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Profitable future for halal industry

This may come as a surprise to some, but the multi-billion dollar halal industry is not just about food. There are many consumer goods from cosmetics to healthcare products that all fall under the banner. While the customs behind halal meat are well known, the production of other products is less obvious. For example, some types of gelatine – found in many cosmetics and medicines – cannot be used by Muslims. And with the global Muslim population expected to rise to two billion by 2025, demand for halal products is set to soar. The global halal market is currently estimated to be worth $580 billion (Dh2.13 trillion) and is set to grow by seven per cent a year, according to Asia Inc. The halal food market alone is worth $30 million (Dh110bn) to the top five food producers, of which Nestle is the biggest with annual sales in excess of $3bn (Dh11bn). A spokesperson for the US-based company says: « The Middle East market is growing every year and as such it is becoming more important to us. We are also getting non-Muslim clients too as the halal principle continues to give confidence to consumers. » As a result of the growing industry, the second annual Halal World Expo (HWE) will be taking place in the UAE. Spread over three days from November 11 to 13 at the Abu Dhabi National Exhibition Centre, the HWE, which is being organised by IIR, will bring producers from around the world together to showcase their products as well as provide a venue to discuss such issues as standardisation of the industry. Exhibition Director Christine Weaver says: « It will give national industry leaders the chance to work together with professionals from Malaysia, South Africa, Brunei, Saudi Arabia and Indonesia, which have halal compliance systems in place. « It is often taken for granted that processed food and products available in supermarkets of an Islamic country like the UAE are fully halal compliant unless stated as being for ‘non Muslim’ consumption or use. » There will be a number of producers from Saudi Arabia and Brazil, the latter of which is one of the world’s biggest exporters of meat. The UAE, on the other hand, is the second largest importer behind Saudi Arabia and channels Dh550m worth of merchandise throughout the region every year. Local company Al Semman Farm will be selling its fresh and frozen quail eggs at the HWE and is using the event as a springboard for future growth. A company spokesperson says: « The expo gives us the opportunity to show our products and proves there is global focus to a growing demand for halal products worldwide. « With the dense concentration of Muslim consumers in the Middle East, there is huge potential for the halal industry to produce and distribute high quality, regulation certified products throughout the region. » But it is not just local companies that are keen to pass the message of halal to the rest of the world. Midamar Corporation is travelling from the United States to sell its meat products, with an emphasis on attracting restaurants and hotels. Its Director, Jalel Aossey, says it is an important event to help them convince people in this region that despite their products coming from North America, they are no less authentic than if they were produced locally. « It is a known fact that importers and consumers in the GCC region have significant doubt as to the true integrity of US-imported goods really being halal. But the Middle East market is our most strategically important region of the world, » he says. Is halal better then non-halal? For certain. « Halal is not only for our food but encompasses all aspects of our daily life and when one chooses to follow a halal lifestyle the world as they say is yours. » Weaver agrees: « Halal is a healthy option because the animals should be naturally reared, so it’s not just about how they are killed, but what they are fed too. » There is standardisation of the industry in some parts of the world, including Thailand, but Weaver believes there needs to be more awareness of halal products. « There is always the opportunity to educate. As we are surrounded by it in this part of the world we are unconsciously aware but in Europe that’s not always the case. « But as the Muslim population increases, so too will awareness of the halal industry, » she says. Although less widespread, the halal cosmetics industry is worth an estimated Dh2.06bn worldwide, and Weaver says young Muslim women are becoming more conscious of the cosmetics they use. Muslims also need to be careful with medicines as some pills are coated in gelatine made from pork products, while some cough mixtures contain alcohol. This also applies to perfumes, as many Western-made ones are made using alcohol. In light of this, some international brands have introduced halal products including toothpaste by Colgate-Palmolive and mascara and eye shadows by Australian firm Almaas. Meanwhile, a new section to this year’s HWE is the Islamic finance pavilion, which is an ever-growing market. « We have introduced the finance section because of demand not just in the Middle East but also elsewhere, » says Weaver. According to recent data, Shariah compliant banking is growing by 35 per cent a year, while Islamic finance products are valued in excess of $400bn a year, with Dow Jones launching an Islamic Market Family Index in 1999. « The Middle East market is important and products need to appeal to it as companies want business from here, » adds Weaver. Aimee Greaves business24-7.ae

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The Big Debate: Recycling – is the UAE doing enough?

