January-February . 2025 | @ Halal

Indonesia sets sight on MENA halal market potential

The session featured industry experts and key representatives from Indonesia , Egypt , and Malaysia . It commenced with insights from the Minister Plenipotentiary Commercial and Embassy of Egypt , Wael Samir , who underscored Egypt ’ s strategic location as a gateway to the MENA region , a crucial point for Indonesian businesses to consider .

He emphasised that Egypt ’ s extensive network of trade agreements with 80 countries is a significant advantage for businesses operating there , providing them with easy access to diverse markets . This makes Egypt an attractive hub for Indonesian exporters and investors seeking to expand their reach beyond Southeast Asia .

Furthermore , there are tax incentives available to investors in Egypt .“ You can get a deduction and a five-year tax holiday in Egypt . Additionally , you can receive a tax rebate of up to 50 per cent of your investment ,” he added .

These incentives are part of Egypt ’ s efforts to attract foreign investment and can significantly reduce the cost of doing business in the country .

TRADE DYNAMICS

Recognising trade as a two-way street , Wael Samir stressed the importance of cultivating trade relations between Egypt and Indonesia . This means that efforts should be aimed at supporting Egyptian exporters entering the Indonesian market and facilitating opportunities for Indonesian exporters in Egypt .

He specifically highlighted Egypt ’ s dependence on palm oil , stating :“ Palm oil is not just a product , but a foundation for hundreds , if not thousands , of other products .

“ Egypt ’ s food and pharmaceutical industries , both major export sectors , heavily depend on palm oil , and local demand is very high . In fact , palm oil is Indonesia ’ s largest export to Egypt , exceeding US $ 1 billion annually .”

Following this remark , Fikrie Aldjoeffry , a market research expert , classified Indonesian products based on their performance and market trends in the Egyptian market :

• Winner Products : Besides palm oil , Egypt imports coffee , amounting to US $ 650 million annually . Other products include spices , charcoal , organic chemicals , pharmaceuticals , and sugar confectionery . These products are experiencing both increasing supply from Indonesia and rising imports into Egypt .

• Struggling Products : These are highdemand products , but Indonesian supply is declining . Examples include cocoa , rubber products ( e . g ., tyres ), and furniture . Despite Egypt ’ s growing import of these

Speakers sharing insights during the Q & A session .

Wael Samir Refnaldi Umar ( left ) and Yuliana Zahara Mega .

products from other countries , Indonesian supply has diminished .

• Supplier-First Products : Goods with rising Indonesian supply but declining demand in Egypt . These include footwear , apparel , and essential oils .

• Lost Products : Products such as fish and tobacco are facing reduced supply and demand , with tobacco experiencing a steep decline of 68 per cent in the Egyptian market . Fikrie believed that Egypt ’ s strong reputation in the MENA region could help revive struggling products : “ They are well-received across the Middle East , including Qatar and Saudi Arabia . They are also active in professional sectors . Therefore , fostering a strong relationship between Egypt and Indonesia is key .”

To boost profitability and competitiveness in the Egyptian market , Fikrie advised Indonesian businesses to address the challenges posed by international competitors . Key strategies include optimising costs in areas such as logistics and packaging alongside efforts to improve product quality . Regardless , a practical implementation of these strategies requires close collaboration with Egyptian partners .

NAVIGATING THE INDONESIAN MARKET

While many products offer good market potential in Indonesia , businesses are often met with obstacles when entering the Indo-

Fikrie Aldjoeffry nesian market . According to Perdana Chief Operating Officer ( COO ) Refnaldi Umar , these challenges are primarily caused by documentation requirements and misalignment with local market demands .

“ Documentation is often misunderstood . While online resources like Google offer guidance , entering the Indonesian market is a different challenge altogether . Managing the documentation process here is notably difficult ,” he remarked .

Halalin Chief Executive Officer ( CEO ) Yuliana Zahara Mega voiced similar concerns , underscoring the difficulties businesses face in complying with Indonesia ’ s regulatory framework . This includes halal certification , compliance with the Indonesian Food and Drug Authority ( BPOM ), and the Indonesian National Standard ( SNI ).

Penetrating the Indonesian market requires a deep understanding of local culture . This includes understanding not only religious customs but also consumer behaviour and preferences . With the Indonesian Government planning to extend mandatory halal certification to encompass cosmetics , medicines , textiles , and logistics by 2026 , compliance is becoming even more critical for market entry .

Collaborating with local organisations can offer invaluable insights into the cultural nuances of the Indonesian market . This allows the creation of products and marketing strategies that resonate deeply with local consumers . –