Vietnamese firms can succeed in huge halal food market

While Muslims are a minority in Vietnam, the halal food industry here has great potential, Abdullah Abdulrohman, Director of the Halal Vietnam Export and Import Co Ltd, said.

Halal means "allowed" in Arabic, he told Viet Nam News, adding that it was not the choice of just Muslims, but also other people who give priority to cleanliness, safety and quality of products.

To local enterprises, a halal label is a symbol of good quality and a must-have item to enter the Muslim market.

Halal food. Photo: halalfoodfestival.com

He said while more and more Muslim tourists were visiting Vietnam, they sometimes discovered a shortage of halal food places in the country. For instance, they cannot find halal fast food outlets such as KFC or McDonald's in Vietnam, while these are available in Singapore and Cambodia.

At the same time, Abdulrohman saw a good opportunity for Vietnamese enterprises in the halal food market as Vietnam is one of the leading exporters of agricultural products. "With cheap labour costs, it can compete with others in both price and quality," he said.

The prospects for local growth in food and beverages are positive. The Vietnam Chamber of Commerce and Industry has forecast the industry will see a 7.5 percent increase in sales and a 10.5 percent increase in revenue this year.

Meanwhile, data from the Vietnam Report JSC says the revenue from agricultural and food products such as coffee, vegetables, fruits and pepper, besides cashew nuts, seafood and rice reached nearly USD 20 billion in 2014.

However, Abdulrohman said not many enterprises had understood the potential of the halal market, with some not even knowing what halal food was.

Of the total 3,500 enterprises working in the agricultural and food industry in Vietnam, less than 200 enterprises have halal certifications to enter the Muslim market.

Most of the enterprises having certification are experienced ones such as Coca Cola, Pepsi, Masan and Highland Coffee, besides Vinamilk, Vinamit and Huu Nghi.

A representative of Vinamit, a well-known Vietnamese dry food brand, said Vinamit had received the certification in 2009, and that now their sales network covered the ASEAN region and the Middle East.

Director Abdulrohman said to support and increase awareness of the importance of the certification as well as to provide more information on the opportunities for entering Muslim markets, they worked with related departments in Vietnam, and organized workshops and training to promote the use of halal certifications.

General Secretary of Food and Foodstuff of HCM City Association Nguyen Lam Xuan Thuy said local enterprises were developing fast and actively, adding that by learning more about the Muslim market potential and with enough qualifications, they could maximize their business capacity and opportunities. Thailand, which is developing as the "kitchen of the world," could be a good example to be emulated, Thuy said, adding that Thailand and Vietnam shared several similarities such as the absence of a large Muslim community, and having food processing industries with huge potential. But Thailand seems to have more experience in serving Muslim customers.

While most of the population in Thailand is Buddhist, the country is developing as the world's halal food research centre. The Philippines, where most of the people are Catholic, is one of the major halal chicken exporters to the Middle East. Singapore has most of the logistics and is a transit hub for halal food in the South-East Asian region.

With more recognition given to the certificates, "Vietnamese enterprises still have a good chance in the competition," Abdulrohman said.

Global exhibition organizer UBM Asia will open Food Ingredients Asia 2015, the largest trade fair in Asia showing technology, products and innovations in food ingredients, from September 9^th to 11^th in Bangkok, followed by a similar fair in Ho Chi Minh City in May.

UBM Asia's Business Director Rungphech Chitanuwat said the exhibitions would not only connect Vietnamese and Thai counterparts, but also potential Muslim importers such as Indonesia and Malaysia.

She said the development of halal food manufacturing was one of the issues to be emphasized in the exhibition, and thus, the exhibitors would benefit from the event and the connections they make.

There were 1.8 billion Muslims worldwide in 2010. The number is expected to double by 2030, representing 27 percent of the world population.

According to the figures from the Halal Vietnam Export and Import Co Ltd, 62 percent of the world's Muslims live in Asia, and 127 million in the Middle East, which imports 80 percent of its food requirements.

Muslims in the European Union spend billions of dollars on halal food. Non-Muslim Dutch consumers also show interest in halal food, spending USD 3 billion on it annually. Major retailers such as Tesco and Carrefour have their own halal areas.