Steady Growth of Halal Industry in Malaysia

Malaysia has emerged as a frontrunner in the global Halal industry, experiencing steady and impressive growth. This growth reflects the country’s majority Muslim population and its strategic initiatives and robust certification standards that have set a benchmark in the Halal sector worldwide.

As we look into the dynamics of this thriving industry, it’s essential to understand how Malaysia’s commitment to quality, innovation, and ethical practices has made it a beacon in the Halal market, attracting attention from international investors and consumers alike.

This article explores the various facets of Malaysia’s Halal industry, highlighting its journey, current status, and potential for the future.

Let’s get into it.

Malaysia’s Pivotal Role in Shaping the Global Halal Market

Malaysia has emerged as a key influencer and trusted certification hub. The Halal Malaysia trademark, a symbol of compliance with Islamic law, is now recognized and employed by 26 countries worldwide for halal certification. This reflects the country’s significant role in standardizing halal practices on an international scale.

Halal, meaning permissible under Islamic law, encompasses much more than dietary restrictions. It extends to all aspects of life, as indicated by various Quranic verses, including Verse 168 from Surah Al-Baqarah. Halal principles guide food consumption, personal care, medication, and commercial activities.

Interestingly, the appeal of halal products extends beyond the Muslim community. An increasing number of non-Muslim consumers globally are turning to halal-certified products, indicating a broadening market and shifting consumer preferences towards these standards.

Prime Minister Datuk Seri Anwar Ibrahim highlighted Malaysia’s leadership in the global halal economy at the Global Halal Summit (GHaS) 2023 in Kuala Lumpur. He noted that during discussions with leaders from major economies like Japan, China, South Korea, Vietnam, and Laos, Malaysia’s expertise in halal certification was a focal point. These countries want to leverage Malaysia’s experience to develop their halal industries.

The Prime Minister’s emphasis on Malaysia’s precision and well-established ecosystem in the halal industry underscores the country’s strategic position. This expertise is a national asset and a model for other nations aiming to tap into the growing halal market.

Furthermore, the concept of Ekonomi Madani aligns with this vision, focusing on national development through robust and innovative halal industries. This approach is integral to the 12th Malaysia Plan, aiming to enhance an inclusive and high-impact halal industry, thus accelerating Malaysia’s industrial development globally.

Related: The Best International Islamic Finance Centre in Malaysia

Malaysia’s Leadership in the Halal Industry

The government has invested considerably in developing a robust halal ecosystem. This includes dedicated research and establishing infrastructure to support the halal sector. Key components of this ecosystem include:

  • Jakim (Department of Islamic Development Malaysia): Jakim is at the heart of Malaysia’s halal certification process. The Jakim halal logo is synonymous with quality and the assurance that products and services comply with rigorous halal standards.
  • Halal Development Corporation Berhad: This body plays a pivotal role in nurturing the halal industry. Beyond food and beverages, it emphasizes the importance of including other products like cosmetics, pharmaceuticals, and services such as hospitality and Islamic finance in the national halal ecosystem.

This comprehensive ecosystem positions Malaysia as a competitive global leader in the halal industry, effectively linking government bodies, industry players, and consumers within the halal value chain.

Moreover, the efforts extend to creating opportunities, investments, trade, employment, and facilitating sharing information and technology transfer in the halal value chain. These initiatives aim to bolster the industry’s competitiveness and global resilience, especially by addressing challenges in global trade.

  • Department of Standards Malaysia: This department is crucial in ensuring Malaysian halal products meet international quality and safety standards. Malaysia takes pride in being the first country to establish its halal standards, which now serve as a reference for the Organization of Islamic Cooperation (OIC) member states.

The Global Halal Summit (GHaS) 2023 is a testament to Malaysia’s commitment to maintaining and promoting its halal reputation, not just domestically but on the international stage as well. GHaS provides a substantial platform for global halal industry stakeholders, aligning with Malaysia’s ambition to be the premier choice internationally for halal products and services.

GHaS, particularly its Malaysia International Halal Showcase (Mihas), offers an unparalleled opportunity for industry players to establish and strengthen business relationships worldwide. This initiative is crucial to maintaining the momentum of the halal sector and reinforcing Malaysia’s position as a global halal hub.

