Business Opportunities in Halal Industry - .: MIDA

1 Copyright HDC 2012 Presentation to:IDB Conference Business Opportunities in Halal Halal Industry ? Security Issues as a Driver of the Global Halal OIC? Industry in Opportunities in Halal IndustryHalal Key Drivers of Growth3 USD 2 trillion1. Sizeable and growing Muslim population 2. Growing economic development in Muslim countries3. Emergence of potential Halal markets (China & India)Sizeable and Growing Muslim Population4 Source: Pew Research Center's Forum on Religion & Public Life Mapping the Global Muslim Population, October 2009 Muslim population worldwide (2010) billion Forecasted to grow at twice the rate by 2030 representing 27% of global populationMarket Potential of Halal Food in ,per-capitachickenmeatconsumptioninIndon esiaisabout4 , ,risingdisposableincomeaswellasincreasei nHalalawareness.

2 TradedHalalproducts,especiallymeatandfoo dproductswillalsoincreaseexponentiallyMa rket Potential of Halal Food in the GCC6 Thesix(6)membersofGCCarethemostimportant countriesintheMiddle-EastCompetitivemark ets:Thereare NOENTRYBARRIERS&EXITBARRIERS Totalpopulationisonlyabout40millionin201 1andprojectedtorise40%by2030;Althoughsma llinpopulation;totalimportsofHalalmeatin toGCCcountries(chickenandbeef)exceeds1mi llionMTannually;Influentialinissuesrelat edtoHalaltradeMarket Potential of Halal Food in the EU7 MajorretailersinEUsuchasCarrefourandTESC O arenowstartingtoincludeHalalmeatintheirp roduct sassortments; Non-MuslimDutchconsumershaveshowninteres tinHalalfoodwherethetotaldemandisestimat edtoreachaboutUS$3billionannually; PortofRotterdamhasaHalaldedicatedstorage facility FrenchMuslimsspendabout30%-35% ,000 MTannually.

3 TheaverageincomeofaMusliminFranceisabout Euro1,220 averageatbetweenEuro1,550and1,850 Security Issues as a Driverof the Global Halal Market89(Source: Global Hunger Index 2009) (32%) AsiaandAsiaPacifichasthehighestnumberofu ndernourishedpeopleintheworld (Source:FAO)Global Hunger Index in IDB Member CountriesGlobal Food Hunger IndexIncreasing Food Prices and Oil Impact the Supplies 10 Internationalfoodpricesincreasedsteeplyf rommid2010to2011,raisingalarmbellsacross thedevelopingworldaboutarepetitionoffood pricecrisisof2007-2008. Showinganoppositetrend,foodstockshasredu cedandthestock-utilisationratiohasincrea sed (Source:EconomicandSocialforCommissionfo rAsiaandthePacific)Food CommodityProducersExportersImportersRice China ( ) India ( ) Indonesia ( ) Bangladesh ( ) Vietnam ( )OIC:World= Philippines ( ) Nigeria ( ) EU ( ) Bangladesh ( ) Iran ( )OIC:World= Thailand ( ) Vietnam ( ) India ( ) USA ( ) Pakistan ( )OIC:World= share data is provided in brackets.

4 Countries in redindicated OIC : FAOS ugar Brazil ( ) India ( ) EU ( ) China ( ) Thailand ( )OIC:World= India ( ) EU ( ) USA ( ) Russia ( ) Indonesia ( )OIC:World= Brazil ( ) Thailand ( ) Australia ( ) EU ( ) Guatemala ( )OIC:World= Brazil ( ) USA ( ) China ( ) EU ( ) Thailand ( )OIC:World= USA ( ) China (18%) EU ( ) Brazil ( ) India ( )OIC:World= China ( ) Hong Kong ( ) Japan ( ) EU ( ) Mexico ( )OIC:World= Commodities Trade StatisticsInvestment drivers in agri- Business and supply-side disruptions drive agricultural investment needs12 Demand for food by 2050:70%-100%Over 60% of the world s undernourished people live in Asia, mostly Muslim-majority countriesExtreme poverty of44 millionin low and middle-income countriesPovertyFood PriceGlobal food price continue to rise199020002010 Agricultural productionPercentage growth in Agricultural : FAOWhy OIC?

5 13 Source: Direction of Trade Statistics, IMF (2010) Annual Average Growth Rate (%)Growth in Intra-OIC Trade (at current USD)OIC TotalIntra-OICS teadilyGrowingTrendinIntra-OICT rade14 Source: OICB everages & Tobacco, materials, inedible, except fuels, , and vegetable oils, fats and waxes, manufactured articles, and related products, , & live animals, and transport equipment, goods classified chiefly by material, fuels, lubricants and related materials, of the Trade among OIC Countries (SITC ), 2008*Source: Estimates from the COMTRADE database of the United Nations.* Since not all countries have yet reported their trade statistics, mirror statistics were used to the extent possible to obtain more accurate Industry in Malaysia161740,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 200920102011RM millionMalaysia's trade with OICE xportsImportsUSD20bilUSD22bilUSD25bilUSD 14bilUSD18bilUSD23bil6%of Malaysia s exports to OIC ~ Halal products in 20109% of Malaysia s exports to OIC ~ billion are Halal products in 2011 GrowingTrendofMalaysia & Oil & Value 2011 IngredientUSD bilFood & BeverageUSD bilPalm Oil DerivativesUSD bilIndustrial ChemicalUSD bilCosmetic & bilPharmaceuticalUSD bilProducts and export destinations.

