Page 18 - Malaysia Food Business Directory 2020/2021
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                 MALAYSIA FOOD BUSINESS DIRECTORY 2020/2021 EDITORIAL
HALAL HIGHLIGHTS
Malaysia’s halal journey began decades ago, having a presence in this country since the early 1970s. But the industry’s development was gradual. It wasn’t until 2000 when the country’s first halal standard (MS1500:2000) was published, making Malaysia the first country to have a documented and systematic halal assurance system.
Today, many other halal certification bodies exist around the world, but Malaysia’s halal standard is widely accepted as stringent and comprehensive, making the iconic Malaysia Halal logo one of the most sought after, and certifying the country’s reputation as the world’s leading halal hub.
From a cottage industry, it grew from strength to strength to become a world leader. According to the Halal Development Corporation (HDC), Malaysia recorded a halal export value of RM40.2 billion in 2019, a slight increase from RM40 billion the previous year. Although the initial export forecast for 2020 was RM50 billion, this number will be beyond reach due to the crashing oil prices, the decline in palm oil demand and the COVID-19 crisis. HDC has revised the export figure to RM42 billion but is confident that with strategic programmes, the industry will stay resilient.
The current economic condition notwithstanding, the halal industry is one of the fastest growing consumer segments in the world. The global halal industry, currently at about US$3 trillion (RM12.9 trillion), is expected to reach US$9.71 trillion (RM41.7 trillion) by 2025. At home, Malaysia’s halal industry market value is estimated to reach RM614.36 billion by 2025.
The big gap between the global and Malaysian halal numbers is a clear indication that there is plenty of room to grow for local halal industry players. Malaysia’s position as a global halal player presents a huge opportunity for local companies, which consist of about 98% Small and Medium-sized Enterprises (SMEs), to capitalise on the growing market. Local producers must rise up to the challenge to meet this demand.
What needs to be done? First, SMEs, most of which are owned by Bumiputras, operate without a halal certificate. Many are held back by the meticulous certification process put in place by the Department of Islamic Development Malaysia (JAKIM), the country’s halal certification body. These SMEs would need to familiarise themselves with the requirements and ensure they meet JAKIM’s high standards so that the process is smooth sailing. Certification is a crucial element, especially in the food and beverage business, as it promotes trust and safety amongst customers.
Certification alone, however, is not enough. To participate in the global halal market, companies themselves need to reassess the way they run their business and endeavour to be more innovative, proactive, customer oriented and be willing to take more risks.
Another issue that SMEs face is the lack of capacity to produce halal-certified products on a large scale. Here is where schemes such as the Halal Sourcing Partnership Programme introduced by the HDC can help companies realise their full potential. It works by providing opportunities to SMEs to collaborate with large Malaysian companies as well as multinational corporations by becoming suppliers. At the 11th World Halal Conference held in 2019, a memorandum of agreement was signed between the HDC and F&N Beverages Manufacturing Sdn Bhd to give SMEs in the halal industry an international boost.
The upsurge in the halal industry around the world is not only due to growth in Muslim-majority countries. Halal is transcending religion. Non-Muslim-majority countries are also jumping on the bandwagon. Many non-Muslim countries, such as Australia, New Zealand and Brazil, are halal food producers. It just makes good business sense to cater to the growing global Muslim population. Taiwan, for example, is now producing its popular bubble tea using halal ingredients, making it attractive for Muslim consumers around the world.
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