Read Also: 10 Best Halal Stocks to Invest in 2023

Role of Jakim

Jakim, a government-recognized body, is responsible for issuing halal certification based on standards developed in collaboration with the Department of Standards Malaysia. Covering various sectors such as food and beverages, pharmaceuticals, cosmetics, and logistics, these standards are integral to maintaining the integrity and global consumer confidence in the Halal Malaysia logo.

A new initiative allows foreign industry players to apply for Malaysian halal certification directly, encompassing seven schemes and serving as a gateway to global opportunities.

Jakim’s efforts are positioning Malaysia as a pioneer in the global halal industry, with the Prime Minister urging local players to leverage this robust ecosystem to expand into the global market. This strategic move strengthens Malaysia’s role as a leading global halal hub and contributes significantly to the global halal market, which is expected to grow annually by 3.5% to reach US$2.4 trillion by 2024.

Read: Unlock the Full Potential of Your Halal Investment Journey with Musaffa Premium

Malaysia Targets RM63 Billion in Halal Market Exports by 2025, Says PM Anwar

Prime Minister Datuk Seri Anwar Ibrahim announced the government’s ambition to position Malaysia as a global leader in the halal market, aiming for an export value of RM63.1 billion by 2025. This goal aligns with the Halal Industry Master Plan 2030, focusing on enhancing the ‘halal toyyiban’ market, which adheres to Shariah standards and promotes high-quality products.

He also emphasized the importance of talent development, stakeholder coordination, market access, technology integration, and digitalization in sectors like pharmaceuticals, medical devices, and modest fashion.

These efforts are part of Malaysia’s broader economic reform strategy and contribute to the nation’s goal of becoming a sustainable, prosperous, and high-income country, as outlined in the Mid-Term Review (MTR) of the 12th Malaysia Plan.

The review assesses the progress of the five-year plan’s first two years and sets the direction for the next three years.

(Source: The Edge Malaysia)

Halal Pharmaceuticals: A Booming Market Navigating Ethical and Regulatory Terrain
The halal pharmaceutical market is rapidly expanding, driven by the growing demand for products that align with Islamic principles. This sector, which is expected to reach USD 151.5 billion by 2027, caters to the needs of nearly two billion Muslims worldwide.

Unlike halal food, which has straightforward guidelines, halal pharmaceuticals require a more detailed approach. This includes not only avoiding prohibited substances like pork and alcohol but also ensuring ethical production practices. These practices include using halal animal-derived ingredients, maintaining hygiene, minimizing animal testing, and adhering to ethical standards throughout production.

Opportunities and Challenges in the Halal Pharmaceutical Sector

The growth of the halal pharmaceutical market is driven by several factors, including the rising global Muslim population, projected to hit 2.8 billion by 2050, and increasing awareness of halal principles among Muslim and health-conscious consumers. This expansion offers manufacturers, healthcare providers, and certification bodies lucrative opportunities.

However, the sector faces significant challenges, such as the lack of standardized regulations and certification processes across countries, which can diminish consumer trust. Additionally, there is a pressing need for more investment in research and development, particularly in addressing the specific needs of Muslim patients in areas like chronic diseases.

Towards an Ethical and Inclusive Healthcare Future

The future of the halal pharmaceutical market depends on a collaborative approach to overcome these challenges. By improving cooperation among various stakeholders, the sector can promote ethical and sustainable practices in the healthcare industry.

This market is not just about serving a religious demographic; it’s about creating a more inclusive and ethical healthcare landscape for everyone. By addressing the challenges and leveraging the opportunities, the halal pharmaceutical market can ensure that Muslim consumers, indeed all consumers, are better informed and catered to in their pharmaceutical needs.

Read: 5 Misconceptions About Halal Investing

(Source: NST Malaysia)

Malaysia and Thailand Eye Joint Development of Halal Industry in Southern Region

As MCA President Datuk Seri Dr. Wee Ka Siong indicated, Malaysia and southern Thailand are poised to collaborate in developing the Halal industry. Speaking at the Southern Peninsula Sub-Regional Cooperation Expo in Hat Yai, Thailand, Dr. Wee highlighted the potential of this partnership, especially in tapping into the profitable Middle Eastern market.

He suggested transforming the southern border of Thailand into a global Halal hub, leveraging Malaysia’s experience and recognition in the Halal sector, including the globally respected Halal logo by the Department of Islamic Development Malaysia (Jakim).

Political Insights and Economic Goals

During the event, Dr Wee engaged with former Thai Deputy Prime Minister Phongthep Thepkanjana, discussing Thailand’s political landscape and the new government’s commitment to economic development. Phongthep, a former judge and Justice minister, now plays a role in drafting the Constitution for Thailand’s new government.

