Industry
@ Halal | May-June . 2022
Selangor as the global halal gateway
BY FATIHAH MANAF
Strategic location , big market , and highly skilled workforce help drive investments into the State
AS MALAYSIA ’ S economic powerhouse , Selangor contributed 24.3 per cent to the country ’ s gross domestic product ( GDP ) in 2020 despite the pandemic . Adding halal as another value proposition to attract more investors into the State will be a great move as the global halal market grows exponentially .
Its strategic location and highly skilled workforce are some of the main drivers that make Selangor determined to realise the State as the global halal gateway . To discuss the topic , a panel discussion titled “ Realising Selangor as the global halal gateway ” was held during the Selangor International Halal Convention ( SELHAC ).
The session featured panellists Mat Ghazali Abd Rakim , CEO of Halal International Selangor ( HIS ), Mohd Naim Mohd Aziz , Senior Assistant Director , Secretariat of the Malaysian Halal Council at the Department of Islamic Development Malaysia ( JAKIM ) and Hanisofian Alias , Chief Industry Development Officer of Halal Development Corporation ( HDC ).
It was moderated by Assoc . Prof . TS Dr Moohamad Ropaning Sulong , Director , Centre for Research and Industrial Linkages ( CRIL ), Universiti Selangor ( UNISEL ).
Selangor Halal Economic Zone
According to Mat Ghazali , one of Selangor ’ s steps to strengthen halal in the State was introducing a dedicated portfolio for the halal industry . Despite the many strengths of the State ’ s economy , he said Selangor must improve and enhance the marketability of its halal products .
“ If businesses want to export their
products , they need to follow the required regulations regarding labelling , packaging , etc .”
He added the State needed to have a complete halal ecosystem where the stakeholders and the State could monitor their halal progress . He revealed HIS proposed to the State Government to have Selangor Halal Economic Zone , a new zone for the halal industry , located near the port .
“ This is where we need to work hard to attract local and foreign investors to invest in the Selangor Halal Economic Zone . All industries related to halal will be available at the zone , including immigration , customs , banking etc .
“ Even though Selangor already had a milestone achievement when halal was under the purview of Invest Selangor , these are some of the things that we can improve .”
Strategies from HDC ’ s experience
According to HDC ’ s research , Selangor has the biggest market in Malaysia due to its almost seven million people .
Hanisofian shared : “ From our experience , every time an investor comes to Malaysia asking about the potential investment area , they will ask about Selangor first . They know that when you ’ re close to the market , you can do many effective supply chain businesses .”
He agreed Selangor already had a complete ecosystem , adding the State ’ s proximity to the federal government offices was also an advantage .
“ We need well-defined , well-discussed documented strategies to bring us forward in developing the halal industry .”
He said , in 2008 , HDC developed the Halal Industry Master Plan to accelerate and increase the economic growth of sectors involved in halal . The master plan worked effectively , and many achievements could be observed after five years of its implementation .
Making halal products readily available
Mohd Naim said the essential task was to find ways to sustain and maintain halal products and bring more industries to penetrate the global halal market .
“ This is the most important thing that we need to collaborate and work on together . It doesn ’ t matter which State wants to be the champion , but the ultimate target is to make sure our halal-certified products are available on
From left : Mohd Naim , Mat Ghazali , Moohamad Ropaning and Hanisofian Alias . the shelves .
“ The problem we face when we travel overseas is to see our halal products available on the shelves . This is one of the major issues that we need to overcome ,” elaborated Mohd Naim , pointing out the availability of the neighbouring countries ’ products in the global halal market .
“ Do we just look at their products while we have many products that have the potential to be marketed globally ?”
Mohd Naim said other than the comprehensive halal ecosystem , the country must also have more competent halal personnel , especially among the younger generation . He stated having a sound system and enough skilled human capital would help realise the goal of Selangor and other States to be the global halal gateway .
Continuous improvements for halal
Mohd Naim shared that JAKIM continuously improved Malaysia ’ s halal certification and the related ecosystem . The department had also embarked on its digital journey due to the pandemic .
