Malaysia well ahead of the curve in halal market

It encompasses a wide range of products and services with adequate support  and infrastructure development 


MALAYSIA is way ahead in becoming a leader in the halal market compared to its global counterparts. 

Halal Development Corp (HDC) CEO Hairol Ariffein Sahari highlighted that Malaysia has been a pioneer and champion of halal, long before other countries had even begun to embark on it. 

He said this was because in Malaysia, halal encompasses a wide range of products and services with adequate support and infrastructure development such as Islamic finance, the provision of Muslim-friendly services and others. 

“Looking at how Malaysia has come a long way since our early days in the halal market, we are ahead of the curve of our competitors and stand out above the rest because Malaysia’s halal market does not only look into food and consumable products’ certification. 

“Malaysia is the global market leader in halal. For nine consecutive years, Malaysia has retained its position in first place in the Global Islamic Economy Index as a leader of the global halal market,” he told The Malaysian Reserve (TMR), citing the assessment carried out by the State of the Global Islamic Economy 2022 Report. 

Commenting on how the halal market came about in Malaysia, Hairol Ariffein said this goes back to 1968 when the Conference of Rulers had determined that the country would need to establish a proper guideline for its Muslim citizens. 

He added that this led to the formation of the Secretariat of the National Council for Islamic Religious Affairs in Malaysia and this body was, thereafter, upgraded into the Islamic Affairs Division, which since 1974, had been tasked to look into the provision of halal food and consumables in Malaysia. 

He said at that point in time, the Islamic Affairs Division had looked into recognising halal only for food and consumable products. 

Fast forward to three decades later, Hairol Ariffein noted that HDC was formed as an industry-led agency. 

“We spearhead the development of an integrated and comprehensive halal ecosystem and infrastructure within Malaysia to position it as the most competitive country leading the global halal industry,” he added. 

Hairol Ariffein said in 2022, Malaysia’s exports reached RM1.55 trillion, exceeding the 12th Malaysian Plan (12MP) projection for 2025 by 24% and three years ahead of the target. 

Out of this, the total halal export value for 2022 was RM59.46 billion. He added that the halal industry contributed to 7.4% of the country’s GDP in 2022.

This year, the country’s performance is expected to grow at a softer pace due to global uncertainties such as disruption in the global supply chain, inflationary pressures, volatility in commodity prices, prolonged geopolitical tensions with trade to increase by 1.3%, exports to increase by 2.2% and imports by 0.2% respectively. 

As such, it is anticipated that this would be the same for the halal market growth, as well. 

Recently, it was reported that Malaysia’s halal industry is projected to grow to US$113.2 billion (RM500.17 billion) by 2030, with a contribution to GDP of 8.1% by 2025 through the Halal Industry Master Plan 2030 (HIMP 2030). 

International Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz had said that his ministry is committed to continually improving all components of the halal ecosystem towards improving Malaysia’s position as a major player in the global halal market. 

Pushing Forward Malaysia’s Halal Agenda

To provide a halal ecosystem that is sustainable and robust, Hairol Ariffein said HDC and the government had put in efforts to make Malaysia a global halal market leader. 

He said the global halal landscape is fast changing, as rising demand resulted in many new players supplying halal products and services. 

In tandem with this trend, he said the capacities and capabilities of the domestic halal industry to produce high-value-added products will be increased, towards making the industry more competitive and inclusive. 

“Thus, efforts will include uplifting the development of halal talent, recognising halal practitioners as professionals to provide a pool of quality talent in the halal industry, accelerating industry development to enhance competitiveness, increasing Bumiputera participation, expanding markets and positioning Malaysia as a global halal hub,” he noted. 

Hairol Ariffein added that the government’s aspiration to pursue halal as its key economic agenda is evident through the establishment of the Halal Industry Development Council (HIDC), chaired by the deputy prime minister (DPM) with the International Trade and Industry Ministry (MITI) as its Secretariat. 

It acts as the national council to consider, endorse and monitor the implementation of government policies relevant to the development of the halal industry within the national socio-economic developmental framework. 

Meanwhile, Hairol Ariffein also highlighted that the recently launched HIMP 2030 is Malaysia’s blueprint to make it an undisputed global leader in the halal industry and ensure that the country’s halal ecosystem continues to be sustainable and robust. 

The HIMP 2030 is aligned with seven strategic thrusts supported by 23 initiatives and addresses all identified opportunities and challenges. 

The strategic thrust includes enhancing halal industry-friendly policy and legislation; creating new and bigger market spaces; establishing a pool of halal experts and professionals to meet global needs; enhancing the quality and integrated infrastructure development; fostering thought leadership; producing more homegrown halal champions and facilitating more competitive Bumiputera participation in the halal industry. 

According to Hairol Ariffein, halal industry contributed to 7.4% of the country’s GDP in 2022

Halal in Demand 

Hairol Ariffein said the opportunity in the halal market for South-East Asia (SE Asia) is vast. Moreover, its countries are close-knit through the ties it has forged in Asean. 

