We have spent too much time standing idly by while a lot of agriculture and livestock SMEs had to close down due to the fall in domestic demand and the absence of alternatives. And, although this is one of the sectors with the lowest unemployment rate, where many of the workers who lost their jobs in the construction sector have taken refuge, the collapse of the domestic consumption, coupled with the lack of alternative markets, has shaken the foundations of an activity that is forced to continue climbing up the value chain and to reinvent itself.
A solid investment in the future for the Spanish agro-food sector could be achieved by reorienting a good part of our means of production into a booming market: the halal food industry. A market with 1,600 million Muslims consumers and valued at more than a trillion dollars per year, the food allowed by sharia law market represents an excellent opportunity to relaunch a sector that has become an strategic sector as a result of the global agro-food tensions generated by hundreds of millions of people getting out of poverty and the increase in the purchasing power of the middle classes in emerging countries.
The data shown in the report presented recently in Dubai during the Global Islamic Economy Summit, indicates the tremendous potential of the halal food sector:
In the year 2012 the Muslim consumers spent more than a trillion dollars in food, the equivalent of 16.6 % of the overall food expenditure that year, and it is expected that in the year 2018 this quantity exceeds a trillion and a half dollars and represents a 17.4 % of the total expenditure.
It is estimated that approximately 915,000 million of the trillion dollars disbursed in 2012 by Muslim communities of the 57 member countries of the Organization for Cooperation (OIC) was allocated to the acquisition of halal food. Indonesia led the consumption of halal food, with an expenditure of $197,000 million, followed by Turkey, Pakistan and Egypt with 100,000, 93,000 and 88,000 million dollars respectively. In countries not belonging to the OIC, but with significant Muslim communities such as Russia or France (halal markets value 34,000 and 11,000 million dollars respectively), the weak commercial presence of halal food forced many Muslims to consume kosher food.
Food imports of the OIC member countries amounted to $191,000 million in 2012, the equivalent to a 10.5 % of all global imports. Within the imports of the OIC, the meat and livestock intended for human consumption imports reached a 15,400 million value and were made in 91% of the cases (14,000 million) from countries not belonging to the OIC, such as the United States or Brazil.
Beyond these figures, which certainly describe a hopeful future for companies that decide to bet on this market, it is most important to note that Spain has all the necessary elements to develop a halal food hub within the triangle formed by the cities of Cordoba, Malaga and Granada: We have at our disposal a dynamic agriculture; quality products; excellent infrastructure; a reputable and easily recognizable brand (Al-Ándalus); an institution that issues the halal certifications (The Halal Institute, Córdoba) and three cities with strong cultural and economic ties to the Islamic world.
Why not capitalize on this potential to supply a non-cyclical demand such as the halal food? Why not aspire to develop a halal food hub similar to the recently developed in Malaysia (Tanjung Manis), a country, Malaysia, with halal exports totalling a whopping 11,570 million dollars? Why not use the development of this hub to promote the arrival of Hassad Food to Spain, the agro-food branch of the Qatar Investment Authority, or catalyse new investments from other UAE investment funds? Why shouldn’t we think that the start-up of this initiative can serve to create employment, offering new horizons to our producers and attracting to our country industrial investors already specialized in the production of halal food, such as the Brazilian BFR (among the 10 largest companies of the world's and the largest producer and distributor of halal chicken) or Switzerland Nestlé (with 150 halal certified factories)?
The possibilities are endless and stretch beyond the agro-food sector. The halal industry, with a value of two and a half billion dollars, and expected to reach ten billion by 2030, offers a universe of business opportunities ranging from cosmetics and tourism, to pharmaceuticals. Sectors, all of them, toward which we can also redirect a significant part of our production in order to go beyond halal food and create a global halal hub.
In Cordoba, The Halal Institute and the Agropolis Foundation have recently laid the first stone of a global hub: a great business park and an industrial brand focused on halal. But for this project to achieve the appropriate magnitude, it needs to become one of the top priorities of the Government of Spain. Are we going to let the opportunity pass?
16-01-2014 7:43 PM
Tomas Guerrero Blanco is a researcher at EsadeGeo.