Saudi Arabia sees soaring demand for halal products in a sign of wider global market growth for the sector

Saudi Arabia sees soaring demand for halal products in a sign of wider global market growth for the sector
Saudi Arabia plays a big role in the growth of the halal industry because it wants to redefine the definition of halal products and create a global reference point for halal certification, halal inspection and halal qualification. (Shutterstock)
Short Url
Updated 16 July 2023
Follow

Saudi Arabia sees soaring demand for halal products in a sign of wider global market growth for the sector

Saudi Arabia sees soaring demand for halal products in a sign of wider global market growth for the sector
  • Kingdom witnessing a boom as an increasingly number of Muslims across the world buy halal products
  • Global halal economy could grow to $4.96 trillion by 2030

RIYADH: The growth of halal medicines, cosmetics and even sportswear is fueling an economic boom that is reaching far beyond  Saudi Arabia, and the wider Middle East.

Global product launches with halal claims jumped by 19 percent from 2018 to 2020, from over 16,000 products to more than 20,000. 

Some 63 percent of these products have been reported to be coming from Asia, followed by Africa and the Middle East.

FASTFACT

$4.96 trillion According to American marketing research company Frost and Sullivan, the global halal economy is one of the fastest-growing in the world and has the potential to reach $4.96 trillion by 2030.

All this shows that those who still think of “halal” as just a set of Islamic rules regarding meat are missing out on a sector that still has a huge growth potential.

What constitutes halal?

Halal is an Arabic word that means “permissible” or “lawful.” 

According to Islamic law and stated in the Holy Quran, the term refers to both goods and services that are acceptable to Muslims. 

Halal products are typically known as being pork free, for their specific method of slaughter — whereby an animal must be killed by a cut to its throat and the procedure must be performed by a Muslim, and alcohol free. 

The opposite of halal is haram, which means “forbidden.” There are now governing bodies that issue certificates to businesses certifying that their goods are indeed made according to halal procedures.

The halal industry was “valued at $1.27 trillion in 2021 and is projected to reach $1.67 trillion in 2025,” , the acting chief product and partnership officer of the Islamic Development Bank told Arab News, adding that the food sector is largest part of that.

According to American marketing research company Frost and Sullivan, the global halal economy is one of the fastest-growing in the world and has the potential to reach $4.96 trillion by 2030. 

This would represent a sizeable increase from 2020, when the value of the global halal economy  reached $2.30 trillion.

 With a worldwide presence of 2.2 billion people or approximately 26 percent of the world’s population, Muslim consumers are a fast-growing segment.

Saudi Arabia, the birthplace of Islam, is currently undergoing rapid social and economic transformation and witnessing a boom in the halal economy.

“Halal economy is expanding,” Hussein Shobokshi, Saudi businessman and columnist told Arab News. “It used to be only for poultry and beef and for general food items and now involves cosmetics, cleaning, and household items.”

He added: “There is now also an argument to be made for products that are sustainable, made responsibly and green that should also fall under halal.

“Saudi Arabia is now championing the halal industry because it is the largest consumer of halal products in the Middle East.”

There is a huge market potential for the halal economy stresses Shobokshi, however, he emphasizes that with the increase in potential and desire by companies to take advantage of the growing scope of the industry, “the challenge now is to clarify and define what constitutes halal.”

The businessman added: “We are talking about relatively a very juicy, attractive, and serious market potential. 

“That's why a lot of the major players such as Procter and Gamble, Unilever and the Nestle and all the major food, cosmetics and clothing producers are targeting this market to be qualified as halal producers as well.”

Saudi Arabia, continues Shobokshi, plays a big role in the growth of the halal industry “because it wants to redefine the definition of halal products and create a global reference point for halal certification, halal inspection, halal qualification to become more global in its standards and remove any gray areas that would leave the consumers in a confusing area.”




Hussein Shobokshi

To be at the forefront of the halal economy is a natural step for the Kingdom given its recent transformation and the fact that it is the center of the Islamic world.

“It is a natural extension of its position to strive to lead the growing halal economy,” he added.

In October 2022, Saudi Arabia’s Public Investment Fund announced the launch of the Halal Products Development Co. 

The new company will invest in localizing the production of the halal industry in Saudi Arabia and increase the efficiency of the ecosystem locally, including plans to export to global markets. 

HPDC aims to enable small and medium-sized enterprises to grow and expand across global halal markets in partnership with key local and international players.