He noted that SE Asia comprises around 240 million Muslims, representing approximately 42% of the region’s entire population. 

As such, Hairol said the halal demand is steadily growing as key emerging economies with large Muslim populations enjoy higher spending power. 

He added that to this effect, the demand for halal products and services has been on the rise among non-Muslim countries. 

He pointed out that borders’ reopening sees Muslim travellers returning to the pre-pandemic stage and in 2019, 160 million Muslims travelled the world and thus, encouraged halal tourism initiatives globally.
“So, the government is stead
fast in championing ‘Halal Malaysia’ as an industry segment that is fast growing. 

“Halal products and services are not just for Muslims, as it encompasses sustainability, ethical consumption and green growth. 

“Other countries such as Australia, Japan, South Korea, Taiwan, China, Mongolia, Turkiye and Russia look to develop and link their halal ecosystems with us and the Organisation of Islamic Cooperation (OIC) for market access, business expansion, networks and collaboration opportunities, investments and so on,” he said. 

On that note, Hairol said HDC strives to facilitate and play its role in linking the country’s halal ecosystem to other parts of the world. 

Moreover, HDC has embraced the digital initiative through its Halal Integrated Platform (HIP). 

Additionally, the annual World Halal Business Conference (WHBC) is highly regarded by the global halal fraternity as the exclusive platform for pioneering halal thought leadership and knowledge on halal economy. 

“It was held for the first time outside Malaysia last year with the WHBC Circuit Melbourne Australia 2022. This year, WHBC 2023 will be held in London, UK towards the fourth quarter,” he said. 

Challenges in the Halal Industry

Hairol Ariffein said the main challenge would be having an appropriate authoritative body to certify halal for the SE Asia countries. 

He added that prior to establishing the appropriate infrastructure development for halal in those countries would be the foundation which must be laid out first. 

For instance, he said through HDC, Malaysia was engaged by Cambodia, Vietnam and Mongolia, to assist them in setting up their halal framework. 

He said at this stage, it is a work in progress nevertheless, the halal economy of these countries will indeed develop over time, just like Malaysia. 

Another challenge would be market access, however, Hairol Ariffein said it is part and parcel of doing business whether you are into halal or otherwise. 

“Countries do not solely rely on halal certification, but on other certifications or standards as well, such as Good Manufacturing Practices (GMP), Hazard Analysis Critical Control Point (HACCP) or Conformité Européenne (CE), to name a few. 

“This is something that the SE Asian companies would need to look into, aside from having the halal certificate, before embarking onto the global halal bandwagon,” he said. 

Hairol Ariffein added that for these businesses to expedite access to their products and services into the halal market would be for them to be in Malaysia first as an entry point, as we are recognised for our halal standards globally. 

“Thereafter, we can link our halal ecosystems together and create a bigger, more exciting halal market space and economy,” he said. 

Recently, DPM Datuk Seri Dr Ahmad Zahid Hamidi was reported as saying that the Malaysian Halal Council meeting had unanimously agreed that a new mechanism or process is needed to speed up the issuance of halal certificates. 

The issuance of halal certificates currently takes about nine months to be approved due to several constraints including bureaucratic red tape. 

Encouraging MSMEs to Tap Halal Opportunities

Hairol Ariffein said HDC is consistently educating and encouraging local micro, small and medium enterprises (MSMEs) to embark on the halal market, as a means to an end in widening their business opportunities and expanding their markets beyond their comfort zone. 

Aside from halal certification, their products and services must be market ready in terms of product packaging, production capacity, product sampling and marketing. 

“The Economic Performance Outlook 2021 report published by SME Corp Malaysia last year said there were 1,151,339 MSMEs in 2020 which accounts for 97.2% of total establishments in Malaysia. 

“Of this number, 200,000 are involved in halal-related businesses and out of this, there are less than 8,000 SMEs with the halal certification. 

“This is where HDC continues to pursue its strategic interventions and plans — as mapped out in the HIMP 2030 — to boost and grow the halal market space and businesses of our local SMEs and turn them into halal large local conglomerates (LLCs) of the future,” he said. 

HDC has also collaborated with agencies of other governments to enable the local SMEs to gain exposure and knowledge on the expected market requirements and standards when exporting their products. 

One such collaboration is with the Japan International Cooperation Agency (JICA) on the enhancement of hygiene and quality management for animal-sourced foods. 

On top of this, Hairol Ariffein said HDC has also gathered local companies to participate in halal expos abroad through its “Malaysia Global Halal Show: Bridging Halal Markets” programme and showcasing their products and services through our integrated digital platform known as Digital Augmented Reality Showcase of Halal Malaysia (Dash). 

Dash delivers a combination of augmented reality capabilities through 3D-enabled presentations of halal products and services provided by Malaysian companies. 

  • This article first appeared in The Malaysian Reserve weekly print edition