Their conversation underscored the Thai government’s dedication to enhancing the economy and living standards in the five southern provinces. Darwin Yang, President of the Asean-China Commerce Association, was also present, indicating a broader interest in the region’s economic development.

A Vision for Cross-Border Prosperity

Dr. Wee expressed optimism about the future of the Malaysia-Thailand border regions, foreseeing mutual benefits for both countries through this collaboration. The development of the Halal industry in these areas could boost economic growth and improve the living standards of the local populations. This initiative reflects a concerted effort by both nations to explore uncharted sectors and create a more prosperous and interconnected region, with the Halal industry at the forefront of this endeavor.

(Source: The Star)

Malaysia Streamlines Halal Certification: New 23-Day Process

Simplification of Halal Certification

The Malaysia Halal Industry Development Council has announced a significant change in the procedure for obtaining halal certificates. Starting early next year, the process for applying for and renewing halal certificates will be streamlined, reducing the approval or feedback period to 23 working days. This initiative, led by Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi, comes in response to numerous complaints about the lengthy certification process, which ranged from nine months to two years.

Challenges and Solutions for SMEs

Acknowledging the difficulties faced by micro, small, and medium enterprises (PMKS) in meeting the requirements set by the Department of Islamic Development Malaysia (Jakim) Halal Certification Division, Ahmad Zahid emphasized the need for coordination to address these challenges. Many PMKS struggle with the cost of modifying or upgrading premises to comply with halal standards. The Halal Development Corporation Bhd (HDC) will collaborate closely with Jakim to implement a new halal certificate application process to address this.

Expanding Global Halal Diplomacy

The meeting also resolved to enhance Halal diplomacy efforts in partnership with the Ministry of Investment, Trade, and Industry (Miti). This strategy aims to elevate the presence of local halal products and services on the international stage. The approach includes collaborative efforts in official and working visits by the Foreign Ministry, Miti, the Prime Minister, and other ministers promoting halal products or services. Additionally, agencies such as the Malaysian External Trade Development Corporation (Matrade), HDC, and Jakim will proactively pursue at least three international agreements incorporating halal elements to strengthen Malaysia’s position in the global halal market.

(Source: MalayMail)

Malaysia’s Halal Exports Hit RM44.17 Billion in October 2023

Top of FormMalaysia’s thriving halal sector has marked a significant milestone, reaching exports worth RM44.17 billion as of October 2023, announced Deputy Investment, Trade, and Industry Minister Liew Chin Tong. This achievement follows a remarkable 64% increase in halal exports in 2022, totaling RM59.46 billion, a leap from the previous year. The sector’s growth is attributed to diverse products, including food, beverages, ingredients, and cosmetics.

The Ministry of Investment, Trade, and Industry (Miti), in collaboration with the Halal Development Corporation Bhd (HDC) and the Malaysian External Trade Development Corporation (Matrade), continuously works to promote Malaysian halal products globally. This promotion is facilitated through platforms and business campaigns at major events like the Malaysia International Halal Showcase (Mihas). The 19th edition of Mihas witnessed an impressive RM3 billion in sales of halal products, exceeding the target by 24%. The event also connected 469 local companies with 231 international buyers from 44 countries.

Liew highlighted the government’s commitment to streamlining the process for obtaining Malaysian halal certification through the Halal Industry Development Council. This effort will involve a coordinated approach with Miti, HDC, the Department of Islamic Development Malaysia (Jakim), Matrade, Sirim Bhd, the Department of Standards Malaysia (DOSM), and local governments.

(Source: The Edge Malaysia)

Bottom Line

Malaysia’s rise as a global leader in the halal industry is a clear demonstration of its strategic initiatives, high-quality standards, and commitment to innovation and ethical practices. The nation’s comprehensive approach, covering areas from food and beverages to pharmaceuticals, cosmetics, and beyond, has not only served the Muslim population but also attracted international attention and investment.

The efficient processes for halal certification, the successful Malaysia International Halal Showcase (Mihas), and the government’s efforts in promoting the Halal Malaysia brand globally indicate Malaysia’s dedication to expanding its influence in the halal market.

With the government’s focus on enhancing the ‘halal toyyiban’ market and the Halal Industry Master Plan 2030, Malaysia is well-positioned to meet and exceed its ambitious export goals, contributing significantly to the global halal economy.

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