“ The initiatives taken by the federal government is to complement all States , and to bring the whole of Malaysia to penetrate the global market , especially to the Organisation of Islamic Cooperation ( OIC ) countries .”
Hanisofian then shared that HDC started to draft the Halal Industry Master Plan 2030 in 2018 and stated that Malaysia ’ s main agenda was all about internationalisation . However , after the pandemic , he said the government must also focus on reforming the country .
He then pointed out that many of Malaysia ’ s export and investment achievements were dominantly contributed by the large and multinational companies .
“ This is not wrong , but we ask ourselves , where are our SMEs ? So , the focus on SMEs is very crucial . We are now actively engaging SMEs to have a shift of mindset . It is a new era of digitalisation , but the previous issue that we faced must also be addressed . We need to be innovative and produce more high value-added products .
“ We must look at the supply chain of each sector and identify certain gaps that need to be addressed inside our halal industry . We cannot take one approach to solve problems in different sectors .”
ENSURING THE entire supply chain complies with halal standards and regulations is essential to increasing the integrity of halal businesses . Therefore , having stakeholders from different industries participate in the halal journey will facilitate countries in moving the halal ecosystem further .
During the Selangor International Halal Convention ( SELHAC ), a panel discussion titled “ Strengthening the global halal ecosystem ” discussed the importance of different sectors in enhancing the global halal ecosystem .
The panellists during the session were Dato ’ Azman Shah Mohd Yusof , CEO of Northport ( Malaysia ) Bhd , Iwan Budhiarta , Head of International Business Development , Ikatan Saudagar Muslim Indonesia ( ISMI ) and Rizal Mohd Yusof , Head of SME Banking , Bank Islam Malaysia Berhad ( BIMB ). TS Fadhli Ab moderated the discussion . Rahman , Head of Programme ( Halal Industry Management ), Kolej Universiti Islam Antarabangsa Selangor ( KUIS ).
Importance of halal logistics Aside from being the 12th busiest port
Strengthening the global halal ecosystem
globally , Northport is also the first port in Malaysia to get halal certification for its warehouse operations .
“ The initiative is to turn Selangor , especially Port Klang , into a gateway for halal trades . We have been championing that and do our expeditions ,” said Azman , adding that Northport ’ s first successful expedition was with Weifang Port , Shandong Province , China .
Companies face logistics issues
Northport ’ s engagement with companies participating in MIHAS 2016 discovered that one of the factors that held the businesses back from penetrating the global halal market was the logistics issue .
Supporting the halal financial needs
Being at the centre stage of Islamic financial institutions , Rizal said Bank
Islam looked into SMEs ’ halal ecosystem .
He revealed that the Bank worked with related institutions like Halal Development Corporation ( HDC ), Malaysia Investment Development Authority ( MIDA ), Malaysia External Trade Development Corporation ( MATRADE ) and the Department of Islamic Development Malaysia ( JAKIM ) to facilitate the SMEs .
Rizal then shared that Bank Islam allocated RM100 million through its Go Halal Fund for companies that wanted to get the halal certification , halal consultation and working capital to expand further .
The Go Halal Fund is the Bank ’ s collaborative initiative with HDC . Bank Islam also works with MATRADE on the SME Exporter Financing Package .
“ The SME ecosystem is not about having two organisations helping the SMEs . It is about having a comprehensive specific function of these government agencies and banks . We are more than ready to help the SMEs grow and look into halal financial needs .”
“ Having financial capacity alone will not suffice ; it ’ s always about developing the human capital and knowledge capital ,” said Rizal , sharing that Bank Islam ’ s collaboration with SME Corporation Malaysia ( SME Corp ) emphasised developing the skills of micro-businesses .
Halal and Shariah initiatives in Indonesia
According to Iwan , halal economic potential is not yet maximised in Indonesia .
“ Bank Indonesia implements various Islamic ecosystem development programmes in agriculture , food , fashion , tourism and renewable energy sector . The development of the Islamic economy in Indonesia also observes the profile of future consumers . Right now , the millennial generation plays an important role in developing the economy throughout the world , especially in Indonesia .”