Malaysia, the Global Halal Hub
Potential of Halal Food Market
The global halal food market reached a value of US$ 1.9 Trillion in 2020. With approximately 1.8 billion Muslims or equivalent to 24% of world population, the Halal food market is poised to enjoy continuous growth. Factoring in accelerating population growth and rising incomes, an average annual growth rate of 9% is expected. This will account for 18.3% of the total global expenditure in this sector.
Over the past few years, halal food items have become popular amongst both Muslim and non-Muslim consumers as they have evolved from being an identification of religious observation to assurance of food safety, hygiene and reliability. This is particularly the case in China, where there is high concern of food safety involving traceability from farm to fork. Moreover, the flourishing e-commerce industry has facilitated consumers with easy accessibility of halal-certified food products.
In October 2019, Government of Indonesia has introduced mandatory halal labeling and certification rules, owing to which consumers nowadays prefer halal food. The compulsory labelling by Indonesian Halal Product Guarantee Agency (HPGA) will first apply to the food and beverage (F&B) products and services before being gradually expanded to include drugs, cosmetics and other consumer goods. Indonesia is the world’s largest Muslim majority nation and ranked 4th populous country in the world. Indonesia is Malaysia’s neighbour with Kalimantan sharing a common border in East Malaysia.
The recent Covid 19 pandemic has seen surge in demand of processed frozen food. With most people staying at home during the lockdown period, many of these Halal processed frozen products have been flying off the supermarket shelves as consumers stock up on convenient, easy-to- prepare food. Many is of the opinion that these products would continue to be in demand with more people working from and eating at home in the new normal following the pandemic.
What is Halal Food Products?
The key principle for Muslim diet is the food has to be:-
-
Halal which means ‘permissible’ in Arabic
-
Toyyiban which means ‘wholesome, healthy, safe and nutritious’
-
Tayyib which means ‘clean and pure
Traditionally, the concept of halal mostly referred to food preparation methods, and Muslims abstaining from consuming alcohol, pork and food contaminated with non-halal ingredients.
Meat products have to be sourced from healthy animals that were slaughtered with a single cut. Slaughtered halal animals undergo two health checks, as compared to the single inspection performed on other conventional animals.
In general, all fruit and vegetable products are considered halal, as long as they have not be been contaminated through contact with forbidden items, notably pork and alcohol. During the processing and transportation of food, the cross mixing of halal foods and non-permitted products is strictly forbidden. In addition, clear sanitary regulations specific to halal food must be observed all the way from the abattoir to the point-of-sale. Moreover, halal food products are packaged and stored in utensils, which have been cleaned as per the prescribed guidelines.
With regard to food, tayyib is often referred to in the context of food safety. Food that is considered tayyib should be hygienic, exposed to minimum contaminants and free from potential toxins.
In order to ensure proper segregation of halal and non halal products, Malaysian supermarkets have a ‘non-halal’ food section, a designated area where non-permitted products (such as pork, wine and cigarettes) can be displayed. Customers are also obliged to pay for these prescribed products at a separate checkout counter.
Being a member of Organization of Islamic Conference (OIC), Malaysia’s Halal certification by JAKIM (Department of Islamic Development Malaysia) is internationally recognized as standardized logo and certification system approved for use by all Muslim nations. In this respect, Malaysia has the edge in being recognized internationally as a progressive Muslim country, where it has the potential of becoming a major producer of Halal food products. Malaysia, a pioneer in halal certification, has recognised 78 foreign certification bodies from 45 countries, according to a list published by JAKIM.
Malaysian Halal Industry Development Corporation (HDC) is a dedicated agency established under the direct purview of Ministry of Finance Incorporated to improve halal ecosystem in Malaysia as well as enhance commercial and industry development and branding. It is a Malaysian Government’s initiative to be the Global Halal leader in innovation, production and trade within halal-related sectors, including specialty processed foods, cosmetics and personal care, pharmaceutical ingredients, livestock and the services sector particularly logistics, tourism and healthcare.
The Malaysian Halal Industrial Park: An Agglomeration of Halal-oriented Businesses
Malaysia, being the forefront of International Halal Food Hub has designated Halal Industrial Park which caters for halal food, cosmetics and personal care processing as well as halal pharmaceutical and nutraceutical manufacturing.
The introduction Halal Industrial Parks allows their businesses to share common facilities such as storage, cold chain warehousing and support services. It also facilitates the growth of a supply chain within the park, creating a synergy between the resident businesses.
Apart from the commitment and support by the Government, the food-based Halal industries requires an ecosystem to support efforts in producing and exporting Halal food products. The Malaysian Halal Ecosystem is not limited to halal certified foods and beverages, but rather encompasses the whole supply chain, from business financing to the end product logistics and distribution services.
Amongst the main Halal Industrial Park with Freehold Industrial for Sale and equipped with all infrastructure necessary for Halal Food Manufacturers is Techpark@Enstek. Adequate and stable electricity and water supply, gas pipeline as well as Broadband telecommunication lines is available. An overview of Techpark@Enstek.
Located 20 minutes from Kuala Lumpur International Airport (KLIA), Techpark@Enstek has excellent connectivity being centrally located in Peninsular Malaysia. Neighbouring country, Singapore is merely 3.5 hours away connected via North South Expressway (NSE). The new Nilai-Labu Highway improves the connectivity of this Techpark as it directly links North South Expressway (NSE) and Kajang-Seremban Highway. North South Expressway (NSE) connecting to Central Link Expressway (ELITE) and Shah Alam Expressway (KESAS) bring us to Northport and Westport.
Techpark@Enstek is accredited with HALMAS Status. Halal Food manufacturer operating in HALMAS designated industrial park is granted favourable income tax exemption which include the following:-
Tax incentive by Halal Development Corporation (HDC)
100% income tax exemption on capital expenditure for a period of 10 years or income tax exemption on export sales for a period of 5 years. Exemption from import duty on raw materials used for the development and production of halal promoted products.
Double deduction on expenses incurred in obtaining international quality standards such as HACCP, GMP, Codex Alimentarius (food standard guidelines of FAO & WHO), Sanitation Standard Operating Procedure and regulations for compliance for export markets such as Food Traceability from farm to fork.
Tax incentive by Malaysia Industrial Development Authority (MIDA)
Companies producing halal food will be given Investment Tax Allowance (ITA) of 100% of qualifying capital expenditure incurred within a period of 5 years. The allowance can be offset against 100% of statutory income in each year of assessment. Unutilized allowances can be carried forward until fully absorbed.
Malaysia is the great hub of halal industry in the world and has set up institutions to determine efficacy of halal, deal with the issues of its standards and certification. It is a leading exporter of pure Islamic products to Muslim countries, China and western countries where there is large presence of Muslim population. Servicing the halal food markets of many countries associated with Belt and Road Initiative (BRI) would augur well for the overall expansion and growth of the Halal Food Industry.
We look forward to assist in the expansion of your halal food and beverage production.
Do contact me today at +6017 333 8007 or email joyce@industrialspace2u.com to find out more. Your One Stop Centre for your Halal needs from Halal certification by reputable consultants to halal logistics service providers.