly religious restrictions and the other safety and hygiene. Standards in both areas must be met technically. Another difficulty is the halal system differs by country. There’s no compatibility. So even if the product is certified in one country that cannot be automatically recognized in another. This is a very difficult point.}

Hiroko K: {I understand that religious leaders make the final decision as in the case of the Miso manufacture trying to produce locally in Indonesia. Alcohol is generated naturally during the fermentation process. Does Islam prohibit even the small amount of alcohol produced that way? }

Ryoichi N: {Standards governing alcohol, meat processing methods and pork are very strict in principle. So getting certified is very hard as we saw the case of the Miso company.  But some local fermented products also include naturally producing alcohol. Those products are distributed in Islamic countries. So a bit of leeway does exist. Medically good at times pose no problems even if they do not meet halal standards because they save lives.}

Hiroko K: {How do Muslims feel about the three main standards?}

Ryoichi N: {An appropriate example doesn’t come to mind, but they may feel the product’s are impure unless they meet the standards. For example, we would not eat off the plate that once had excrement, even if it was washed afterwards. Muslims may feel something like that.}

Hiroko K: {But even in countries with many Muslims alcoholic beverages are sometimes displayed prominently in supermarket.}

Ryoichi N: {Consumers’ awareness differs considerably by country. For example, in Indonesia, alcoholic drinks can be displayed prominently in supermarkets. But in Malaysia they must be impure non-halal areas. It depends on what consumers allowed. So there appears to be a large gap in consumer’s mind sets.}

Hiroko K: {So businesses must adapt to each country?}

Ryoichi N: {Yes.}

Hiroko K: {More than 150 institutions for halal certification have been established around the world over the past decade. Malaysian’s government took the initiative at an early stage to establish a halal recognition system. Let’s see how companies are actively trying to use Malaysia as a gateway to the global halal market.}

Halal Recognition System

Muslims make up 60% of Malaysia’s population. An international trade fair in April showcased halal products. They included Kimchi from South Korea and cheese from Italy. More than 300 firms promoted their halal goods.

Pakistani Company Official: {Malaysia is the hub of the halal product in the world. It is a good way to get the halal logo that to promote our products.}

Woman: {This is our halal center.}

Malaysia is taking advantage of the halal system to come up with a national strategy. It is the first country in the world to create in English halal certification guidelines that are as clear-cut as industry standards. The guidelines covered in detail acceptable ingredients and procedures for preparing and processing. In order to meet the needs of companies with little understanding of Islamic practices.

Lawmaker Norah Abdul Rahman is in charge of Malaysia’s halal strategy. She aims to make Malaysia a major international hub for halal products by attracting foreign companies.

Norah Abdul: {We are able to go upstream and downstream and also we are looking at the total development of the whole area. This is the biggest halal pocket in the world.}

Malaysia’s government and regional governments have spent $550 million to create a halal hub in a vast tropical rain forest. Farms, aqua farms and a halal research facility are to  be built there. The halal park is scheduled for completion in 2020.  The government says its halal certification will allow companies to enter the global Islamic market.

Some firms already operate there. A Taiwanese company is farming fish and  prawns with an eye on halal certification. It developed feed that is free of pork ingredients and intoxicants. It aims to ship its goods outside Malaysia.

Company Chairman: {The brand for the Malaysia halal, this is a number one brand. The area is so big. You can take a look. It is a world central of seafood.}

Malaysia has also begun certifying halal delivery services. The government says the system will strengthen the credibility of halal products. It began to cover deliveries last year. A major Japanese distributor has trucks exclusively for halal products. It began offering special delivery of halal products on a trial basis. All the drivers are Muslims. Halal delivery includes careful examination of the packaging.

Reporter: {Why are you removing this box?}

Man: {There’s a hole in it. Halal attaches importance to cleanliness. If  the boxes are torn, the products would become unclean.}

The trucks are washed in line with Islamic law. This is based on the Islamic ritual of cleansing the body and objects. It involves the use of powder clay containing no chemical additives. The clay is mixed with water and spray. It said to have strong disinfecting power. The trucks are then washed with water. Halal requires repeating the procedure seven times.

