The Port Klang Free Zone is finally making good progress but it has changed its strategy with the focus now being on export of halal food. Correspondent Manik Mehta reports on the developments at the zone

After a sluggish start, the controversial Port Klang Free Zone (PKFZ) has managed to attract a large number of investors and is now pitching itself as a gateway for the global halal food industry.
“We have strong potential to make a mark on the global halal food trade because of our value-added services and distribution park facilities,” said Chia Kon Leong, general manager of business development at the PKFZ.
The PKFZ was to be managed jointly by Dubai’s Jebel Ali Free Zone Authority (Jafza) and the Port Klang Authority following the signing of a 15-year agreement in October 2003, but Jafza later pulled out of the project because of changes in the company’s policy.
The PKFZ was modelled on the Jebel Ali Free Zone in Dubai, whose port ranks ninth in the world in terms of container traffic.
The project was criticised as being too expensive after its price tag ballooned from US$303 million at the time of its inception in 1999 to a level that left the Port Klang Authority deeply in debt. The PKFZ finally opened in November 2007 after receiving government aid.
The zone’s location in Pulau Indah serves as an excellent gateway for Asia-Pacific countries to penetrate Muslim countries, where there is a huge demand for halal products, Chia said. He noted that there were two billion Muslims worldwide with China alone having a 80 million population. The world’s halal food consumption is estimated at US$500 billion annually.
“Shippers can use the PKFZ as the gateway to repackage and export halal food to Muslim countries,” said Chia. The PKFZ has entered into an agreement with Malaysia’s Halal Industry Development Corporation (HDC) to jointly develop a halal exclusive zone (HEZ) in the PKFZ.
“The HEZ will be a dedicated halal zone for commercial and industrial activities with facilities consisting of pre-built light industrial units, open land with completed infrastructure and office space at the commercial centre,” Chia said.
The concept behind the creation of the PKFZ is similar to that of the Jebel Ali Free Zone in Dubai but it has been fine-tuned to local and regional conditions in Southeast Asia, said Chia.
The PKFZ has also been highlighting the facilities that exist for other industries. “Besides halal, the automotive industry will be one of the key segments of the PKFZ, although the volume currently is quite modest,” Chia said.
Investment in the zone has accelerated this year and 43 companies have so far invested in the zone a total $20.40 million. Aker Solutions of Norway, with an investment of nearly $12 million, is the biggest investor in the PKFZ.
European countries also see good potential for the PKFZ to be a gateway for the export of halal food for distribution to Muslims in the region. The Dutch ambassador to Malaysia, Lody Embrechts, said recently that Netherlands was working on creating a halal supply chain between Port Klang and the Port of Rotterdam.
Chia said the PKFZ was also trying to attract investments in the field of trading, manufacturing and logistics covering the automotive, oil and gas and palm-oil related industries. He said talks were proceeding with more than 40 potential investors for investments worth more than $17 million.
The PKFZ is also having talks with an unidentified foreign shipping line that is considering to set up a logistics hub at the PKFZ for warehousing, distribution, container storage and other activities. To facilitate this, a common user container freight station has been set up in the zone.
“The free zone will ensure long-term sustainability of ocean traffic as it serves as a vehicle for a port’s strength,” Chia said.
The PKFZ is adjacent to Malaysia’s premier maritime gateway Northport and this allows for seamless logistics operations as goods can be transported speedily to and from the zone,” he added. Transhipment accounts for 57 percent of cargo volume handled at Port Klang.

source:http://www.cargonewsasia.com/secured/article.aspx?id=17&article=17756

PERTH: Malaysia is encouraging Australian beef producers to get halal certification from the Depart­ment of Islamic Development Ma­­laysia (Jakim) to boost meat supplies in the country, said Veterinary Ser­vices Department director-general Datuk Dr Abd Aziz Jamaluddin.

The move, he said, was not solely for the purpose of addressing the shortage of meat in Malaysia but aimed at penetrating the halal food market in Australia.

