Upon hearing the word ‘Halal’, many people would first think of Islamic food and foodstuffs. But in fact, the concept of Halal goods covers many areas, including food and consumer products like medication, cosmetics and clothing.
Manufacturers of consumer products in Thailand are becoming more aware of the growing interest for Halal goods and the growth opportunities that are available. These products not only cater to Muslims, but also geared towards general health-conscious consumers who are becoming more aware of the benefits these products can offer. Because of this potential, more and more logistics providers are jumping onboard to service this market, although many adaptations and improvements may be need needed for most providers operations. This is because Halal goods must be strictly processed and handled in accordance Islamic religious dogma, free from any contamination.
Aiming to improve the understanding on the importance of Halal Goods handling, we spoke with Ms. Peangporn Sroyraya, Executive Officer, Yusen Logistics (Thailand) Co., Ltd. who helped shed more light on the logistics operations behind Halal goods, growth trends and business opportunities available for this unique product in Thailand.
Handling Halal Products
Currently, there are only a handful of providers that service Halal goods due to its complicated procedures. Some providers may see Halal goods as a market with limited opportunities, but in reality, over 7 million people consume Halal goods in Thailand making the area quite attractive for those willing to invest.
Responding to this expanding market, logistics providers serving these specialized products must have proper training and Halal certification. “Prior to providing logistics services for Halal goods, a provider has to understand Islamic Dogma. Yusen Logistics has received direct training from The Central Islamic Council of Thailand (CICOT) and we’re able to provide an efficient service in accordance with Islamic law,” Ms. Sroyraya said.
The main pillar to successful Halal logistics management is to separate Halal products from non-Halal products. Meaning no physical interaction by any means, as non-Halal products are contaminated according to Islamic law. Not only should the products be kept separately, but warehouse facility and all tools and equipment are to be separated and only be used for Halal goods specifically as well.
The idea is to prevent cross contamination of Halal goods with contaminated materials, according to Islamic dogma, or ‘Haram’. Haram includes pigs, dogs, clawed animals, poisonous animals, disease carriers, insects, any animals not properly slaughtered in accordance with Islamic procedures, including alcohol and blood. Logistics practitioners must be very careful in order to prevent contamination.
Ms. Sroyraya added, “Warehouses carrying Halal goods must be a closed compound, clean, secure and properly managed. They must separate goods in accordance to their type and condition. Staff working in the warehouses must always wash their hands with clay soap before beginning work. Most importantly, the procedure to transfer Halal goods between trucks and warehouses must have measures in place to prevent contamination.”
Even though the Halal logistics services in Thailand are still in their early stages, Halal goods manufacturers are growing and outpacing Halal-specialized logistics providers. This gap is leaving many logistics providers to rapidly adjust their services in-line with the Islamic law to insure suitable handling of this cargo for consumers.
Yusen Logistics acquisition of Halal certification from The Central Islamic Council of Thailand was very important for them as Ms. Sroyraya said, “Logistics providers in other Islamic countries, such as Malaysia and Indonesia, have strict practices and are trusted by consumers globally. Most Logistics providers here only offer separate warehouse space for Halal goods as a service, which is not sufficient, according to the Dogma, making it difficult for us to earn the trust from Islamic consumers around the world. We need to strengthen our procedures and managements in line with the Dogma, to earn global trust.”
The evaluation standards for Halal warehouses are based on the same criteria as the consideration for Halal factories. However, for a certified Halal warehouse, they must carry only Halal certified products. Anything without a certified Halal logo must ever be in the warehouse.
“Yusen Logistics consults with The Central Islamic Council of Thailand to get their advice on many matters. They have supported us with information and suggestions on warehouse operations and critical points to pay attention to during operations,” Ms. Sroyraya added. “Fortunately, we also have Islamic staff in our warehouse management team, so they are able to assist as well as following Halal procedures is natural for them. We have also consultants from the Islamic Council whom provide expertise with us and directly to customers, help increasing their trust in employing our Halal services.”
Both public and private organizations in Thailand are paying more attention to the local produced Halal goods, and are trying to promote them as a major export product category. However, logistics wise Thailand is not yet ready, because while the country does have standards for Halal goods, they do not meet the requirements of the strictest Islamic countries. Ms. Sroyraya commented on the issue, “Halal logistics services in Thailand are neither strong nor outstanding compared to other countries. The reason is that we do not yet have logistics providers who abide strictly to the Halal code, and as a result, our Halal goods can only be shipped to countries without strict Islamic standards.”
Another factor that weighs down Thailand’s ability to export Halal goods is that a majority of the population are Buddhist. This affects the trust of consumers in foreign countries, compared to a predominantly Muslim country such as Malaysia, whose goods are accepted internationally. Thai Logistics Providers must improve their services for Halal goods and seek network cooperation from other countries to expand their reach to complete the Halal servicing cycle if they are to ever truly expand.
“Earlier this year, Yusen Logistics agreed to a partnership with two Malaysian logistics providers to provide Halal cold storage. We have also educated our staff by sending them to train for Halal Logistics Services in Yusen Logistics’ branch in Malaysia. We need to bring back this knowledge to improve our Halal logistics procedures to cover more service aspects.” Ms. Sroyraya commented. “We have a plan to expand in Halal logistics. In doing so, we have to know how to select transporting trucks, container maintenance, container cleaning and stacking the Halal way. Once our staff have completed their training, we will seek councils from The Central Islamic Council of Thailand and try to lay down a ground work for standardized Halal Logistics for Thailand.”
In order to improve logistics Service capability in Halal goods for Thailand and attain acceptance from the global market, Thai logistics providers have to thoroughly understand Islamic practices and strictly following the rules. All involved, both public and privately, should also seek consulting from The Central Islamic Council of Thailand in building their knowledge base to better understand the essence of Halal logistics, and promote proper Halal logistics procedures to boost the growth of Thai Halal product exports.