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W Indonesia has taken firm strides to seize the opportunity to tap into the multitrillion-dollar global halal market by allocating four designated industrial zones to develop goods for the Muslim market. One of these – the Gallant Venture-owned Bintan Industrial Estate – is quickly proving to be one of the nation’s first halal food hubs.

Andy Probert takes a closer look.

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ith a population of 260 million people, of which 90% are Muslim, it is surprising that up until 2018, Indonesia did not have any dedicated halal industrial parks to speak of.

Even more so, given that Indonesia is the world’s top consumer of halal food.

Predictions suggest the global halal food industry is estimated at $2.5 trillion, and with the world’s Muslim population set to reach 2.2 billion by 2030 – effectively more than a quarter of the world population – Indonesia resolved to transition from being a mere consumer of halal products to being a primary driver of the Islamic economy.

In a bid to bridge the gap between demand and fulfilment of halal products, Indonesia’s government resolved to identify four pilot

Mr Edmund Lai (right) and Mr Jeremy Chen (left) from Riau Investment Marketing Team of Gallant Venture Ltd (Gallant Venture Ltd is the owner of Bintan Industrial Estate and Bintan Halal Hub)

locations to become halal parks. These would be for the development of food, beverages and pharmaceuticals compliant to Islamic standards.

One of these key sites is on the existing Bintan Industrial Estate (BIE), a 4,000-hectare rare sea-fronting integrated site located in the southern part of Bintan Island, Indonesia.

Bintan, along with Batamindo Industrial Park in Batam, which has also been allocated as a halal hub, are owned by Singaporebased, Indonesia-focused investment holding company Gallant Venture.

“Our business is well-positioned to leverage the strategic alliance between Singapore and Indonesia governments and is in close proximity to Singapore,” commented Edmund Lai, Head of Gallant Venture’s Riau Investment Marketing.

Gallant’s core business is as a utility provider, master planner and developer of industrial parks, property development and resort operations. With a total asset value of $1 billion, the group also has a foothold in the automotive and offshore marine industry through its associated companies.

ters in Singapore and manufacturing at BIE, said Mr Lai. “BIE has free-trade zone (FTZ) status, is strategically located to tap into Singapore’s financial and transportation network, and its overall cost-competitiveness is complimentary to international companies looking to manufacture for the export markets.”

Being a self-contained development, BIE offers a complete lifestyle accommodation through Bintan Inti Executive Village, an exclusive enclave for tenants. Housing options include well-appointed bungalows, studio apartments, modern condominiums, clubhouse facilities, tennis courts, and other amenities. Workers’ dormitories are available onsite, and the site has a professionally managed infrastructure, amenities and total customer care solutions.

“BIE, since 1994, has been the manufacturing location of choice for some of the world’s leading companies. Target industries include electronics, electrical and general manufacturing, food processing, aviation MRO, maritime and offshore marine engineering,” emphasised Mr Lai.

Bintan free trade zone status With Singapore just an hour’s ferry ride away, investors can tap into the advantages of the Singapore-Bintan twinning model by setting up regional headquar-

Bintan Halal Hub Following its special status allocation, BIE has zoned up a cluster of 22 ready-built factories to kick off the Bintan Halal Hub

and is now home to some growing food processing companies.

Mr Lai said: “BIE envisions creating a leading multi-user halal manufacturing supply chain for the global and domestic markets. We have earmarked around 100 hectares of land to realise this potential.”

Bintan Halal Hub will be supported by a dedicated halal management team and an ecosystem of supporting facilities. BIE is strategically positioned to capitalise on the halal market in Indonesia and access the rest of the halal market through Singapore.

“As one of Indonesia’s first halal food hubs, approved by the government, the park offers a one-stop halal manufacturing location dedicated to food and halal-certified products.

“We have a team of professionals and Halal certification authority onsite to assist with every operational need. Our halal ecosystem will be the platform and differentiator for their growth into the halal market,” Mr Lai asserted.

As a value-added service and depending on the type of products, Gallant Venture Inside Food & Drink

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could be leveraged to distribute products through the group’s chain of retail stores in Indonesia’s domestic market, creating quick go-tomarket opportunities.