“Saudi Arabia has a unique and important role to play, not only among Muslim countries but all the over the world when it comes to both Fiqh Al-Muamalat (civic matters) as well as Fiqh Al-Ibaadaat (religious matters),” Waheed Qaiser, a British-Pakistani Islamic banker and entrepreneur told Arab News.  

Qaiser states that since the set-up of the first Islamic bank in 1975 in Dubai, “the focus on thalal economy and its products has brought a wake-up call among Muslims and the demand has intensified.”

He further notes how due to an increase in the health-conscious consumer, which includes Muslims, the market for natural and organic food items has grown.

“This trend has led to increased utilization of halal food products as overall they offer better hygiene and sanitation which is good for the human body and prevents various diseases,” he claimed, adding: “This is why today you see halal concessions/dedicated areas for halal products in all western-style supermarkets all over the western world.” 




Waheed Qaiser

Qaiser recalled how he was once told by a major supermarket that by introducing a halal counter their overall sales had gone up significantly.  

Buying halal products is also seen to reinforce a sense of Muslim pride and identity and this extends from Saudi Arabia to the greater Gulf, Asia, Africa and beyond. 

Many Islamic Development Bank member countries are making conscious efforts to develop their halal economies and capture the potential of the market. 

Additionally, between 2020 and 2026, economies of the Organization for Islamic Cooperation are forecasted to experience a growth rate of over 7 percent, with Malaysia, the UAE, Saudi Arabia, Qatar, and Turkey having clear visions of becoming hubs for the global halal trade. 

Even non-majority Muslim countries like Thailand, Japan, and South Korea aim to position themselves as key players in the halal market. Australia and Brazil, meanwhile, are among the top halal meat and poultry suppliers to countries in the Middle East.

One Gulf Cooperation Council country that is perceived as a major player and has been witnessing massive growth when it comes to the halal economy is Qatar.

The nation has been encouraging core sectors with high growth potential to develop products and services prescribed by Islamic law, according to resereach by the Investment Promotion Agency of Qatar.  

The study shows the country recorded market assets worth $156.4 billion in financial markets in 2021, followed by $1 billion in Islamic insurance, also known as takaful, $14.2 billion in Islamic tourism, $5.1 billion in healthcare and $849 million in Islamic fintech.  

The research also highlighted Qatar’s role in developing the global and national halal accreditation ecosystem by establishing the Organization of Islamic Cooperation Halal Accreditation Center and the evolution of the Ministry of Public Health’s guidance on importing halal food products.  

There is no doubt about the boom of the halal market both within in the GCC, wider Middle East and globally. There seems to be no limit to the quantity and variety of halal products now being produced.

However, the challenge that remains is clarifying the definition of halal.

Bukvic agrees: “There is a need to address two important challenges facing the halal economy, namely financing the halal industry and effective management of the halal supply chain.”


Oman nominal GDP sees 2.8 percent slip

Oman nominal GDP sees 2.8 percent slip
Updated 14 sec ago
Follow

Oman nominal GDP sees 2.8 percent slip

Oman nominal GDP sees 2.8 percent slip

RIYADH: Oman’s nominal gross domestic product registered an annual 2.8 percent drop thanks to an output decrease from the hydrocarbon sector, according to the latest figures.

Citing data from the National Center for Statistics and Information, the country’s central bank reported that the oil sector saw an 11.9 decrease in volume produced in the final three months of 2023 compared to the same period last year. 

This trend continued into 2024, with the average daily oil production rate standing at 1 million barrels in February, a 5.9 percent decrease from the previous year. 

The Omani oil average price at the end of February amounted to $80.2 per barrel, a 2 percent decline from its early 2023 position.

This comes after Oman and other member nations of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed in March to extend their voluntary oil production costs through the second quarter of 2024 as part of the bloc’s strategy to stabilize the oil market and prices by reducing supply. 

Oman extended its additional voluntary cut of 42,000 barrels per day of crude oil until the end of June.

In a report published in the wake of that decision, S&P Global Ratings noted that this will lead to the nation experiencing low economic growth in 2024 of about 1.4 percent. 

“We expect hydrocarbon sector output to remain broadly flat in 2024, with the decline in oil production offset by an increase in condensate and gas production. A probable increase in hydrocarbon production should stimulate growth in 2025 and 2026,” S&P said as it revised Oman’s outlook from stable to positive.