6 -Source: HDC, Department of Statistic, JAKIM, Custom Department & MATRADE ( Halal Product Statistic Coordination Committee )Over70%ofMalaysianexportsF&Bandingredie nts18 USD billion730 760 979 1,101 1,376 - 500 1,000 1,500 JAPANNETHERLANDSSINGAPOREUNITED STATESCHINAE xport (USD mil) Business Opportunities Halal Parks and Superhighways Halal Palm Based Ingredients Stella Chicken Stevia Bio-fertilisers Malaysia as a Fund Management Hub 19 InvestmentinHalalParksHALMAS statusisanaccreditationgiventotheHalalPa rkOperatorswhohavecompliedwiththerequire mentsundertheHDCD esignatedHalalParkDevelopmentGuidelinesH alal Parks ConceptUSD2 billion InvestmentInvestmentinHalalParksIncentiv e for Halal Parks Operator 100% tax exemption for 10 years Exemption on import duty for cold room equipmentIncentive for Halal companies operating within Halal Parks 100% tax exemption on export revenue for 5 years Double deduction on expenses incurred in obtaining international certificationIncentive

7 For Halal Logistic Operators 100% tax exemption for 5 years Exemption on import duty for cold room equipmentMajor InvestorsDubai, UAEPKFZ, MalaysiaSabah, MalaysiaQingdao, ChinaNingxia, ChinaXingjian, ChinaChina: billion population (3% Muslim) Indonesia: 220 million population (85% Muslim) Middle East: 350 million population (91% Muslim) CambodiaCentral Asia: 65 million population (85% Muslim) HalalSuperhighwayLinkwiththeGlobalSupply Chain Ingredients Livestock Seafood Animal feed Fertilizers Processed food Livestock Rice Corn Livestock Wheat Corn Corn Sugar Malaysian Palm Oil BoardA dedicated institution focused in palm oil research, development and commercialization The InnovationsStatusChallengesLack of capital to expandDomination by the MNCsWrong perception by consumers on palm oilCost of technology Halal shortenings for bakery products Halal animal fat replacer for meat products Halal fillings for confectionariesTechnology transferred to a producer in YemenTechnology ready for commercializationTechnology ready for commercialization Skin products high vitamin E DHSA for cosmetic products Surfactant for detergentsTechnology ready for commercializationStella Chicken: Integrated Poultry Farm & ProcessorStella Chicken Probiotic-fed poultry Premium chicken product Already in Malaysian market: 4 monthsPromoter.

8 Stella Gen SdnBhdExperience : GoldformCorporation SdnBhd 8 year track record Produces mil chickens per month 12 own farms, 25 contract farmsStella Chicken: Investment PropositionProject LocationLanchang, PahangInvestment for a more integrated farms and processing facilities to address the issue of: are easily exposed to the Newcastle Disease banned the usage of antibiotics in animal production. Other nations may follow suit USD 30 million of investment in Export Ready Farms and World Class HalalProcessing Slaughter Facility Central location with easy access to supplies and market on 150-200 acres of land in Lanchang Reduced logistics costs Farm production of 750,000 chicken /month and million chicken/month processing capacity Targeted export market: Singapore, Indonesia, and Middle EastStevia Part of the sunflower family Originally America Today, all over the world, incl.

9 China Used to produce sweetener / sugar substitute Healthier alternativePureCircle: Investment in Stevia farm & facilityPromoter is a USD 400 mil LSX-listed company with 2011 sales of USD 97 mil Steviasweeteners already on the market Manufactured by major F&B companiesPureCircle: Investment PropositionSteviasweetenerismorecompetit ivethantraditionalsweeteners 200xsweeter:1kgofSteviasweetener=200kgof traditionalsweetener Costoftraditionalsweetener:USD200(@USD1p erkg) CostofSteviasweetener:USD60 Costadvantageperkg:USD140 ThemarketthatistargetedistheUSD50bilglob alsweetenermarket,ofwhichSteviais7%( )Cultivating Steviadirectly in Malaysia would ease the logistics and bring direct benefits to the local supply chainInno-Works: Investment in Bio-Fertilizer Producer InnoIntegrasiSdnBhd-IPR owner of the Inno-Works system.

10 Deployment of Integrated waste treatments plants for organic wastes from palm oil mills to produce bio-organic fertilizersWings Strategic Management(Hong Kong)InnoIntegrasi60%Climate Change Capital Carbon Fund II(London)40%Inno-Works ** From existing Plantations in Sabah ~ 46,000Ha that have implemented Inno-Works Sustainable Palm Oil Productions Improve environmental benefits 100% treatment of wastes higher Oil Extraction Rate per Ha, and increase profit contributions Reduced fertilisationcost Improve soil conditions and productive life span of cropsInno-Works: Investment PropositionBio-fertilisersaremorecost-co mpetitivethantraditionalfertilisers Theuseofbio-fertilisersandpurelychemical willresultinlowerfertilisationcosts ThecostsavingswouldbeapproximatelyUSD130 /ha/year Thiscostadvantagemayexpandfurtherastheco stofchemicalfertilisershasrisenby80%inth elast2yearsBio-fertilisersare a sustainable solution that is cost-effective and increases agricultural yields 30% increase in agricultural yieldsAnAsian-basedAgribusinessFundAddre ssing agribusiness investment Opportunities in the Asian region with Malaysia as the hubInstitutional Investors Can Participate in the Fund31 Sharia-compliant Investment VehicleFund management company Institutional Investor.