US$2.1 trillion halal market waiting to be tapped

The Edge Daily: A big chunk of the local and global halal products and services market is still waiting to be tapped by Malaysian SMEs, said Halal Industry Development Corporation (HDC) managing director and chief executive officer Datuk Jamil Bidin.

But first they have to overcome the obstacles such as the international standards — HACCP (Hazard Analysis and Critical Control Point) and GMP (General Manufacturing Practice) — which many local SMEs failed to meet.

In an exclusive interview with The Edge Financial Daily recently, Jamil said the global market for halal products and services was worth some US$2.1 trillion (RM6.9 trillion) a year.

“The demand among Muslim countries is already high, not to mention demand among the Muslim population in non-Muslim countries such as Russia, India and China. These non-Muslim countries are emerging markets for halal products and services.

“There is a smaller Muslim population in the US and Europe but they have a stronger purchasing power,” said Jamil, adding that all these were waiting to be tapped by Malaysian SMEs.

Speaking of the local halal arena, Jamil said the prospect was encouraging as some multinational companies (MNCs) needed lots of halal raw ingredients for their products, the demand of which could not be met by local SMEs.

“Nestle, the biggest food product maker in the world, needs some one billion tonnes of emulsifiers a year in Malaysia. Our SMEs are hardly able to meet this demand. Tesco has to import emulsifiers due to the same reason,” he said.

Jamil said halal ingredients for food products, which is worth RM30 billion annually worldwide, were a new focus for HDC. For example, 90% of the world’s supply of gelatin, which is usually extracted from animals, is non-halal.

“Our country is rich in palm oil. Gelatin can also be made of seaweed and palm oil. This is also an area of opportunity we are helping our SMEs to explore,” he said.

To help SMEs gain access to the global market, the HDC has initiated measures to help them build capacity and meet international standards such as GMP and HACCP.

On the local front, the HDC is carrying out a mentoring programme, assisting potential halal suppliers to do business with MNCs such as Nestle.

Besides catering for the needs of the 1.8 billion Muslims worldwide, Jamil said the halal industry was also an emerging market force that attracted non-Muslims via its hygiene and contamination-free principles in food production.

According to him, the halal food sector alone is worth US$547 billion a year. Jamil also said that only one of 86 Kosher products in the US was halal.

Jamil said HDC, wholly-owned by the Ministry of Finance, would focus on strengthening specific sectors in the diverse halal industry such as specialty processed food, cosmetics and personal-care products, halal ingredients and livestock.

Malaysia’s competitive advantages in developing and promoting its halal industry included its halal certification, which is one of the longest established standards, while the Malaysian halal logo is the most widely recognised in the world.

“This is part of the halal industry master plan, we are currently in phase one where we will see Malaysia establish itself as a global leader in Halal Integrity by 2010,” he said.

Jamil added that the key strategies to drive the growth of the industry included consolidation, elevation of industry standards, better innovation capabilities, global network connection and brand strengthening.

“Come 2020, we shall have 1,600 export-ready and 50 world-class SMEs, 12 new global companies, 90 new international halal certifications, global leader in the fields of halal ingredients and innovation, state halal parks will be in full operation and to have the Malaysian halal logo recognised and accepted worldwide,” he said.