Environmentally-minded residents who separate their rubbish and shop with reusable bags in their home countries may be disappointed when they move to the UAE. A co-ordinated, Emirates-wide program to collect and recycle separated domestic waste appears a distant ideal, while a lack of awareness may be thwarting many existing, well-intentioned recycling schemes. However, there are many schemes in place if you know where to look. Recycling bins are dotted across Dubai, and a municipal program allows residents to recycle their computers. An organisation called EnviroFone collected nearly 65,000 mobile phones last year and the Emirates Environment Group runs annual can collection drives. There are also office paper recycling schemes in several of the more populous emirates. Supermarkets are starting to provide separate bins for plastic bottles, paper, and cans, and service station operator Emarat recently installed ‘reverse vending machines’ which reward recyclers with raffle coupons at some of its outlets. But is enough effort put into recycling in the UAE or are existing programs fragmented and poorly-promoted? Do enough residents care anyway? business24-7.ae

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Qatar downplays crisis impact, will continue to invest

Qatar downplayed the impact of the global credit crisis on its investment plans, saying in media reports that it would continue to boost investments at home and would not pull out of depressed global holdings. Qatar, the world’s biggest exporter of liquefied natural gas, has been investing windfall oil revenues in infrastructure and industry and snapping up stakes in international companies. Qatar Investment Authority (QIA), the country’s sovereign wealth fund, is among investors from which Credit Suisse Group was raising 10 billion Swiss francs (Dh31.7bn) – or about 12 per cent of its outstanding equity. Qatar is also set to boost its investment in British bank Barclays as part of a £2bn (Dh11.3bn) rescue package. Qatar’s prime minister downplayed the extent of damage from declining overseas stock markets on its economy and QIA, the Al Sharq newspaper reported. « We are looking at a long-term strategy in investment and not a limited or temporary strategy, » Sheikh Hamad bin Jassim Al Thani said. The global market turmoil has also battered Gulf Arab bourses, until recently largely seen as shielded from global declines, denting confidence and prompting Gulf governments to intervene. With the recent slide in oil prices, worries mounted that the financial crisis could cause a slowdown in the region’s economic growth. Oil has slumped more than 50 per cent since hitting an all-time high of $147 per barrel. Earlier this month, Qatar launched a $5.3bn plan to buy 10 per cent to 20 per cent of banks’ listed capital on the Doha bourse to mitigate the impact of the global financial crisis and boost investor morale. Sheikh Hamad said the Gulf state would push ahead with investment plans despite global economic turmoil and urged stock market investors to remain calm. « Qatar will not stop or slow down its various projects due to the global crisis, » Sheikh Hamad said, according to The Peninsula. Sheikh Hamad’s comments came as the country’s largest company by market value, Industries Qatar, halted steel exports due to a 45 per cent increase in local demand fuelled by an « unprecedented » construction boom. « The increased demand on the local market reflects the strength of the national economy and the dynamism of the construction sector, » Qatar Steel said yesterday. Qatar’s economy expanded at a great pace in the second quarter spurred by high energy prices, while the construction sector grew 19.8 per cent. The economy is set to grow 11.6 per cent in real terms this year, the fastest pace in the oil-exporting region, according to a Reuters poll in July. Sheikh Hamad said the stock market drop was « unjustified ». « All the listed companies have achieved huge profits which even exceeded those of last year… The downturn is due to psychological factors only, » he said. Reuters

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Inflation eases in Bahrain, Kuwait

