| Halal Health | january-february , 2021 | The Health
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Riding the pandemic
Halal pharmaceutical industry should be better-prepared when growth returns
BY KHIRTINI K KUMARAN
The Covid-19 pandemic has severely
disrupted the global economy as well as the Islamic economy .
Some of the top exporting countries in the world have been adversely affected by the Covid-19 pandemic . Manufacturing , production , and logistics have been disrupted , affecting the global supply chain .
“ There was a lot of uncertainty earlier , but now that the signs of the vaccines are much clearer , our confidence in the sector and industry is bouncing back ,” Dinar Standard CEO and Managing Director Rafi-uddin Shikoh told The Health .
“ Our projection of the growth returning towards the end of 2021 is further strengthened .”
Based on the post-Covid projection , recovery to 2019 levels is expected in 2021 . Muslim consumer spending in the pharmaceuticals sector could increase at a five-year Compound Annual Growth Rate ( CAGR ) of 2.3 per cent to reach US $ 105 billion by 2024 .
“ Even though the percentage indicates growth , it is bringing it back from the losses we have suffered . So , from an aggregate value of the industry , the industry is going to see a loss , compared to the pre-Covid projection , which was at 5.7 per cent CAGR growth .”
The global Muslim consumer spending on halal pharmaceuticals saw an increase by 2.3 per cent from US $ 92 billion in 2018 to US $ 94 billion in 2019 , according to the ‘ State of the Global Islamic Economy ( SGIE ) Report 2020 / 21 : Thriving in Uncertainty ’.
In 2020 , however , the Muslim spending saw a drop by 6.9 per cent , reaching US $ 87 billion . Perseverance is the key now . How can the pharmaceutical industry persevere , to hold on and be better prepared as the growth returns ?
“ First and foremost , the focus has to be on surviving until you get back to a demand cycle that was there before .
“ It would help if you looked to innovate and address some of these opportunities that are coming up ,” he said
Moving towards digital transformation
Within the pandemic disruptions , the SGIE report identified several developments and opportunities for halal pharmaceuticals . While there was a general drop in demand , the preventative care segment
saw a surge in demand for nutritional supplements and vitamins because of the renewed focus on immunity and good health .
There was also a shift in the global supply chain as four of the top five exporters for halal products were heavily-impacted by Covid-19 .
“ Many Organisation of Islamic Cooperation ( OIC ) importing countries are looking for an alternative for to the supply chain . And so , there is growth at the government level to invest in local manufacturing or alternative sources for supplies from the regional markets , especially Indonesia and Saudi Arabia .
“ Another area is telemedicine . As we see , the industry is moving towards digital transformation , digital distribution , the digital aspect of retail , and new ways to reach the customers .
“ It includes even the doctors or the
clinics , who are the first point of distribution for pharmaceutical products , engaging with customers through digital platforms or further supporting them through digital platforms .”
Rafi-uddin also highlighted that with touchless and contactless being key areas , going digital was vital for the medical service providers as well .
There is also growth in sub-segments , such as online retail and distributions .
“ In pharmaceuticals , we see the growth similar to how online groceries have taken up and every aspect of digital delivery of services has taken up .”
Based on the SGIE report country indicator , Malaysia has a robust pharmaceutical or halal pharmaceuticals ecosystem .
“ We have a country benchmarking , and Malaysia , in pharmaceuticals and cosmetics as an aggregate indicator , continues to rank number one .”
Rafi-uddin credits it to Malaysia ’ s healthy and high quality regulatory and compliance systems around halal pharmaceuticals , as well as a beneficial and far-reaching awareness across the halal pharmaceutical industry .
Global supply chain disruption an opportunity
He , however , noted when it came to trade and export , Malaysia was not in the top five of halal pharmaceutical exports , nor was it in a consumption size point .
“ Malaysia ranks 19th in the world in exports of halal products , food , pharmaceuticals and cosmetics , which is only 1.7 per cent of the US $ 255 billion of worldwide exports .
“ So , for Malaysia and the pharmaceutical space , the disruption in the global supply chain is an opportunity area ,” he said .
He highlighted that apart from attracting Foreign Direct Investment ( FDI ) into Malaysia , another opportunity for Malaysian companies would be how Malaysia could take its expertise to markets like Indonesia and Saudi Arabia . They are looking for partners to do their domestic manufacturing there .
“ There are lots of opportunities for pharmaceutical manufacturers from Malaysia . The country has strong technical expertise which it can bring to other OIC countries or Islamic markets .”
The SGIE report was produced by DinarStandard , a US-based research and advisory firm , and supported by the Dubai Islamic Economy Development Center .
Since 2013 , the report , now in its eighth edition , has been providing information on seven key sectors whose core products and services are affected by Islamic law and which represent a global consumption market . — The Health