Dubai Islamic Investment Group creates new vehicle for halal investment, as Dubai prepares to host Halal World Congress.
May 14, 2008
Dubai Islamic Investment Group is to create a new vehicle for halal-based investments. It is to partner with Malaysia’s pilgrim fund, a state fund that helps Muslims save for their Haj pilgrimage, and Malaysian state-owned Halal Industry Development Corporation. The new company, expected to be established before this year end, plans to invest in agriculture, food processing, restaurants, grocery firms and hypermarkets.The news comes just days after Malaysia’s Sarawak state said it had received around $438m in foreign investment, mostly from Taiwan and the Middle East, for a proposed new zone making halal products. IHI Alliance, a non-profit body, was started with around $4.6m provided by the Malaysian government, to harmonize halal standards and certification at the global level.
So, what exactly is halal, and why is it attracting so much of investment?
Halal, an Arabic word meaning permissible, refers to foods and other items which are allowed under Islamic law. It forbids consumption of pork, blood and alcohol and stresses that investments must meet ethical Islamic standards and avoid industries that involve gambling.
According to the Halal journal, the global industry is worth around $580bn, with the halal food industry growing at 7 percent annually. With 1.8b Muslims worldwide, it is estimated the halal food and non-food industries could reach $2.3 trillion.Islamic assets are growing at an annual pace of around 20 per cent and are set to hit $2tn in 2010 from $900bn now, Ernst & Young forecast in February.
With so much money involved, the ‘halal’ brand seems set to boom. According to Halal journal, McDonald’s in Singapore saw an influx of eight million patrons a year after obtaining a halal certification. But warns halal businesses need to avoid a patronizing attitude and ensuring the product’s quality.