Malaysia: Innovation And Premium Halal Products Key To Becoming Halal Industry Hub

By Mohd Khairi Idham Amran

KUALA LUMPUR, Dec 21 (Bernama) — Malaysia needs to leverage on innovation and focus on producing premium halal products if it wants to realise its ambition of becoming a hub for the global halal industry, says an industry member.

Halal Industry Development Corp’s managing director cum chief executive officer, Datuk Seri Jamil Bidin said the country needs to produce premium halal products to differentiate itself from the producers of mass products.

“If we focus on mass products, China and Thailand have the advantage as they are more productive,” he told Bernama.

He said Malaysia would have to leverage on innovation of halal products and turn the country into a place for value added activities of halal products including imported products.

“We need to be a centre of excellence to carry out and promote innovation of halal products.”

The country already has the potential of becoming a hub for the industry as it has the infrastructure and the right ecosystem but there are several challenges it must address before it can achieve the ambition, Jamil said.

“We have advantages compared to other countries such as China and Thailand as we provide a complete ecosystem (product and services) while others only produce halal products but do not have the services or vice versa,” he said.

Among the services provided by Malaysia include halal logistics, Islamic finance and Islamic healthcare.

Jamil said the basic industries by sectors must be strengthened before the country moves towards becoming a hub.

Citing the example of halal food, he said the country would have to strengthen the area if the wanted to become a hub for the halal food industry.

“Currently, our food production is still low. We import RM30 billion worth of food annually while exporting RM18 billion.”

That’s a huge gap that still needs to be overcome, he pointed out.

Addressing the issue of lack of integration between the halal industry and Islamic finance sector, he said the problem was due to the inconsistent development between the sector and the industry.

He said there should be a greater effort to promote Islamic finance among industry players to strengthen the cooperation between industry players and Islamic financial institutions.

“Islamic banking is one of the pillars to support the industry. The problem arises due to a lack of awareness among industry players on Islamic finance,” he said.

On another note, Jamil said the government’s decision to appoint Jabatan Kemajuan Islam Malaysia (Jakim) as the sole issuer of halal certificate in Malaysia was not expected to affect the industry’s growth next year.

The appointment shouldn’t be viewed as a monopoly by the body but as an effort to protect consumers and prevent confusion among buyers, he said.

If there are many issuers, the specification will vary according to the organisations and there would differences between the issuing bodies, and this in turn would reduce consumers’ confidence in the certificate, he said.

However, Jakim as the authority appointed by the government has to play its role to assist businesses to do their business without disturbance while complying to the halal regulation, he said.

“We at HDC can assist Jakim in doing so through our experience in dealing with businesses as well as promoter of the halal industry.”

On the performance of the industry, Jamil said the halal industry recorded a tremendous growth with export of halal products accounting for 10 per cent of the country’s total exports.

It has managed to get other countries to recognise Malaysia as a leader of the industry as well, he said.

“Countries such as China, Japan and France are looking for us to develop the halal industry in their country.”

These countries have the resources but don’t have the expertise on halal products and their interest means that halal products are gaining more interest from non-Muslim countries, he said.

Currently, the global demand for halal products is valued at about RM7 trillion from a population of 1.8 billion Muslims.

Against this, Jamil said the supply of halal products was still low, and Malaysian businesses must take the opportunity by strengthening their companies to face a tighter demand specifications from the developed countries.

“These are the challenges we face right now. To polish local players so that they are more prepared to compete in the global scene,” he said.

In 2011, the industry managed to attract more than RM1 billion in foreign direct investments into the country.