“Our hope is to import halal beef from Australia to be processed into beef patties, frankfurters and satay for sale in their country. This could earn Malaysia RM200mil annually,” he said after visiting the Harvey Beef abattoir in Harvey, about 140km south of here, yesterday.

Dr Abd Aziz said this was not possible now as Australia did not allow the entry of processed meat products from Malay­sia as it was not free from the foot and mouth disease.

“We’re negotiating with them to let us export these products using meat from their country instead.”

At present, only nine beef abattoirs in Australia have been given halal certification by Jakim.

Earlier during the visit, Harvey Beef sales executive manager Justin Croser said they were keen to apply for halal certification from Malaysia.

Harvey Beef is a major supplier of halal beef to Saudi Arabia, the United Arab Emirates, Indonesia and Singa­pore and to Muslim communities in the Philippines, Japan, China, Mauri­tius and Africa.

source : http://thestar.com.my/news/story.asp?file=/2008/12/1/nation/2686248&sec=nation

Asia will be the next big growth area for the booming Islamic banking industry, a senior executive from Kuwait Finance House (KFH) has told Emirates Business.

The sector will find many opportunities in Asia because of the growing popularity of its structures and the region’s nascent markets, said KFH Managing Director Baljeet Kaur Grewal.

Turnover in Indonesia, for one, is projected to grow at a compound annual growth rate (CAGR) of 52 per cent from 2008 to 2010 to reach IDR11 trillion (Dh3.16 billion), underpinned by a large Muslim population, low penetration of Shariah banking and improvements to the regulatory framework.

Grewal said last year the country’s Shariah banking assets soared by 30 per cent to IDR30trn, or 1.7 per cent of the country’s total banking assets, reflecting huge growth potential. The central bank has set a target for Islamic banking assets to reach IDR91.6trn, or 5.25 per cent of total banking assets, by the end of this year.

The outlook for Islamic banking in Thailand is also rosy thanks to the country’s programme to develop the Southern Provinces as a hub for halal food.

“This creates opportunities for Islamic banks and financing via Mudarabah and Musharakah,” Grewal said. “Thailand’s halal food exports are estimated at THB70bn [Dh7.24bn] per year – 10 per cent of total imports by Muslim countries.

“The government’s $38.5bn [Dh141.41bn] five-year infrastructure budget is expected to boost construction-related sectors, hence the potential for infrastructure and real estate financing.”

Home financing is another area that could be tapped as it offers opportunities for the Takaful segment. In 2007 the number of housing loans granted by commercial banks grew by 9.7 per cent year-on-year. Last year only 17 per cent of Thailand’s population owned a life insurance policy compared to 80 per cent in Japan and 70 per cent in Hong Kong.

Grewal said there are also opportunities in China. Total banking assets there grew 25.8 per cent to $7.3trn in 2007, with total deposits increasing by 15.2 per cent to $55bn. Opportunities for Islamic banking include the debit card industry and rural banking services.

Between 2004 and 2006 housing loans granted grew at a CAGR of 19.86 per cent. The country’s large population and favourable demographics offer potential for Islamic home financing.

“China has the world’s fifth largest number of households with more than $1m in liquid assets,” said Grewal. “The number of wealthy families with financial assets worth between $100,000 and $1m are expected to increase from 3,250,000 in 2007 to 6,400,000 by 2011, forming a market for Islamic wealth management.”

Islamic banks are increasingly becoming the banks of choice because they have not been affected by the subprime crisis. Islamic transactions are asset-backed and in structures such as Ijarah, Musyarakah and others the assets are ring-fenced by the securitised structure.

Ratings of sukuk take into account the assets in a structure and as such provide a true reflection of risk, and in addition ratings of the issuers are given. Islamic banks will lend only to the extent of their deposit base and do not borrow from the credit market through structured notes or collateralised loan obligations as these instruments are not Shariah-compliant. This has shielded the Islamic industry from the sub-prime fallout.

source:http://www.business24-7.ae/articles/2008/11/pages/11302008_ac0ee9ac43074641bd92a737395de0af.aspx

XINING, Oct.11 (Xinhua) — Muslim food business leaders in China are pledging product safety and vowing to follow their religious teachings in food production.

