Korean firms set sights on Indonesia’s halal food market

Customers line up at the Kuningan branch of “Cheese & Dough,” a pizza franchise that Lotte Mart operates under its own brand with MUI certification, a halal certification in Indonesia. [Courtesy of Lotte Mart]

South Korea’s food industry ramping up efforts to tap Indonesia’s booming halal food market. The recent signing of a Memorandum of Understanding (MOU) between the two countries during a summit sparked optimism about expanding companies’ presence in Indonesia due to a potential easing in halal food certification standards.

Indonesia, with a population of 277 million, is the world’s largest Muslim-majority country and its halal food market is estimated to be worth 300 trillion won ($225 billion) annually.

To enter the Indonesian food market, Korean companies must obtain certification from the Indonesian Ulema Council (MUI). However, obtaining MUI certification involves various complex procedures, including inviting Indonesian officials to production facilities periodically for product-specific certification. This process has been cumbersome, impacting the companies’ operational efficiency and increasing costs. Industry insiders anticipate that the recent MOU will likely lead to more streamlined halal certification processes, aligning the certification procedure in both countries.

Daesang Corporation, a Korean company that has had business operations in Indonesia since 1973, has already obtained MUI certification for various products, including kimchi and local brand ‘Mama Suka’ soybean oil and instant coffee. In 2021, Daesang generated about 436 billion won in revenue from Indonesia, accounting for 37 percent of its total overseas sales of 1.17 trillion won. Daesang plans to raise its local sales target to 1.4 trillion won by 2030, making Indonesia the focal point of its overseas expansion.

Other Korean companies, including Nongshim and Samyang, are also aiming to increase their presence in the Indonesian market with MUI-certified products. Samyang, renowned for its spicy noodles, has obtained MUI certification for over 30 products, capitalizing on the popularity of the “Buldak-Bokkeum-Myeon,” or Korean Fire Noodle, in Southeast Asia. Nongshim, which exports noodles to about 40 Arab countries, intends to increase its exports to Indonesia in the coming months.

In May, GoPizza founded the Parbake Innovation Center for dough R&D and production in Indonesia and became the first South Korean pizza brand to obtain MUI certification there last month. The company remained optimistic, stating that transitioning into a halal brand could lead to a 15-25 percent increase in sales, particularly in countries with large Muslim populations such as Indonesia and Singapore.