The Tokyo-based company — which has seen continuous growth in recent years, and a net profit margin of 9.91% in Q3 2017 — plans to act upon the growing global demand for halal food products and the opportunities it brings.
The Nikkei Asian Review said that this demand comes from both restaurants as well as food seasoning firms.
This strategic move could prompt others in the sugar or sweeteners production segment to follow the banner.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) had stated that sugar consumption in the Northeast Asian nation is falling.
The decline is said to be due to consumers in a society with good health knowledge and consciousness, who are avoiding sugar.
Despite this, the increasing number of visitors to Japan from Muslim countries (including in the lead up to the Tokyo 2020 Summer Olympics) has seen greater demand for halal food, both from halal offerings at food service establishments and food products made by Japanese food firms.
The process of refining of sugar usually utilises bone char from animals — produced by burning the bones in the deficiency of oxygen — which allows the removal of pigments, ash and other impurities in the sugar. However, this method is not compliant with Islamic dietary laws.
To cater to the halal market, Mitsui Sugar has decided to entirely eliminate bone char from its sugar production processes. Instead, it will use filtration with activated charcoal.
Costs and savings
The required changes to Mitsui Sugar's 10 refining units in Fukuoka, Southwest Japan, will cost the company around ¥850m (US$7.63m). The new halal-suitable production units will be operational from mid-2018.
On the other hand, according to the company, the change to the use of activated carbon in the filtration process will also reduce sugar production costs by about ¥100m (close to US$900,000) per year, thanks to reductions in water and electricity — from the higher absorption of activated charcoal.
Mitsui Sugar has 939 employees. The company’s sugars segment produces and markets raw and refined sugars and sugar products, while the food ingredients segment manufactures and sells functional sweeteners, food colours, seasonings, sugar cane extracts, agar and bio products.
The company will be present at Food Ingredients Asia in Jakarta in October, showcasing its Spoon brand molasses extract, and it will now doubt be keen to exploit halal opportunities in the Southeast Asian market too.