New Malaysia Halal Council will consolidate, reconcile and resolve industry issues - HDC chief

KUALA LUMPUR - Malaysia’s new Halal Council (MHC) will provide a stronger and unified platform for the development of the country’s halal industry, key stakeholders told Salaam Gateway.

The new Council, announced by Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi last week, consolidates the work of three main agencies that have been overseeing the development of Malaysia’s halal industry—the Department of Islamic Advancement of Malaysia (JAKIM), which is in charge of certification and Shariah-related issues; Standards Malaysia, the agency under the Ministry of Science, Technology and Innovation that develops halal standards and acts as the national accreditation body; and the Halal Industry Development Corporation (HDC), whose remit includes the promotion and internationalisation of the country’s halal industry.

MHC will also consist of stakeholders that were previously not directly involved in the halal industry. These include the Ministries of Health; Agriculture and Agro-based Industry; Domestic Trade, Co-operatives and Consumerism; and Education.

“To develop halal in a more integrated and holistic manner, we need a platform like [the] MHC, where all initiatives can be placed together to consolidate, reconcile, [and] resolve issues to move forward,” HDC CEO Dato Seri Jamil Bidin told Salaam Gateway.

Most industry players are optimistic and welcome the move. They expect Deputy Prime Minister Hamidi, who has been a strong advocate of the halal industry, to give it a renewed boost.

“To move something, you need [a] leader. [Before this], the halal opportunity was there, but it was not as important. Now, with [the deputy prime minister] as the head of [the] council, a sense of strong leadership is there, and that is positive progress for the industry to kickstart the year,” said Datuk Shukri Abdullah, CEO of Malaysia International Halal Showcase (MIHAS).

MIHAS is an annual trade fair hosted by the Ministry of International Trade and Industry (MITI) and organised by the Malaysia External Trade Development Corporation (Matrade).

“I also hope MHC will work closely with industry players and listen to their grouses and feedback,” Abdullah added.

FOCUS AREAS

Halal industry stakeholders are keen to see MHC focus on a few key areas: supporting entrepreneurs, positioning Malaysia as a leader in the global halal market, increased resource allocation for advertising and marketing, and funding/financing for growth and development.

The most pressing need lies with the development and support of small and medium-sized enterprises (SMEs). Most of the producers of halal products in Malaysia are SMEs that lack the capacity to meet the demand of the global halal market.

Industry players suggest big corporations and SMEs create strategic collaborations to respond to the rising global demand for halal products and services as a priority for the new MHC.

By sector, Malaysia hopes to gain a stronger foothold within the global halal industry in four in particular: food products, ingredients, cosmetics and personal care, and pharmaceuticals.

“We are pretty strong in halal cosmetics and personal care. Last year, export of these products alone totaled 2.5 billion ringgit,” said Jamil. This is roughly 6 percent of Malaysia’s halal exports in 2015.

HALAL TRADE

Overall, halal exports reached 42 billion ringgit ($10 billion) last year. HDC would like this number to rise to 50 billion ringgit ($12 billion) this year—a growth of 19 percent. This is an ambitious goal considering the much lower 10.5 percent growth in halal exports from 2014 to 2015.

A growth market the HDC is targeting lies in halal trade with non-Muslim countries that are responding to the increasing demand for halal products and services. Four of Malaysia’s top five halal export markets for the first nine months of last year were non-Muslim countries – China, Singapore, U.S., and the Netherlands. Indonesia completes the list.

HDC is particularly hoping to attract Korean and Japanese investors to set up their bases in Malaysia as a gateway to the halal market.

ON THE RIGHT TRACK

Jamil noted that Malaysia has come a long way since 2006, when the HDC was established to promote participation and facilitate growth of Malaysian companies in the global halal market. There was also the recognition at the time that having a strong halal standard alone does not bring trade value to the economy without the right infrastructure and a halal ecosystem. Since then, the government has embarked on many initiatives to promote the industry.

Halal Parks has been one such national initiative. Malaysia has 21 Halal Parks, of which 13 are endorsed by the HALMAS certification, accorded to Halal Park operators that have successfully complied with the requirements and guidelines stipulated by the HDC. Overall, Halal Parks have generated an investment of around 15 billion ringgit to date.

JAKIM-driven halal certification, which started in 2002 when the government body took over from a government-appointed company, is well-accepted internationally and the agency has begun exporting its knowledge and expertise to countries that are setting up their own halal certification processes.

Halal industry promotion has also stimulated the jobs market – approximately 285,000 jobs were created in the country over the last five years as a direct result of halal initiatives.

The formation of the MHC comes at just the right moment to further accelerate and coordinate growth of the halal industry.

A special Act on the Council will be formulated by the Ministry of International Trade and Industry as well as JAKIM. MHC has about a month to draft its framework before submitting it to Cabinet for approval.

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