The Malaysian Reserve

Powering the Halal Silk Route

Azman Shah (seated fourth from left) and the Malaysian delegation at the launch of the Malaysia-China Halal Silk Route Showcase on May 14, 2018

The active collaboration between Northport, Kontena Nasional and Weifang Sime Darby Port is set to change the logistics landscape between Malaysia and China

By HABHAJAN SINGH

One phone call, one price and one stop centre to send halal goods from Malaysia to China.

That is the deal cobbled together by a consortium of logistics players with a keen eye to expand their presence in the China halal market. And they are willing to put their money where their mouth is.

“Our pricing is lower than the usual pricing. We will see profit in the volume to come. If we go for quick profits, there will be no repeat customers,” Northport (M) Bhd CEO Datuk Azman Shah Mohd Yusof tells a group of businessmen gathered at a recent trade talk in Kuala Lumpur.

He was making a pitch that would see Malaysia sit at the centre of what they are calling the Halal Silk Route initiative. The initiative has been badged as the missing link that will complete the halal trade value chain globally.

Northport and Kontena Nasional Bhd, both subsidiaries of MMC Port Holdings Sdn Bhd, Malaysia’s largest port operators, are leading the charge for the ground-breaking initiative, together with Weifang Sime Darby Port Co Ltd.

They promise customers port-to-port delivery in 28 days, with goods shipped from Northport in Port Klang to Weifang Port, which is one of the most direct routes to the Muslim-majority China regions of Shaanxi, Ningxia, Qinghai, Gansu and Xinjiang.

Serunai Commerce CEO Amnah Shaari (left) exchanging MoU documents with Azman Shah on Aug 27, 2018, to create a seamless and integrated logistics system. At the back, (from left) Northport corporate services head Azman Mohamed, International Halal Foundation council member Datuk Dr Hafsah Hashim, Jakim halal hub division director Datuk Dr Sirajuddin Suhaimee, GAE Resources Sdn Bhd chairman Datuk Subhi Dziyauddin, Malaysia Venture Capital Management Bhd CEO Jamaludin Bujang and Axiata Digital Innovation Fund partner Amin Shafie

“We are convinced that this collaboration is the first step towards linking the approximately 2.1 billion global Muslim population through the trade of halal products,” Azman Shah said when the maiden shipment arrived at Weifang Port in early May this year.

Weifang Sime Darby Port is operated by Sime Darby Logistics, a subsidiary of Sime Darby Bhd. Located in Shandong, it is said to be the largest modernised multi-purpose and comprehensive port in the Yellow River Delta, and an important feeder port within the Bohai Rim, according to information at its website.

The port is also a major transit port for bauxite and a key distribution centre for iron ore in central and western Shandong. It is also China’s major export port for sea salt and marine chemical products and a national designated port for dairy import in Shandong.

In a speech during the launch of the Malaysia-China Halal Silk Route Showcase on May 14, 2018, Azman Shah said: “Besides providing a one stop centre for exporters, the Halal Silk Route also aims to provide a halal export process which is very cost-competitive and transparent.”

The promise is for end-to-end logistics services with integrated halal value-added services, hassle-free documentation processes and competitive transportation cost.

The collaboration will see the handling of the logistics work that entail customs clearance, container handling and delivery/distribution tasks such as haulage services. Value-added services such as ware- house storage, inventory management and repackaging are also included.

This end-to-end value chain approach will also take care of halal verification and registration in China, as well as labelling in Chinese. Often, exporters overlook the importance of these steps, which can delay shipments.

Building Blocks

The building blocks to the dream began with a memorandum of understanding (MoU) signed in May 2017 during the One Belt One Road Forum in Beijing, China.

The agreement paved the way for Northport and Weifang Port to cooperate in port management and facilitate halal trade shipment between Malaysia and China.

Going by the projected numbers, the Halal Silk Route holds great potential.

By 2030, the Asean Muslim population is estimated to reach 262 million, with a potential purchasing power worth US$278.5 billion (RM1.16 trillion). For China, its annual halal food consumption is estimated at US$21.2 billion, of which Malaysia accounts for US$1.4 billion, which makes up only a fraction of China’s overall halal consumption. The global halal food market itself is projected to hit US$481.1 billion by 2021.

“These estimated numbers provide strong evidence that the Halal Silk Route, which we are working hard to create, will provide great, exciting opportunities for all,” said Azman Shah.

Northport and Liege Port Authority exchanging an MoU on April 5, 2018, to establish a sister port relationship to boost the trade link and increase the freight flow of halal products between Malaysia and Belgium. (From left) Logistics in Wallonia GM Bernard Piette, Selangor Mentri Besar Amirudin Shari, Belgium Ambassador to Malaysia Daniel Dargent and Azman Shah

Northport had also signed a similar MoU with Liege Port in Belgium earlier this year and negotiations are under way for similar agreements with ports in the Middle East and East Asia countries.

On Aug 27, 2018, Northport signed an MoU with Serunai Commerce Sdn Bhd, a global halal data pool developer which helps SMEs to trade their products to companies abroad and has developed the “Verify Halal” app with the Malaysian Islamic Development Department (Jakim) to enable consumers to check the halal status of a product.

The MoU enables Northport to tap on Serunai Commerce’s extensive database and together, the two parties intend to create an integrated logistics system with the objective of turning Malaysia into a global hub for halal trade.

Step by step, the Halal Silk Route linking the global Muslim population seems to be taking shape.