South Korean Food Giant To Expand Its Footprint in the Global Halal Food Market

South Korean food giant SPC group plans to expand into Malaysia to get a share of the $2 trillion global Halal food market. SPC said it has invested 40 billion won ($31 million) to enter Malaysia’s Halal market with its bakery brand Paris Baguette. South Korean food companies have recently started paying attention to the Halal market.

Other South Korean companies have also been partnering with their counterparts in Muslim-majority countries. Halal certification bodies in the country are also supporting Halal initiatives so that they could start exporting their Halal-certified food products to Muslim countries including the Middle East.

However, in the past, the country struggled to enter the global Halal market. There were a lot of factors behind the sluggish progress. However, this time, it has been making steady progress by partnering with companies in various Muslim-majority countries to enter the global Halal market.

Halal refers to the types of food Muslims are permitted to eat in accordance with Islamic principles. As Muslims account for almost 28 percent of the world’s population, the SPC group plans to target the promising Halal food market by using Malaysia as a launch base.

“Halal hub has been an important strategy in the Malaysian food sector,” says Alizan Mahadi, a senior director of research for Kuala Lumpur-based think tank Institute of Strategic & International Studies Malaysia. “Malaysia has some of the best standards for Halal certification and therefore it’s recognized within the Muslim world.”

Malaysia is Paris Baguette‘s eighth overseas destination. SPC plans to build a Paris Baguette factory in Johor Bahru, adjacent to the country’s border with Singapore and home to the Tanjung Pelepas port. The city’s location and port make it a strategic point for efficient logistics transfer throughout Southeast Asia and the Middle East, according to officials.

The factory, designed to produce more than 100 items including bread, cakes, and sauces, is scheduled to be completed in June 2023.

Paris Baguette Singapore LTD, which directs Paris Baguette’s business in Southeast Asia, has established a joint corporation with Berjaya Food Bhd, which operates various food distribution brands such as Starbucks and 7-Eleven in Malaysia. The joint corporation, named Bergaya Paris Baguette, will open its first store in Kuala Lumpur at the end of this year. The SPC group aims to open more than 600 stores in Southeast Asia by 2030.

Officials in Kuala Lumpur have worked toward standardizing Halal food since 1974 when a prime minister’s office research arm started to issue Halal certification letters. The Southeast Asian country released its first Halal standards in 2000, ahead of other Muslim nations. The standards elevated a “cottage industry” to a “vibrant new economy” with an estimated $2.3 trillion market value, the Malaysian government’s Islamic Tourism Centre says.

This looks like an important step by a Korean food giant in establishing their footprint in the global Halal market as they plan to grab a share of the lucrative Halal market worldwide.

Both South Korea and Japan have been making efforts to get a lime share of the market. But, Japan seems to be ahead of the game.