may-june. 2020 | @Halal
Local News
05
Silver
lining
Blue skies beckon for
halal SMEs in wake of
Covid-19 crisis
By Richard Whitehead
MalaySIan halal businesses
should keep calm and carry on
as best they can during this
coronavirus pandemic. According
to the new chief executive
of the Malaysian governmentowned
company charged with developing the
halal industry, the rewards at the end of the
crisis will outweigh all the hardship.
Appointed to the top job of the Halal
Development Corporation (HDC) late last year,
Hairol Ariffein Sahari painted a reasonably
positive picture of the future for most halal
traders.
Yet he acknowledged it will not all be
plain-sailing while Malaysia is in lockdown
and companies are only allowed to call on half
their workforce under government distancing
regulations.
EXPORTS HIT
“Production capability has been reduced,
meaning fewer products are being exported,
and logistics are not as prompt. Exports will
definitely be affected during the first and
second parts of the year, and I pray to God that
the situation will improve,” he told Salaam
Gateway over the phone.
A scientist by training, Hairol Ariffein
joined HDC in 2010 after a stint as a trade official
and time on quangos. At the corporation,
he has led various strategic initiatives including
the establishment of the Halal Industry
Development Council and the development of
Malaysia’s second halal industry masterplan.
He took over on an interim basis from
the retiring Jamil Bidin, who established
HDC in 2006. Though he is now the full-time
chief executive, the corporation has yet to
announce this officially. In light of the current
situation, HDC has revised downwards
its trade targets for this year and dropped its
goal of achieving RM50 billion in exports.
However, it still expects to see growth after
disappointing figures last year.
The corporation had been touting growth
of 7-8 per cent in 2020, before the onset of the
pandemic. This would have resulted in Malaysia
meeting its long-term goal of RM50 billion
in exports during the course of the year, an
increase over last year’s RM40.2 billion of
registered trade.
“We recalculated our export targets this
year and we forecast that halal exports will
expand by upwards of three per cent, so a
more realistic target would be up to RM43.4
billion this year,” he said.
ADVICE For SMEs
Hairol Ariffein’s advice to SMEs was to
manage the situation and stay resilient. They
should look after their cashflow and renegotiate
terms with their suppliers, based on the
smaller volumes they now order, he said.
They should also let consumers know they
are still around and use this time to build loyalty
through social media and promotions for
regular customers. They would also be wise to
look closely at finance through government
stimulus schemes.
“We all need to think ahead post the Covid-
19 crisis. This is very important because halal
stands a very good chance to fly above this
pandemic, due to the value it brings,” he said.
“This crisis is teaching more consumers
about the importance of clean and safe products,
which is central to what halal is offering.
I have a very positive feeling about this one,
and I would like to urge SMEs to invest more
HDC CEO'S
ADVICE FOR SMeS
AMid CRISIS
• Manage and
watch cashflow.
Renegotiate terms
with suppliers
• Let customers
know you’re still
around – build
loyalty through social
media and promos
• Look to government
stimulus schemes
for financial help
• Product
consolidation – talk
to industry groups,
find other companies
to work with to
produce a larger
amount of goods
• Once pandemic
situation stabilises,
SMEs could
offer OEM or contract
manufacturing for
big corporations that
need to increase
volume quickly
• Invest more
in marketing postcrisis
in marketing after the crisis is over.”
Based on HDC forecasts, many small halal
businesses will have the opportunity in the
medium-term to increase their production
fivefold just to meet demand.
Even before the coronavirus pandemic,
there was an estimated 80 per cent supply
gap for halal products around the world. After
the crisis there will be a lot to catching up to
do, especially for the big corporations.
Because of the nature of the pandemic,
these major businesses have faced the same
challenges as small ones, namely scarce and
expensive raw material supplies, higher
production costs and a shortage of workers.
“So this is where SMEs could take the
opportunity to offer OEM or contract manufacturing.
This is low-hanging fruit that they
can leverage after the crisis is over,” said
Hairol Ariffein.
Product consolidation would also be an
interesting avenue for many halal businesses,
he added.
“SMEs should talk to industry groups to see
how they can find other companies to work
with to produce a larger amount of goods. A
lot will be needed when this ends.”
Now should also be a time to develop more
robust supply chains, he believes, especially
in light of the coronavirus crisis disrupting
logistics. Many halal SMEs have been forced
to watch raw materials and finished goods
struggling to reach their destinations.
To this end, Malaysia needs to put in place
stronger supply links with target markets so
its exporters can really integrate into their
halal ecosystems.
“This is what the new HDC is working on
now, in spite of the virus outbreak. Our focus
is on the Far East, including countries like
Japan, Korea and Hong Kong. Next year, there
will be more greenfield markets,” said Hairol
Ariffein.
“But for now we need to stay positive and
we will manage to get through this crisis
together. SMEs just need to be resilient and
plan ahead.”
In the spirit of Ramadhan
The Halal Development Corporation
(HDC) presented donations to two
organisations on May 19 because of
Ramadhan.
The organisations were Pertubuhan
Rahoma Darul Fakir Malaysia and Maahad
Tahfiz Al-Falahiyyah. About 80 orphans
and tahfiz students will benefit from the
gesture.
HDC Chief Executive Officer (CEO)
Hairol Ariffein Sahari presented the
donations worth RM30,000. Other HDC
senior officers were also present. Rahoma
Darul Fakir organisation was represented
by Dato’ Faridah Omar Shah, while Zaaba
Zainal Abidin, as principal of Maahad Tahfiz
Al-Falahiyyah, represented the school.
“I take this opportunity during Ramadhan
to hand over donations to Pertubuhan
Rahoma Darul Fakir and Maahad Tahfiz Al-
Falayyah. This Ramadhan Charity Programme
is an annual affair. For this year, it is in line with
the Management of B40 Polarity Group under
the Shared Prosperity Basis 2030, where no
group is left behind,” said Hairol Ariffein.
The global halal industry is worth RM10
trillion, Hairol pointed out.
“I call for a total exposure of the halal
industry to young people from the very
beginning. Besides the donation, HDC will also
organise a halal programme for the students.
This Talent Development Programme aims
to provide information and exposure on
employment opportunities in industries
that can generate economic growth for the
community,” Hairol Ariffein added.