Malaysia: SMEs to access the global market

SMALL and medium enterprises (SMEs) have been advised to tap into the enormous potential offered by the multi-billion dollar global halal industry by getting a halal certification.

Halal Industry Development Corp Sdn Bhd (HDC) managing directorand chief executive officer Datuk Seri Jamil Bidin says the halal industry is diverse as it covers sectors like food, cosmetics, services, phamaceutical, tourism, healthcare and finance.

“It is a value proposition if your products come with a halal certification as it can be consumed by Muslims and there are 1.8 billion of them in the world,” he tells StarBizWeek in an interview. In short, the business potential is tremendous.

“The market size of the halal industry in Malaysia is estimated to be RM15bil. Ninety percent is contributed by the food industry while the growing halal sectors – cosmetic, phamaceutical and halal ingredients – should be capitalised by the SMEs,” he says.

Jamil says the halal industry is di verse as it covers sectors like food, cosmetics, services, phamaceutical, tourism, healthcare and finance.

The halal industry is one of the engines of growth for Malaysia’s economy as envisaged under the third Industrial Master Plan to promote the country as a global halal hub. It is expected to contribute 5.8% to the country’s gross domestic product by 2020 from less than 2% currently.

Established in 2006, HDC coordinates the overall development of the halal industry in Malaysia. Focusing on development of halal standards, audit and certification. Besides capacity building for halal products and services, it promotes participation and facilitates growth of Malaysian companies in the global halal market.

Jamil says the department of Islamic Development Malaysia (Jakim) is working on the certification for halal products while HDC is involved in the industry’s development such as capacity building among SMEs, halal investment promotion and training.

“The awareness of the halal certification has been improving over the last five years. The concerns among SMEs is on the understanding of halal certification and the importance of having it. We work closely with Jakim in promoting halal certification,” he says.

There are, however, certain requirements that businesses need to fulfill to secure a halal certificate. He says most SMEs may be put off by the process involved but it generally takes not more than 30 days if the companies submit all the required documents and information.

Halal is also about cleanliness and safety of the products this means they are safe for all A lot of restaurants can’t get the halal certification due to their (lack of) cleanliness,” he says.

He says SMEs that are interested to apply for the certification can consult Jakim or the HDC if they are not sure about the process, criteria and requirements.

Having said that, he points out that a halal certification on its own is not enough to succeed in the international market as there are other factors to be mindful of like pricing, product competitiveness and quality. “They have to concentrate in providing high value or value-added products to make it,” he says.

On the challenges for the halal industry in the world, he says: “We have many halal standards in the world set by different countries, and it is quite difficult to have just one standard across the world. My view is that this provides confusion for industry players.”

He suggests that countries work together to create a global standard for halal certification with Malaysia, adding that minor differences can be included as supplementary standards.

HDC has introduced the Halal Champion Company Programme (HCCP) aimed at giving recognition to Malaysian companies that have demonstrated a commitment towards promoting halal products and services.