Malaysia’s new strategies to retain halal market leadership

KUALA LUMPUR: There is no room for complacency even as Malaysia maintains its leadership position in the world halal market.

This is because of intense competition as a result of growing interest from East Asian countries such as Japan, China and South Korea.

Despite Malaysia being the leader in the global halal market, there is still a need for new strategies and initiatives to meet the challenges and complexities of the global halal economy.

It is no easy task for Malaysia to sustain its position as the leader of the global halal industry as it is not a big country and does not manufacture halal products in a big scale. The capacity-building for local producers is the main priority now.

Currently, local halal producers are only able to cater to 20 per cent of the global market demand. Therefore, the government will continue to build on its strong foundation and improve the capacity and capabilities of Malaysian halal producers, taking advantage of the growing international market.

The government’s initiatives to promote the halal industry will be enhanced through its deeper collaboration with the states.

Through the collaboration, efforts can be made to move up the value chain and build a more integrated ecosystem that does not only cover production and output but also input required to develop the products to truly meet the halal specifications.

The halal market, which comprises more than 1.8 billion global Muslim population and is valued at US$3 trillion (RM12.25 trillion), is growing massively.

As such, other countries have also placed importance on halal product trading.

The top five halal export destinations last year were Singapore (RM4.6 billion), China (RM4.5 billion), Japan (RM2.5 billion), the United States (RM2.4 billion) and Indonesia (RM1.9 billion).

Halal Industry Development Corp (HDC), an agency under the purview of the Economic Affairs Ministry, aims to prepare the halal industry for the Fourth Industrial Revolution (Industry 4.0) for further growth.

One way on how it can benefit the halal industry is the Industrial Internet of Things (IIoT).

IIoT, an extension of the Internet of

Things (IoT), can revolutionise Malaysia’s halal industry by enabling the acquisition and accessibility of far greater amounts of data, at far greater speeds and far more efficiently than before.

With IIoT, the digitisation of the halal supply chain, from farms to warehouses to food distribution and retailing, enables halal producers and regulators to leverage technologies that monitor and analyse the entirety of the process. IIoT has the potential to address various halal industry challenges.

For example, it complements the current traceability system, including product quality, timeliness of delivery, waste, spoilage and recalls. Leveraging sensor technologies and real-time data analytics has also allowed manufacturers to precisely monitor their raw materials through the adoption of track and trace techniques.

Blockchain is another technology in Industry 4.0 that can influence the halal industry.

Blockchain, the tamper-proof, cryptographybased recordkeeping system behind Bitcoin and other cyber-currencies, can be used to ensure the halal integrity of the global food safety distribution chain.

Furthermore, the government has allotted RM3 billion for the Industry Digitalisation Transformation Fund during the tabling of the 2019 Budget.

This is part of the initiatives in transforming Malaysia’s industrial capabilities by supporting the right ecosystem for Industry 4.0 to make Malaysia a preferred high-technology manufacturing location.

Thus, it aligns with the objective of this fund, which is to accelerate industry adoption of Industry 4.0 technologies, thereby increasing the contribution of the manufacturing sector to the national economy.

Meanwhile, the 11th World Halal Conference (WHC), a thought leadership platform, has become an established part of the calendar in Malaysia.

It is one of the government’s strategies to make Malaysia a global halal hub.

Hosted by the Economic Affairs Ministry and organised by HDC, WHC converges more than 1,000 government representatives, business leaders, halal industry players, entrepreneurs, scholars and stakeholders from all over the world to explore the potential and deliberate on challenges relating to the development of the halal economy.

The Industrial Internet of Things, an extension of the Internet of Things, can revolutionise Malaysia’s halal industry by enabling the acquisition and accessibility of far greater amounts of data, at far greater speeds and far more efficiently than before.