Two Gulf Co-operation Council member states – Kuwait and Bahrain – yesterday said annual inflation eased as food and beverage prices dropped from the year earlier. Annual inflation in Kuwait eased slightly to 11.1 per cent in July from 11.35 per cent in June, official data showed yesterday. All Items Consumer Price Index advanced to 131.1 points on July 31 compared with 118 points a year earlier, government data obtained by Reuters showed. Kuwait is the only Gulf state that does not peg its dinar currency to the dollar. Bahrain’s annual inflation slowed in September to 3.2 per cent from 3.3 per cent, as food and beverage prices dropped from a year earlier. Prices gained one per cent in the month, the government-run Central Informatics Organisation said in a monthly statistical report on its website. Food, beverage and tobacco prices declined seven per cent compared with a year earlier, the agency said. Bahraini inflation averaged about one per cent for the past decade, central bank Governor Rasheed Al Maraj said. Inflation has exceeded 10 per cent in five of the six GCC states, including Qatar, Saudi Arabia and UAE, Kuwait and Oman as oil-fuelled economic growth created shortages of housing and services. Agencies

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Colombia seeks UAE investment

General Sheikh Mohammed bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, received at his Al Bateen palace yesterday Colombian Minister of Trade, Industry and Tourism, Luis Guigermo Plata Paez. Sheikh Mohammed stres-sed the importance of exchange visits by officials of the two friendly countries for first-hand information about economic development and to boost co-operation for mutual interest. Paez briefed on economic development regarding the open economy and reform policies adopted by Colombia. He conveyed his government’s desire to attract UAE investment. Agencies

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US official says America open to Gulf investors

A high-level Bush administration official says the battered US economy is open to more investment by Middle Eastern government-owned funds and other wealthy investors. Speaking to officials and reporters at the Dubai International Financial Centre during a five-country Gulf tour, Deputy US Treasury Secretary Robert Kimmitt says he is meeting with sovereign wealth funds, companies and other financial institutions in the region. The aim, he said Tuesday, is to emphasise “we’re open to investment”. Kimmitt said many potential investors he has met in the region have been looking at possible deals in the US over the past month. AP

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EmiratesNBD launches new consumer finance firm

Emirates Money Consumer Finance, the company launched yesterday by EmiratesNBD, will lend up to Dh1 billion to individuals and small businesses until the end of 2009, a senior executive said yesterday. « Our customer research has told us that we have a winning proposition and the new company is planning to lend up to Dh1bn until the end of 2009, » Chairman Jamal bin Ghalaita told Emirates Business. Emirates Money will initially offer three products – a non-salary transfer personal loan, business loans for small and medium business owners and loans for commercial vehicles and construction equipment. The company will also tailor products for trading community and other business owners, Bin Ghalaita said. « Emirates Money has been launched to cater to the financial needs of the fast-growing resident population of the Middle East. For years, many deserving customers have fallen outside the remit of regular banking channels and have often been forced to opt for long and tedious application processes and inappropriate loan products, » he said. « We are going to change that. » After setting up operations in Dubai, Abu Dhabi and Sharjah this year, Emirates Money will expand into other parts of the UAE and the Gulf next year. « It is easier for companies to expand than it is for banks, » Bin Ghalaita said. The company also plans to tie up with distributors of commercial vehicles and construction equipment, offering customers seamless financing on these products. Bin Ghalaita said the region’s financial system has adequate support from the Government after the recent financial steps taken by central banks. « Emirates Money aims to make the process of obtaining loans hassle-free and more customer-friendly than ever before, » said General Manager Vikas Thapar. « Our direct sales team, in tandem with our branch network, will ensure that an Emirates Money representative is within easy reach of anyone who wishes to apply for a loan. « Our staff have been through extensive training programmes using the robust infrastructure of the EmiratesNBD group to ensure that wherever they are located, they are ready to explain the offering, answer any questions capably and quickly handle the loan application process. » Hamed Al Sewerky business24-7.ae

