Halal development cluster to unlock local industry potential in Brunei Darussalam

One of the two specialised industrial zones currently being run by Darussalam Enterprises, the country’s latest business support service, is the Brunei Bio-Innovation Corridor (BIC). The $300m BIC seeks to raise the Sultanate’s profile in the fast-expanding global halal industry. Figures from Thomson Reuters suggest that this market has a potential value of $2.3trn, breaking down into $1.37trn in food and beverages, $72bn in pharmaceuticals and $46bn in cosmetics.

Taking Over

To ensure that Brunei Darussalam gets its share of this, the BIC, which will eventual cover some 500 ha north-west of Bandar Seri Begawan, aims to act as a globally linked cluster for the production of a full range of halal goods, while also boosting halal research and development (R&D). The corridor’s managers have been making a major play for international business in recent years, with delegations promoting the BIC’s activities and visits to the UK and China, among other countries. In the latter case, the Brunei-Guangxi Economic Corridor is one project the BIC is keen to further develop and utilise to promote the Brunei Halal label in China.

This latter scheme also highlights Brunei Darussalam’s intention to become a channel for halal products flowing between China and third countries. The Sultanate, as a member of ASEAN, has access to a range of free trade agreements (FTAs) with non-ASEAN nations, including China, Japan, Australia, New Zealand and South Korea. In addition, the forthcoming Trans-Pacific Partnership will bring a host of Latin American countries into the mix, along with the US and Canada. The Sultanate hopes that these FTAs will position it favourably in attracting companies to its shores. A major incentive in this is Brunei Darussalam’s halal certification scheme, Brunei Halal, which has a reputation for much greater rigour than many other rival schemes. The country has only one halal standard, validated by the Ministry of Religious Affairs (MRA), which lends it additional credibility.

Thus, the Sultanate hopes that through the BIC, FTAs and Brunei Halal international companies will be able to bring basic goods from countries outside ASEAN to Brunei Darussalam and have them processed. These can then receive the Brunei Halal stamp, after applying to the Halal Food Control Division at the MRA. Once certified, these goods can then be re-exported with a Brunei Halal label to other countries within the FTA framework.

Feeding Demand

The Sultanate has already attracted much interest among foreign investors in the halal-processed foods segment. One example is Dubai-based Saahtain Food, which specialises in ready-to-eat meals for humanitarian and military bodies as well as ordinary commercial sale. In May 2015 the company signed a letter of intent with the then-Ministry of Industry and Primary Resources announcing its intention to set up in Brunei Darussalam, and move into the BIC once up and running.

Another outfit in the field is Simpor Pharma, which is a BN$26m ($18.5m) joint venture between Canada’s Viva Pharmaceuticals, private equity fund Aureous (Brunei) Capital and local investors. The firm launched its first range of halal health supplements in June 2015 under the SP brand. A third case is Australia’s Neptune Bio, which focuses on R&D in the health foods industry. Neptune opened a lab in the country in 2015, which will look at halal-compliant products based on herbal medicines and traditional remedies.

Biodiversity

Indeed, utilising Brunei Darussalam’s wide range of local and traditional medicines and foods is a key part of the strategy in terms of developing the food processing and pharmaceuticals industries, as is the employment of many species of plants found only in the unspoilt forests of the Sultanate. Indeed, the Institute for Biodiversity and Environmental Research in the remote jungle of north-west Borneo is a global leader in this field. The BIC thus provides an integrated halal development cluster.