200 Muslim food business leaders made that declaration while attending an ongoing international trade fair in the northwest Chinese city of Xining.

This is the latest move by the country’s food industry to self-regulate after a series of safety scandals.

“The recent Sanlu baby milk powder safety incident severely endangered consumer’s health and damaged the international image of Chinese food businesses,” Wang Zhanhe, general manager of the restaurant chain, Little Sheep Group Ltd., said while reading out the Chinese Muslim Food Industry Declaration on Quality and Credibility on behalf of manufacturers at the fair.

“We will strictly abide by the laws and regulations of China and other countries in the world, implement the halal standard, and create a safe and reliable halal food market,” the declaration said.

“The declaration reiterated the social morality that an enterprise must have,” said Chawalit Na Muangtoun, representative of Thailand’s Chia Tai Group and president of the company’s subsidiary in north China’s Hebei Province.

“At Chia Tai Group, we believe in the concept of using morality to direct production and sales,” he said.

Chawalit said food enterprises should lose money rather than make it immorally.

Members of foreign business delegations voiced appreciation for the food safety declaration.

“We hope these goals can be done by all the halal companies and all the dairy companies in China,” said Kamarul Arifin Ab. Gani, agriculture counselor of Malaysia Embassy. “Every company should follow the declaration.”

Shahzad Hussain Rana, commercial counselor of the Pakistan Consulate General, said products made in China can be found almostevery where in his country.

“Mistakes might happen, but I think China is a very responsible country and the control of quality is good for protecting the people,” Rana said.

The China (Qinghai) International Halal Food and Product Fair is one the most important halal fairs in the world. More than 400 international business people, experts and officials from 26 countries and regions attended the fair this year.

source : http://news.xinhuanet.com/english/2008-10/11/content_10179677.htm

YINCHUAN (Ningxia), Sept 10 (APP): China is ready to take part in the next month 2008 International Conference on Halal Food and Agriculture products, provided receiving invitation from the host country, said a senior government official.

Talking on the side lines of the Ningxia (China) International Muslim Halal Food Festival and Ningxia Investment and Trade Fair that kicked off here on Wednesday, the Director Press, Ministry of Foreign Affairs of  Ningxia Liu Guo Qing told APP that it will be a good opportunity for China to showcase their kitchen items in Pakistan.

The International Conference on Halal Food and Agriculture 2008, as per report will be held in conjunction with 3^rd Food, Agri & Livestock Asia 2008 International Exhibition on October 19 & 20 at Karachi Expo Centre.

A  local trader Sam Yu told media persons at the exhibition, that Pakistan is a big market for Halal Food.

He said that he imports five containers of fish, shrimp and other sea food items from Pakistan, while exports  ten containers of Halal Food to Karachi, every month.

He said that there is also big scope of Chinese Halal Food in other big cities like Lahore and Islamabad but being the port city, he is concentrating his business only to Karachi.

He said that besides, Pakistan, he also exports his products to Qatar, Dubai, Jordan , Saudi Arabia and many other countries around the world.

Meanwhile, the Governor of Ningxia Hui Autonomous Region Wang Zhengwei this morning inaugurated the Halal Food and Muslim Commodities exhibition.

The ceremony was largely attended by ambassadors, diplomats, delegates from foreign countries and traders.

In his address, he said that holding of the exhibition is part of the 50^th Anniversary of the founding of Ningxia Hui Autonomous Region.

He said that Ningxia has a population of 6.1 million out of which 2.3 million or 36 percent are Hui (Muslim)

Wang said that Ningxia, with more opening attitude, welcomes warmly the friends all over the world to invest, to do business and to push forward the development of Ningxia.

source : http://www.app.com.pk/en_/index.php?option=com_content&task=view&id=52216&Itemid=1

Muslims in Mindanao are aghast that non-Muslim countries are cornering the multi-billion world market for halal food products.