Senior Manager: {That is our responsibility. So we want to make sure it it clean and we want to do the proper compliance.}

The company will aim to win halal certification as soon as next month. The firm aims to branch out to delivery of halal products to global Islamic markets using Malaysia as its hub.

General Manager: {Malaysia is the first country in the world where we will be offering halal delivery. We will be using our experience in Malaysia to start halal distribution in other countries.}

New Challenge for Japanese Firms

Hiroko K: {We saw a trucking business trying to get Halal certification in Malaysia. What are your views on the country’s strict system?}

Ryoichi N: {Malaysia is at a disadvantage compared to other large countries when it comes to direct foreign investment, so this scheme is a way to make up for that. The country for high priority on halal certification saying that if businesses in invest in Malaysia, they will have access to the 1.6 billion global Muslim population.}

Hiroko K: {You mean Malaysia’s personnel costs are higher?}

Ryoichi N: {Yes and this puts the country at a disadvantage.}

Hiroko K: {So the government is using the system to attract foreign companies?}

Ryoichi N: {To a certain extent, yes.}

Hiroko K: {From the viewpoint of Japanese companies, it seems as though costs will rise in various ways. How have Japanese businesses responded?}

Ryoichi N: {As we saw Malaysia’s system is easy to understand, so if manufacturing and sales are carried out in the country, businesses can acquire a lot of know-how.}

Hiroko K: {The manuals are in English.}

Ryoichi N: {Yes. That’s the main reason. Another is that it’s very hard to get halal certification in Japan. This is because it’s unclear whether the ingredients are halal. Even if they are, it’s still not known whether the subsequent procedures including transports are halal. Due to such problems, businesses go to Malaysia.}

Hiroko K: {So does it become much easier to get Halal certification for products made in Malaysia?}

Ryoichi N: {Even smaller businesses in Malaysia can get halal recognition quite easily. So the Japanese companies can too, if they’re in Malaysia. Another factor is that halal ingredients are distributed locally and are easy to procure. Companies can certify products much more easily, so they set up factories there.}

Hiroko K: {Japanese people do not have much contact with Muslims and tend to be unfamiliar with the religion. Our company is more motivated to become the first to reap profits from such a vast market? Also, what will be the key for Japanese firms in overcoming these obstacles and advancing smoothly into the halal market?}

Ryoichi N: {Japanese businesses have no problem with technical standards. What’s important to know is that the halal system is not a government scheme or standard, but a religious one through and through. It is about faith and how important Islam is to its followers. Businesses have to understand this.}

Hiroko K: {Will business officials had difficulty explaining this at their company?}

Ryoichi N: {Well, if key officials do not have such awareness, they will not understand the need for plant investment for things like additional lines of halal products.}

Hiroko K: {So businesses will need to know how important Islam is to believers?}

Ryoichi N: {Yes.}

Hiroko K: {Thank you for joining us. Our guest was Ryoichi Namikawa.}

Conclusion; where are we going from now?

Japanese tend to be the follower, not the front runner. People usually observe what is happening around them, then if the majority moves toward some directions, they would feel secure that everyone thinks that I am doing the right stuff because everyone thinks that way too. Because of that reason, if the few of the Japanese Company start to make profit in the Halal Maket, soon the majority of the Japanese would follow. And that becomes the business trend.

Once we recognize how to do it, this time is how to enter the huge Isramic Market opportunity, they will adapt the original manual to the new upgraded one, which is usually innovative and refined for that particular company or whole business field.

And what is important for the Japanese that Asian Muslim are much closer to us than Middle East Muslim or African Muslim. We start from the Asian Muslim market, then go to the world of the Islamic Halal market makes us think much more accomplishable target.

In The Long Run

In the Halal market, with a little by little there is small progress what they can get the products with halal recognition. After a whole, they cannot imagine what was like our daily life five years or ten years ago because there is so much change in what is available with halal certification.

And if the halal market expands eventually, the economy around its countries will benefit. There should be lots of job opportunities and Islamic people will thrive in every field. I hope that with economic grow will change Islamic people’s behavior somehow, especially the young generation. They will be more proud of being Muslim. They don’t have to become desperate or compare what is lacking from the western society. Within themselves, as long as the halal market is prosperous, there will be hope and peace in everywhere.


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