HDC says export revenue for halal industry likely hit RM31b last year, well short of govt’s RM50b target
by SHAHEERA AZNAM SHAH / graphic by MZUKRI MOHAMAD
MALAYSIA’S export return for halal products is expected to be short of RM20 billion from the initial target, recording RM31 billion in 2020 due to Covid-19, said Halal Development Corp Bhd (HDC).
Before the pandemic, the evolvement of the halal market from being marketed as Muslim-centred products to hygienic and quality products had created a multibillion dollar market, which Malaysia planned to leverage on.
With grand sports events held at a global scale, coupled with the anticipated growth in consumer spending on halal products, the government had targeted export revenue for the industry to reach RM50 billion in 2020.
“After Malaysia achieved its initial expectation of the export revenue of RM19 billion back in 2014, the government revised the target to RM50 billion, to be achieved in 2020, taking into consideration the economic situation in 2015 which was better compared to the time before Covid-19 pandemic happened.
“We did enjoy RM35 billion to RM40 billion a year of export performances for the past few years, which is about double the original target.
“Now, with the supply chain disruptions on a global scale, which happened to almost all industries, we forecast Malaysia’s halal export for 2020 will register at RM31 billion,” HDC CEO Hairol Ariffein Sahari told The Malaysian Reserve (TMR) in an interview.
According to DinarStandard’s State of Global Islamic Economy Report 2020/2021, Muslims’ food purchases globally are expected to record a 0.2% drop in 2020 from the US$1.17 trillion (RM4.74 trillion) recorded in 2019.
Despite the decline, the report said a compound annual growth rate of 3.5% is estimated between 2019 and 2024 for the halal food industry, with total Muslim spending to reach US$1.38 trillion by 2024, the report said.
TMR reported in November that the smaller number of selected crowds at the Olympics is also expected to significantly shave RM3.7 billion in targeted revenue from the sale of halal food and products to Japan by end-2020.
After a year spent on calibrating the direction of Malaysia’s halal industry, Hairol Ariffein said HDC will continue to execute the strategies to promote new marketplaces for local players to latch on and facilitate business-to-business and business-to-consumer transactions.
“Malaysia is still leading the halal economy and for that, I do not think that there is a need for a revamp or a major overhaul in the strategies as they are not broken.
“However, I strongly believe that approaches need to be changed. Our industry players are currently in a survival mode and they are in a dire need of cash.
“As cash comes from sales, they need to be an effective player in the marketplace, whether it be via online or offline.”
The CEO added that Malaysia’s strategies to create a robust and sustainable halal ecosystem are still well intact and relevant, while success indicators remain valid.
As global expansion is core to any industries’ long-term target, halal industry players should be equally focused on the domestic halal market, which is still considered to be much untapped, Hairol Ariffein said.
“Getting into the international market is the ultimate goal for many business owners and for the local industry players, South-East Asia and Asia Pacific’s halal markets are currently the prime focus due to the market size, geographical coverage and proximity.
“These markets are more practical to our halal industry players because the acceptance of the products and supply cost is manageable.
“However, never underestimate our local halal market. At the moment, it stands at RM280 billion and forecast to reach RM400 billion by 2030.”
Read our previous report here