“The Philippines failed to cope with the demand of halal products in the world market”, said Ustadz Esmael Ebrahim, spokesman of the Muslim Mindanao Halal Certification Board Inc. (MMHCBI).

It’s a pity because Ebrahim is convinced that rich Muslim countries that largely depend on food imports would be happier if they get their supply from their fellow Muslims in Mindanao rather than non-Muslim countries.

“Thailand made it to becoming world’s number one exporter of halal products. It’s not even a Muslim country,” he said. Other non-Muslim countries that export halal food are Brazil, Australia, and New Zealand.

An Arabic term for “permissible,” halal refers to anything that is permissible under Islam. The religion forbids substances such as pork, blood, alcohol, and their by-products. Mostly healthy, halal foods have a big market among health buffs, too.

Recent dialogues of the MMHCBI with the Chamber of Agriculture, Fisheries and Allied Industries (CAFFINORMIN) and the Mindanao Development Council (Medco) resulted in two courses of action so that Mindanao can get a share of the multi-billion industry.

One, the CAFFINORMIN agreed to strengthen its poultry industry and expand production. It is set to ink a memorandum of agreement in October. (Poultry products are considered halal.)

Two, the MEDco will assist in organizing a workshop on the halal industry. “We urge the  MEDCo to realize the workshop soon as this will give us (investors) the idea as to how much are we going to invest, and for us to take a closer look at the world’s halal players”,  said Roger Navarro of CAFFINORMIN.

Exporting halal products is not as easy as regular goods, however. Islam imposes guidelines in slaughtering meat, for example.

“Right now, we really don’t have a production site for halal meat products”, Navarro said. This has been the major obstacle to local producers of halal food. Without an agency to certify that they followed the requirement of Islam, their products may not be accepted in the world market.

This problem is temporarily addressed by MMHCBI’s pact with Malaysia’s International Halal Integrity Alliance—which can certify local products in Mindanao.  The real solution is to come up with a halal certification system in the Philippines, Navarro said.

source : http://www.abs-cbnnews.com/nation/09/10/08/mindanao-eyes-multi-billion-halal-industry

The recently-concluded trip to the Sultanate by a trade delegation from Singapore Malay Chamber of Commerce and Industry (DPPMS) has been considered a huge success by the participating traders from the island.

The delegation expressed their gratitude to relevant agencies and business associations in Brunei such as the Ministry of Industry and Primary Resources, Brunei Economic Development Board, Brunei Malay Chamber of Commerce and Industry and ITM Cooperative Limited.

Some of the 23 traders even stayed a few more days in Brunei as they could not complete their business talks within the stipulated time.

Many more will be returning here to follow-up their ventures after finding out that some of the business proposals made by their Brunei counterparts are viable and can be developed.

The head of mission, Encik Yatiman Yusof, hoped DPPMS and their Brunei counterparts will pursue their preliminary business talks.

Encik Yatiman, who is also the Singapore High Commissioner to Kenya, said the four-day trip to Brunei was fruitful.

He personally felt the business trip to Brunei was more beneficial to the Singapore Malay traders than those that were organised to various other countries in the past.

The president of DPPMS, Dato’ Mohd Zain Abdullah, said he received positive response from the participating traders.

During their four-day stay in Brunei, the Singapore traders visited the International Halal Products Expo (IPHE) 2008 which was participated by traders from 10 nations.

They also met with the Minister of Industry and Primary Resources and his deputy as well as participated in the International Halal Market Conference in conjunction with the IHPE 2008.

The delegation also heard trade and investment briefings from Brunei Economic Development Board, Department of Agriculture and Brunei Tourism Development Department.

source : http://www.brunei-online.com/bb/mon/sep8h24.htm