Operating in an FTZ allows import duty exemption on raw materials and equipment, as well as Value-Added Tax exemptions for exporting industries.

Mr Lai said foreign companies could work within a conducive investment climate as 100% foreign investment is allowed, and the government had a double taxation avoidance agreement with 59 countries. Under the Generalized System of Preferences, eligible products with Indonesia’s Certificate of Origin are entitled to preferential duty-free entry to member countries.

The industrial estate has available readybuilt factories for immediate occupancy, abundant land for scalability and sustainability in operation, and an onsite liaison team that provides business license and consultancy services.

Accommodation is available, and infrastructure, such as halal-certified water.

Additionally, partnerships with halal laboratories and the Halal Audit Agency are established to assist investors with quick access and fuss-free testing, traceability audits and certification.

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Halal products: Indonesia and globally “Indonesia’s Halal Product Assurance Law has made halal certification mandatory for the sale of all food, beverages, drugs, cosmetics and other products commonly used,” commented Jeremy Chen, Manager of Gallant Venture’s Riau Investment Marketing.

Implemented on October 17th, 2019, the Halal Law requires consumer products and related services in the country to be Halalcertified and has given a five year phase-in period starting from the mandatory certification of food, beverages and slaughter process. Halal certification and labelling requirements will become mandatory for food and beverages products starting on October 17th, 2024.

Mr Chen added: “We want to develop a dedicated food and halal processing zone to allow manufacturers to produce safe, halal-compliant products through our integrated facilities. Knowing they are made in the Bintan zone, local and global consumers and distributors can confidently buy the products.”

With around 60% of the world’s Muslims living in the Asia Pacific region, Bintan has all the elements to thrive.

“Indonesia’s population of 264 million, includes 42% aged between 25 to 54 years

who are the biggest spending age group,” outlined Mr Lai. “There is still a massive gap between demand and fulfilment of halal products that we can meet.”

Due to its strong halal market potential, Indonesia is well-positioned to be the leading market for halal products and services, becoming a significant global player. In 2020, domestic spending on halal products and services stood at around $184 billion and is expected to grow 14.96% to around $282 billion by 2025.

“This makes Indonesia one of the biggest spenders in halal food globally, creating a vast market opportunity for businesses to seize,” he emphasised.

Case study: Bionesia BIE is home to Bionesia Organic Foods, an organic coconut producer that exports to the USA, Europe, and the Asia Pacific region.

Bionesia is a joint venture between a German company and Salim Group, one of the largest conglomerates in Indonesia.

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To meet the growing worldwide demand for coconut products, including rising sales within Indonesia and the rest of South East Asia, Bionesia leverages BIE’s “closeness to Riau’s plantations and trade connectivity and ASEAN’s network of free trade agreements”, explained Bionesia’s Chief Marketing Officer Gerd Waldkircher.

Susanto Kusnadi, Chief Operating Officer emphasised that “Bintan’s low tectonic activity compared to other parts of Indonesia and links to Singapore’s logistics capabilities ensure supply chain reliability and competitive prices.”

Singapore’s port is critical in exporting Bionesia’s finished goods to foreign markets, such as China, Germany, India, and the USA. To ensure consumer trust, Singapore-based laboratories, including SGS and Eurofins, certify Bionesia’s organic products are free from pesticides and plastic phthalates.

“Sending samples to Germany could take us a month. Working with Singapore laboratories recognised in the USA and Europe helps us reach our customers faster,” elaborated Chief Executive Officer Olaf Tobin.

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Future plans With a solid base to grow upon, Bionesia has a five-year master plan to establish 12 factories and expand its operations by 75% to capture more overseas markets, including emerging regions such as the Middle East.

Mr Lai said Gallant Venture’s future proposals would include the construction of an international airport in Bintan. Situated next to Bintan Industrial Estate, the airport is expected to make the estate even more attractive for investors to base their factory operations there.

“This will allow faster shipment of raw materials from sources and quicker access

for finished products to intended markets,” he said. “Bintan Halal Food Hub is more than ready to address the world’s growing demand for halal products.” n

Bintan Halal Food Hub is more than ready to address the world’s growing demand for halal products