Exporting lamb to the Saudi Arabian Market

Introduction
Samex Australian Meat Company is a long established Meat Trading Company based in Australia & it has been supplying the finest quality Beef / Lamb / Mutton & Goat to a wide variety of markets around the world.Samex was established in 1978 in Australia and quickly become one of the country’s principal meat trading companies. An extensive supply network means Samex can source everything from high-value chilled lamb and beef via airfreight to bulk mutton & goat shipments all Halal Certified products for Middle East markets. Samex had developed live sheep export trade over the years, but it had been under struggle for many years because of ethical issues related to the trade. Some important customers were found live sheep in the Middle East who preferred to process the meat themselves. When pressure groups attacked the trade as unethical Problems arose. It made worse when the Egyptian government did not accept a shipment of live sheep because it claimed the sheep were in poor condition.
Among the customers Governments in the Middle East that require highly efficient, time critical deliveries for their armed forces. Another important point of difference at Samex, it is well-known global retail sector. Company’s founders were master butchers and have invested extensive market research in producing meat products valued by the consumer.
It also provides in-house shipping and export documentation department’s who work closely with the Australian Quarantine and Inspection Service (AQIS) and the equivalent authorities in countries to meet all export requirements.

1. Discuss the cultural imperatives of the Saudi Arabian market.
Culture is a highly important aspect of a market, whatever that market is.Thus the following cultural imperatives should be taken into account in termsof the entry to the Saudi Arabian market.
RELIGION-Religion an important element of culture of Islam in Saudi Arabia, which is practiced by all Saudis and governs their personal, political,economic and legal lives.Indeed, when culture is mixed with religion, and when it implies as many rules as Islam does, it should really not be taken not seriously enough. These imperatives, all ruled by the Islamic laws, are of three kinds. The first ones are physical, implying that the sheep must be healthy, pure during its whole life before being slaughtered and not have any disease. Then come process oriented imperatives, which involve that during the whole process of the lamb production, the sheep must remain “Halal”. The last imperatives concern the slaughter of the sheep. The lamb must be facing Mecca when being slaughtered, the name of God must be pronounced, the slaughter man must use a stainless knife, and the blood must be drained. Applying to exporting lamb to this market, it is acknowledged that lamb meat has a long history of consumption with the Islamic religion and has become an important part of the cultural heritage and tradition of the Arabs.
SOCIAL INSTITUTION-Then, the family is the most important social institution in Saudi Arabia. For Saudis generally, the family is the primary basis of identity and status for the individual and the immediate focus of individual loyalty. Saudis take their responsibilities to their family quite seriously. Families tend to be large and the extended family is quite close. The individual derives a social network and assistance in times of need from the family. Nepotism is considered a good thing, since it implies that employing people one knows and trusts is of primary importance. Families form alignments with other families sharing common interests and life styles, and individuals tend to socialize within the circle of these families

alliances. One particular point of the families in Saudi Arabia, like families throughout the Middle East, tend to be patriarchal, the father in the family appearing as an authoritarian figure at the top of a hierarchy based on age and sex. Gender segregation is also a severe phenomenon in Saudi Arabia.
EDUCATION- Education, as an element of culture, in Saudi Arabia has never been fully separated from its Islamic roots. The education policy of Saudi Arabia included among its objectives the promotion of the "belief in the One God, Islamas the way of life, and Muhammad as God's Messenger." Similarly, stemmed from the religious and social imperative of gender segregation, inequalities of opportunity exist in higher education. In this sense, the target consumers should be mostly focused on those people who are female and enjoy high reputations within every social structure. Also, the religious standards, in harmony with Islam, of dealing with lamb should be paid more attention.

2. To what extent are the costs of conforming to halal requirements likely to render the Australian product uncompetitive in Saudi Arabia?
1. Expertise: There are costs to the processing plant to obtain Halal certification and for Islamic inspectors to approve the Halal process. Other implications are that labour is discriminatory as slaughter men must be Muslim. Many food processors don’t want the added cost of producing both Halal and non Halal so they standardise on Halal only, even though only about 2% of Australians are Muslims. Funds paid to Islamic organizations in this way can be used to promote Islam and even fund Jihad.
The first major implication to the consumer is that there is no choice and that the added costs of Halal certification and Islamic inspectors are passed on as higher food prices, even though the majority of Australians don’t want Halal products.
2. Condition of the live lamb:-There are costs of preservation of live lamb especially on live lamb condition. These costs are through many ways like foods, places and transportation of live lamb.