As a testament to the positive outlook, the nation’s real GDP increased by 1.3 percent during the same period as the nominal GDP, with the non-hydrocarbon sector contributing 2.4 percent and the hydrocarbon sector contributing 2.4 percent. 

Similarly, S&P forecasts that Oman’s non-hydrocarbon economy will expand by about 2 percent in 2024. 

It also noted that credit conditions in Oman remain accommodative, and this should help support non-hydrocarbon sector growth in 2024, as it did in 2023.

The central bank’s statement also noted that total outstanding credit extended by other depository corporations, known as ODCs, which consist of conventional and Islamic banks in Oman, grew by 2.7 percent to 30.6 billion Omani rials ($79.49 billion) at the end of February 2024.

Similarly, credit to the private sector increased 3.9 percent year-on-year to reach 25.8 billion Omani rials. 


Saudi cinema sector generates close to $1bn in revenue 

Saudi cinema sector generates close to $1bn in revenue 
Updated 5 min 33 sec ago
Follow

Saudi cinema sector generates close to $1bn in revenue 

Saudi cinema sector generates close to $1bn in revenue 

RIYADH: Just six years after opening its first cinemas, Saudi Arabia’s big screen sector has accumulated SR3.7 billion ($986 million) in revenue, according to government data.  

As stated by the General Authority for Media Regulation, the industry sold over 61 million tickets from April 2018 to March of the current year.  

This period has witnessed the screening of 1,971 films, including 45 local productions, which underscores the burgeoning entertainment sector within the Kingdom. 

This significant growth in this division reflects Saudi Arabia’s rapid adoption of cultural activities, aligning with its Vision 2030 goals to diversify the economy and enhance quality of life. 

Vision 2030 is driving specific support measures for the entertainment sector, aiming to contribute over $23 billion or 3 percent of gross domestic product and create more than 100,000 jobs by 2030. 

The data also highlights the expansion of cinema infrastructure across the country. 

Currently, Saudi Arabia boasts 66 movie houses with approximately 618 screens and 63,373 seats.  

These facilities are operated by around six companies and are spread across 22 cities, illustrating the widespread accessibility of  entertainment venues in the Kingdom. 


All Saudi airports achieve 100% complaint resolution in March: GACA

All Saudi airports achieve 100% complaint resolution in March: GACA
Updated 19 min 25 sec ago
Follow

All Saudi airports achieve 100% complaint resolution in March: GACA

All Saudi airports achieve 100% complaint resolution in March: GACA

RIYADH: All airports in Saudi Arabia that received passengers’ complaints in March resolved them on time, according to the General Authority of Civil Aviation. 

In its monthly classification for air transport service providers, GACA highlighted the performance of airlines and 13 airports based on traveler complaints filed during the third month of 2024. 

As per the authority’s assessment, Prince Mohammed International Airport led among international terminals with over 6 million passengers annually, registering only one complaint. This translates to 0.1 percent per 100,000 flyers, coupled with a resolution rate of 100 percent. 

According to GACA data, King Fahad International Airport recorded three complaints in March. This corresponds to 0.3 percent per 100,000 travelers while successfully addressing 100 percent of those issues.

However, King Khaled International Airport and King Abdulaziz International Airport garnered the most grievances in this category in March, with 13 and 96 recorded, respectively. Of these, 100 percent were resolved on time.

Meanwhile, Prince Naif International Airport emerged as the standout performer among international terminals, with less than 6 million passengers annually, receiving only one complaint. This is equivalent to 1 percent per 100,000 air service users, with a resolution rate matching the above.

In this section, King Abdullah International Airport and Taif International Airport each logged three incidents, Abha International Airport registered five issues, Prince Sultan International Airport recorded four concerns, and Al Jouf Airport received two. All of the air bases were able to resolve these complaints on time. 

Among domestic terminals, Gurayat, Rafha, and Wadi Al-Dwaser documented only one grievance each, coupled with a 100 percent on-time resolution rate.

Among the prevalent cases received by GACA are issues concerning services and public facilities, transportation, and baggage.

According to the authority, a total of 924 cases were lodged regarding Saudi air carriers in March. 

Among the airlines, Saudia emerged with the lowest number of incidents, standing at 10 per 100,000 travelers, boasting a resolution rate of 85 percent. 

Flynas followed closely, with 13 complaints per 100,000 flyers, and 100 percent of them were addressed. 

Flyadeal secured the third spot, with 14 such cases per 100,000 passengers, and 97 percent of them were settled on time. 

