(source: Thailand Investment Review, July 2016)
The global halal industry is one of the fastest growing segments in the world, estimated to be worth around THB 81.0 trillion (USD 2.3 trillion), according to Thailand’s National Food Institute (NFI). With an annual growth rate of 20%, this industry is no longer restricted to simply food and food-related products, and has expanded to include chemicals, household goods, cosmetics, garments, medical supplies and tourism-related businesses such as hotels, hospitals, and spas. Currently, the world’s population of Muslims is estimated at 1,700 million and this figure is expected to increase to 2,800 million in 2050. With over THB 5.8 trillion (USD 164 billion) of global halal food imports, according to the Organization of Islamic Cooperation, and more than half of the world’s Muslim population living in South Asia and the Asia-Pacific region, Thailand’s dynamic halal industry is well positioned to serve this rising market segment.
Flourishing Halal Industry
Thailand currently ranks 13th among the world’s largest halal producers. According to the NFI, halal food exports are currently valued at about THB 200 billion (USD 5.7 billion). In addition, the country is well established as a Halal Centre of Excellence in science and testing with several leading organizations
paving the way, such as the Halal Standard Institute of Thailand and the Halal Science Center. For the fiscal year 2016, the Department of Industrial Promotion has highlighted the government’s plan to allocate THB 403.8 million (USD 11.5 million) to various organizations in Thailand to carry out projects to develop and
enhance the potential of Thailand’s halal business even further.
Five-Year Strategic Plan
Given the high growth potential of the halal business, the government has formulated a 5-year plan (2016-2020) to position Thailand as one of the top five exporters of halal products and services in the world. Halal industrial development is being accelerated which includes obtaining halal certification for more Thai products and services, and strengthening the industry with more research and development. Products will also be developed to higher standards in the global market and exported under the unique brand name of ‘Thailand Diamond Halal.’ Organizations involved include the Ministry of Foreign Affairs, the Ministry of Tourism and Sports, the Ministry of Agriculture and Cooperatives, the Ministry of Commerce, the Ministry of Interior, the Ministry of Science and Technology, the Ministry of Education, the Ministry of Public Health, the Southern Border Provinces
Administrative Center, the Sheikhul Islam Office, the Central Islamic Council, and the Halal Standard Institute of Thailand.
The plan sees THB 7,900 billion (USD 224.2 billion) being invested totally, with THB 3,286.5 million (USD 93.3 million) allocated to the Ministry of Industry and other organizations to drive development over the next five years. Emphasis is being laid on developing sufficient, high quality raw materials for use in manufacturing halal products and adding value to halal exports. Related industries such as food and beverages, textiles and garments, and other non-food related products will also be boosted.
To further position Thailand as a halal food hub and a center for halal tourism, the southern border provinces comprising of Satun, Songkhla, Yala, Pattani, and Narathiwat are being developed as major production bases for halal products in Asia, linking Thailand with other Muslim countries in the ASEAN region.
Excellent Investment potential
With the world’s Muslim population on the rise, Thailand’s proximity to neighboring countries with large Muslim populations makes it an ideal investment destination. Singapore, Saudi Arabia and Egypt are currently the main markets for Thai-made halal food products. Lucrative halal markets that are yet to be cultivated by Thai halal entrepreneurs include China, Mongolia, Russia, Kazakhstan, Kyrgyzstan and Pakistan. There are plenty of opportunities for investors in halal food exports as well as halal-related tourism, hospitality and health-care services. With the growing demand for halal foods and products, and the increasing affluence of Muslim consumers worldwide, Thailand is well-positioned to be a global halal hub and capture a greater share of the international halal market.