3. Process: Muslim Slaighterman operates a sharp mechanical knife to cut in front of the neck through the skin, trachea, oesophagus and major blood vessels, without severing the entire neck. The slaughter man also backs up the mechanical knife and slaughters by hand any chicken which may miss the blade. The slaughtering results in through of bleeding of the chicken where the blood is fully drained from the carcass before any processing. The lambs are completely dead before scolding in hot water and further processing. All these process takes lot of halal cost.
4. Labelling: It is important that halal meat should be halal mark, so labelling process takes lot of cost. Halal meat should be trademarks as halal mark. By this every export company easily find difference among every type of meat.
Considering the present lamb market in Saudi Arabia, which is already quite important (26.6% of the Meat market share), and the present competitors on the market, who offer medium priced products, it might even be difficult to gain a satisfactory market share there. But adding the additional cost featured in the adaptation to Halal requirements, Australian lamb might even become highly uncompetitive. However, on the other hand, considering the production market in Saudi Arabia compared with the Australian one, conforming to Halal requirements will only need to adapt certain conditions. And once the adaptation is first achieved, the whole production process will become easier. Although, it will cost more to process/product, the massive production will bring economies of scale.It is necessary for Australia market to follow halal requirements to enhance the production and export process. Saudi Arabia market has basic requirement of halal meat, so lamb should be halal firstly if Australia market want product competitions. 3.Given the rise of Islamic fundamentalism in an increasing number of countries,including some in Asia, does expertise in halal killing provide Australia with along­term competitive advantage?

Ans: Yes, it is certified halal butchers, local Muslim can check It.Samex Company should be a member of Muslim group. Doctor can check meat in routine life.The advantage of the cultural imperatives in Saudi Arabia evoked earlier is that they are based on religious beliefs, which are the same all around the world for the whole Muslim population.Therefore,once the production process adaptation is done, the production/process remains the same in all these different countries.
In other words, if Australian exports were to intend to export to another Islamic country, they will already have the skills, experience and knowledge of how to deal with that production. Australian exports ensure that lamb should be halal hall mark.

4.What are the advantages and disadvantages of halal slaughter in comparison with live sheep exports?
Advantages of Halal slaughter:- They are also supposed to be slaughtered at the neck, in one clean cut, so that they die right then and there. The knife must be very sharp so that they do not suffer from having to feel the pain. Also, cutting from the neck lets all the blood drain out, so that we do not have meat that can harm us in any way.
Disadvantages of Halal slaughter: It is also expensive because of maintanace.It is necessary to look after all meat so maintenance is big problem of it.
Advantages of Live lamb export:-Firstly, It has major benefit of live lamb export that there are no worries with halal process.Secondly, there is more opportunities to export live lamb in big amount by ship transportation.Thirdly,Warehousing is no problem in live lamb export and lastly, there is no extra cost for maintenance as compared to halal export.
Disadvantages of Live lamb export: The big disadvantage of live lamb that warehousing cost. Live lamb takes lot of shelter, so warehousing is long term cost.

5. If you were promoting Australian chilled lamb in Saudi Arabia, what aspects would you focus on in your advertising?
The demand for Australian chilled lamb is determined by the interaction of several factors. These include: * Economic growth and purchasing power of Saudi Arabia * Population and consumer income levels of Saudi Arabia * Dietary preferences related to consumer’s cultural tradition * Competition from alternative meats in Saudi Arabia * Trade policy arrangements and government intervention.
In the global environment in which Australian firms currently operate it is essential that exporters be aware of the subtle impact that culture has on exporting goods and services to countries with vastly different religious beliefs, behavior patterns and business customs and practices. Not only does culture impact on the product itself but cultural preferences impact directly on the production process. These factors are illustrated in the case of the emerging market for lamb in Saudi Arabia—here the religious beliefs of the population require adaptations to the way in which lamb is both produced and processed.
There are three stipulations for a lamb product to be considered halal:
1. It must be free of any substance or ingredient taken or extracted from a haram animal or ingredient.
2. It must be made, processed, produced, manufactured and/or stored using utensils, equipment and/or machinery that has been cleansed according to Islamic law.
3. It must never come into contact with, or be close to, a haram product during preparation, making, production, manufacture, processing and storage

References
Retrieved from http://www.businessworld-magazine.com/?p=952
Retrieved from http://www.islamqa.com
Retrieved from http://www.samex.co.nz/case-studies.aspx
Retrieved from http://wps.pearsoned.com.au/wps/media/objects/10810/11070031/Exporting_Lamb.pdf Retrieved from
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