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Al Mal bullish on UAE

The continuing slide of oil prices will not erode UAE’s energy sector revenues, Dubai’s leading investment bank affirmed yesterday. In its earnings preview, Al Mal Capital said the UAE energy sector will post « strong year-on-year (YoY) results » in the third quarter of 2008. Two prominent energy sector companies in the UAE will, in fact, register growth figures deep into two and three digits YoY, Al Mal said. Abu Dhabi National Energy Company’s (Taqa) revenue is, however, expected to dip marginally when compared on a quarter on quarter basis, the same report said. « We expect Taqa to report Dh4.4bn in revenues (up 78 per cent YoY) and Dh420m in net income (up 218 per cent YoY) in Q3, » the preview said. Taking a bullish position on Dana Gas, the report said the company performance will not only ameliorate in third quarter,but there are indications to suggest the company will fare much better in the fourth quarter. « For Q3, Dana could post Dh321m in gross revenues (up 16 per cent YoY) and Dh34m in net income (up 57 per cent YoY), » Al Mal said. « We expect Dana’s Egyptian volumes to grow slightly QoQ. We continue to expect Dana’s Kurdistan operations to start impacting numbers from Q4 onwards, » it said. The report calms down speculations that falling oil prices will dent revenues of UAE’s energy majors. Oil prices have continued to traverse a downward incline even after Opec’s recent emergency measure of cutting down production by 1.5 billion barrels a day. Spot Brent prices stood at $59.32 a barrel yesterday. The prices scrape a third of the $147 a barrel price tag oil had assumed three months ago. Al Mal’s forecasts are based on oil prices averaging at $70 a barrel and gas selling at $6 per million British thermal units. « We were never in the oil prices will reach $200 a barrel camp. With signs of recession in the West and a weakness in demand, we feel our new lower mid-cycle price estimates are more realistic, » the report said. Shashank Shekhar business24-7.ae

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Saudi Arabia says need for balance on oil markets

Saudi Arabia, the world’s top oil exporter, said there was a need to achieve balance and stability on the oil markets to guarantee continuous investment in the sector, the state news agency SPA reported. Saudi Arabia « emphasised the need to achieve balance in the oil market » and is keen on « the stability of the oil market, avoiding sharp fluctuations, the cabinet said in a statement after a weekly meeting chaired by King Abdullah. The kingdom is continuously « committed to cooperation with all Opec and non-Opec producers and to boosting dialogue with consumers », it added, noting that balanced markets were in the interests of both consumers and producers. It was the first comment made by the Saudi cabinet after the Organization of the Petroleum Exporting Countries (Opec) decided on Friday to cut 1.5 million barrels per day of output. The cut failed to prop up prices which have dropped by nearly 60 per cent from a record high $147.27 a barrel in July as global economic turmoil dents world fuel consumption. Demand has fallen in the United States, the world’s top energy consumer, and in other industrial countries as the credit crisis infects the wider economy and begins to spread to emerging markets. In China, a key market for Saudi oil, apparent oil demand rose by just over 2 per cent in September, the slowest growth in 10 months. Reuters

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Saudi Arabia to provide easy loans to citizens

Saudi Arabia plans to extend 10 billion riyals ($2.7 billion) in credit to low-income citizens as Gulf Arab oil-producers step up efforts to contain the fallout from the global financial crisis. Saudi King Abdullah bin Abdulaziz ordered that the additional funds be deposited in the Saudi Credit Bank, which was established to extend interest-free loans to under-privileged Saudi citizens to help them overcome financial difficulties. The move comes on the heels of an emergency meeting of Gulf finance ministers and central bankers held in Riyadh on Saturday which was aimed at better co-ordinating the response to a global downturn that threatens to brake their region’s six-year economic boom. The Gulf Cooperation Council (GCC), preparing for a single currency by an unlikely 2010 deadline, said they were confident that economic growth would continue but were ready to take any steps necessary to shore up their economies and restore confidence. The GCC members “are satisfied with the measures taken by the countries of the council so far to deal with any possible fallout from the global financial crisis and ready to take any additional measures”. Saudi Finance Minister Ibrahim Al Assaf said after Saturday’s meeting that he was confident that the GCC countries would see their economies grow an average of 4-6 per cent in 2008 despite the global economic downturn. “The danger in this crisis is that indicators are pointing to a recession… in developed countries which suggests that the fallout from this crisis is moving into the real economy, which could carry direct and indirect effects on the economies of the Council,” Assaf said. “This requires all of us to work together to reduce their impact on our economies.” He said any slowdown in growth rates in the Gulf Arab region would be the result of a slowdown in the oil sector, as oil prices fall. Reuters