The most prevalent grievances among passengers in March pertained to luggage, ticketing issues, and flight operations.

The authority strives to provide travelers with insights into how effectively air carriers and airports address customer complaints, the Saudi Press Agency reported.

This initiative empowers passengers to make informed choices about service providers while bolstering transparency and showcasing GACA’s commitment to addressing traveler concerns. 

Moreover, it fosters healthy competition among air transport service providers and airports, spurring the development and enhancement of services.


Alistithmar Capital, Ezdihar Real Estate partner to launch $293m property development fund

Alistithmar Capital, Ezdihar Real Estate partner to launch $293m property development fund
Updated 50 min 16 sec ago
Follow

Alistithmar Capital, Ezdihar Real Estate partner to launch $293m property development fund

Alistithmar Capital, Ezdihar Real Estate partner to launch $293m property development fund

RIYADH: Saudi Arabia’s Alistithmar Capital is teaming up with Ezdihar Real Estate Development Co. to create an SR1.1 billion ($293 million) property fund in a move that will benefit Riyadh’s commercial and office landscape.

In a statement, Alistithmar Capital, the investment subsidiary of Saudi Investment Bank, announced that the aim is to boost investors’ capital growth by obtaining usufruct rights to a 103,000 sq. m parcel of land within King Saud University’s premises on Prince Turki Al-Awwal Road in Riyadh, to develop the land into a revenue-generating commercial office complex.

The firm’s CEO, Khalid Al-Rayes, commented that the partnership with Ezdihar seeks to pursue shared objectives in real estate and offer investors opportunities tailored to their goals and the evolving real estate landscape.

He added that his organization remains dedicated to offering high-quality investment prospects for real estate investors through meticulously structured funds tailored to each project’s requirements. This approach ensures maximum benefits and optimal returns on investment.


ROSHN partners with Cisco to explore use of IoT technology for smart buildings

ROSHN partners with Cisco to explore use of IoT technology for smart buildings
Updated 22 April 2024
Follow

ROSHN partners with Cisco to explore use of IoT technology for smart buildings

ROSHN partners with Cisco to explore use of IoT technology for smart buildings

RIYADH: Saudi real estate developer ROSHN Group has signed a deal with Cisco to explore the use of the Internet of Things in the company’s sustainable smart buildings. 

According to a press statement, this collaboration framework will also see technologies developed by the US-based firm being employed in the giga-project’s innovation hub which will be opened next year. 

A smart building converges various building-wide systems — such as air conditioning, lighting, alarms, and security — into a single IT-managed network infrastructure, according to Cisco’s website. 

Using IoT, physical objects are being embedded with sensors, software, and other technologies for the purpose of connecting and exchanging information, allowing smoother living conditions in smart buildings. 

Jayesh Maganlal, chief information and digital officer at ROSHN, said that this partnership will make use of IoT to ensure energy efficiency and smart building management.

“Technology underpins everything we do at ROSHN, and this agreement with Cisco will help us leverage exciting concepts such as IoT for new innovations in areas such as energy efficiency and smart building management. The goal is to use technology for the benefit of our residents and communities throughout the Kingdom,” said Maganlal. 

Salman Faqeeh, managing director of Cisco Saudi Arabia, noted that the deal with ROSHN will help accelerate the growth of the real estate sector in the Kingdom. 

“Our collaboration with ROSHN underscores Cisco’s dedication to leveraging cutting-edge technologies and sustainable practices for smart and connected communities in the Kingdom,” said Faqeeh. 

He added: “The initiative aims to explore the use of state-of-the art technologies to digitally empower ROSHN and support the company to continue playing a major role in the growth of the kingdom’s real estate market.” 

Earlier this month, ROSHN also signed a sale and purchase agreement with Dar Al Arkan to acquire and develop residential villas in SEDRA 1A, which is in northern Riyadh. 

In January, the developer – backed by Saudi Arabia’s Public Investment Fund – signed another deal with Electric Vehicles Infrastructure Co. to accelerate EV adoption in the Kingdom. 

Under the deal, ROSHN and EVIQ will work to assess and create infrastructure solutions for EVs in the developer’s residential communities and commercial properties. 

In the same month, the giga-project signed a deal with Saudi Postal Corp. to roll out a custom short address system. 

Moving away from the long, traditional form of labeling letters and packagers, the SPL’s Short National Address uses a four-character code and four digits for enhanced accuracy.