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"HALAL INDUSTRY: WHAT'S IN IT FOR SMEs?"

Wednesday, 12 September 2018 10:12 Forum 448 Views

Halal at a Glance

Halal is an Arabic word meaning permitted or lawful.

The opposite of halal is haram, which means prohibited or unlawful. Halal and haram are universal terms that apply to all facets of life. Both terms are commonly used in relation to all food products in any form, meat products and its by-products, consumer good including cosmetics, personal care products, pharmaceuticals, and food contact materials and abattoirs. The terms may also be used in the process of trade or commerce as an aspect of trading or part of an aspect of trading for the referred food. They are also applicable to activities in the services sector.

 

Growth of Halal Market – Malaysia and beyond

The introduction of Halal Industry Master Plan (2008-2020) blueprint is ultimately aimed at achieving the country’s economic objective of becoming the global leader in innovation, production and trade in the halal sectors. As a leading global halal hub, Malaysia halal product export is poised to grow by 5% year-on-year to RM45 billion in 2018 from RM43.39 billion in 2017. At the same time attracting investment in excess of RM13 billion ringgit in HALMAS-certified halal parks under Halal Industry Development Corporation (HDC). In addition, a total of 28,000 jobs were created. This is expected to grow exponentially, with the global Muslim population currently at 1.8 billion and growing.

Therefore, as Malaysia aim to hit RM50 billion worth of halal export in 2020 – and more – extensive collaboration between countries, government agencies and private sectors including SMEs are crucial. The above-mentioned blueprints are key to that success.

Consider this. The global halal market - with some estimates putting it at present at USD2.3 trillion in food and non-food sector - is indeed a big business. The fact that it is driven by the growing purchasing power as well as increased awareness of halal benefits among both Muslims and non-Muslims, presents a truly exciting opportunity for Malaysian SMEs to serve the global market and ultimately cement Malaysia’s status as a leading global halal hub. The next statement shows the huge potential for Malaysian SMEs to participate in the global halal market. In 2016, Malaysian SMEs only contributed RM4.01 billion out of the RM42 billion worth of total exports that was recorded. This was highlighted by the then Deputy Prime Minister in a dialogue organised by HDC last year.

Therefore, a concerted effort is needed in ensuring Malaysia achieve its goals. Through Government-formulated strategic framework such as Halal Industry Master Plan (HIMP) and other various handholding programmes, the local SMEs stand to gain enormously as some of the key areas covered will include the narrowing down of the existing gaps in the halal industry, strengthening capacity building and enhancing capabilities of local halal companies through Halal Enterprise Development programmes.

 

Halal Initiatives and Policies in General – A Malaysian Perspective

Various collaboration with relevant Ministries and Agencies namely Jabatan Kemajuan Islam Malaysia (JAKIM), Standards Malaysia, SME Corp. Malaysia and Malaysian Investment Development Authority (MIDA) have helped push the Malaysian Halal Standard to be recognised and accepted at the global stage. In fact, through the initiative by the Ministry of International Trade and Industry (MITI), Malaysian Halal Standard is actively promoted to be used as a benchmark for the International Halal Standard.

Although not compulsory in the Malaysian context, adopting Malaysian Halal Standard is encouraged by the Government due to massive economic benefits it will bring to the nation, while catering to the need of Muslims and non-Muslims alike everywhere – in Malaysia and abroad. For instance, once a food and beverage producer decides to go Halal, they then must satisfy a number of guidelines, which is available at http://www.hdcglobal.com/ and www.halal.gov.my. Upon meeting all the requirements, they will be awarded with the Malaysian Halal Logo, which is issued by JAKIM, State Islamic Affairs Department as well as State Islamic Affairs Council.

 


 

 

Source of article:

 

Izham Shah Datuk Arif Shah. (2016). Growth of the Halal Industry https://www.malaymail.com/s/1241665/growth-of-the-halal-industry

 

Islamic Council of Victoria. (2016). What is Halal? A Guide for Non-Muslims. https://www.icv.org.au/about/about-islam-overview/what-is-halal-a-guide-for-non-muslims/ 

 

Halal Malaysia Official Portal. Definition of Halal. http://www.halal.gov.my/v4/index.php?data=bW9kdWxlcy9uZXdzOzs7Ow==&utama=panduan&ids=gp1;

 

The Edge Markets. (2018). Malaysia continues to lead Global Islamic Economy Indicator for fifth year. http://www.theedgemarkets.com/article/malaysia-continues-lead-global-islamic-economy-indicator-fifth-year

 

New Straits Times. (2018). Malaysia eyes RM50b halal exports in 2020 https://www.nst.com.my/business/2017/08/271634/malaysia-eyes-rm50b-halal-exports-2020

 

Halal Focus (2017). MNCs, big firms should help SMEs involved in Halal products https://halalfocus.net/malaysia-mncs-big-firms-should-help-smes-involved-in-halal-products/

 

 

Last modified on Tuesday, 18 September 2018 09:54

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