04
Industry
@ Halal | September-October . 2021
BY KHIRTINI K KUMARAN
THE SOUTHEASt Asia region , whose nations are members of The Association of Southeast Asian Nations ( ASEAN ), is home to about 260 million Muslims , with the majority living in Indonesia , Malaysia and Brunei . Hence , the region is the global hub for halal trade potentially .
Apart from the three Muslim majority countries of ASEAN , the other member countries , such as Thailand , the Philippines , Singapore and Myanmar , are also competing to dominate and lead the global halal market .
Malaysia , aiming to establish itself as a global halal hub , seems to be falling behind Indonesia , Thailand and even Vietnam .
One of the factors in expanding and accelerating the halal market both globally and regionally is integrating halal small and medium enterprises ( SMEs ) into the halal export business .
@ Halal spoke with the President of the Malaysian Exporters Association ( MEA ), Prof Dr Abdul Kabur Ibrahim , for his insight on Malaysia SMEs and their potential to tap the halal export market .
Abdul Kabur is also the Founder and President of the Malaysian Training Providers Association and was previously attached to the Ministry of International Trade and Industry ( MITI ) and the Malaysia External Trade Development Corporation ( MATRADE ), as well as Malaysian Administrative and Diplomatic service ( PTD ).
What are your thoughts about Malaysia ’ s current halal exports and their potential in driving the economy ? At the moment , we are not the leading exporter of halal products in the world .
Brazil , Argentina and Australia control halal meat export . Meanwhile , halal manufacturing is controlled by Thailand .
While we are still behind , many buyers still prefer Malaysia because we are a Muslim country . Malaysia ’ s halal certification is the only one that is issued by a government body , the Department of Islamic Development Malaysia ( JAKIM ).
Other countries rely heavily on nongovernment organisations ( NGOs ) for halal certification . The integrity of halal enforcement and certification is crucial to the success of the halal business .
To date , JAKIM ’ s halal certification and logo have gained a high added value to a product and reputable commercial value , which is highly recognised and recommended in the international market . This also gives Malaysia the added advantage in driving the halal economy .
Another opportunity for Malaysia is the halal cosmetics and toiletries market , which is not targeted by many countries . We could dominate this sector because we have the standards and several big producers of cosmetics .
How do you see exporting SMEs adapting to the whole halal ecosystem ? In Malaysia , we have roughly about 51,000 SMEs . Only 20 per cent are exporting , while the remaining 80 per cent are competing locally . And of the SMEs that are exporting do not have an export department or talent .
When it comes to Malaysian SMEs in the halal exporting ecosystem , there are three categories ; SMEs not ready for export ( too small );
• SMEs prepared to export but don ’ t know how to ; and
• SMEs that are already exporting but unable to penetrate or expand into new markets
• How does MEA assist these exporting
Prof Dr Abdul Kabur Ibrahim
Beefing up
SMEs ’ halal export potential
There are many elements that SMEs need to improve on before exporting their products
SMEs in adapting to the halal ecosystem ? At MEA , we mainly focus our services on SMEs . Primarily , we provide coaching on the halal export business as well as the different markets .
We also help small SMEs to expand their capacity before penetrating the export business .
In terms of helping to secure the required funding , we work with MATRADE , SME Corporation Malaysia ( SME Corp ), SME Bank , Unit Peneraju Agenda Bumiputera ( TERAJU ) and Majlis Amanah Rakyat ( MARA ).
What are some essential elements that halal SMEs need to consider before exporting their products and services ? Most importantly , they need to have the capacity to fulfil the export demand . They also need to identify the type of export certification required for the specific product and the market they wish to penetrate .
Correct labelling is equally essential . For example , in Saudi Arabia , specific labelling can be sensitive , and you could go to prison for that .
Next is the packaging designs . I ’ ve come across foreigners purchasing gift box packed snacks , which are packed in Thailand , in bulk . And they don ’ t want to buy the same snacks packed in Malaysia because the packaging design is terrible .
What kind of programmes and services does MEA offer to SMEs in general ? We provide training and coaching , generally on export and international trade .
We also have consultancy services , where we are the only one in the region to provide this service to other ASEAN countries . The consultancy covers all aspects of exports , including required certifications , types of packaging and designs , and correct labelling . We also provide consultation on different markets , how to do market research , how to enter other markets and to identify the cultural difference
We are also developing export talent to assist SMEs . We offer a certified export professional programme under the Ministry of Higher Education . We are working with
Universiti Kebangsaan Malaysia ( UKM ) to train 25 fresh graduates , who will be sent to assist SMEs in exporting once certified .
We also organise talks and seminars on specific topics such as grants given by MATRADE and manage the National Export Conference every year . We also organise trade missions , sometimes on our own or in collaboration with MATRADE . In 2019 , we organised eight successful trade missions .
How is exporting halal products different from non-halal products ? Nowadays , halal products are not just seen for the Muslim market . It is now considered a wholesome clean , and healthy product . I ’ ve recently read that people are going for halal products even in the Netherlands as they see them as beneficial .
So now , when you export halal products , it is not only for Muslims but also for non-Muslims .
How do you see the future of the export industry with the current Covid-19 pandemic ? Will it continue to adopt a virtual or hybrid approach in promotion and marketing ? Before the pandemic , we only looked at physical exhibitions , sending trade missions to participate and listing products in the market . But now , things are moving towards a virtual trade mission with online participation , promotion and business matching .
Many Malaysian exporters are adapting to this new concept and participating in virtual programmes . Even if the pandemic were to come to an end , the virtual platform would still be here because it is beneficial and very cost practical .
What are some lessons that the pandemic has taught the export industry , and what is your hope ? The pandemic is a big issue for the export business because production has been closed down , and supply has been delayed and restricted . But now , the government is slowly lifting some of the lockdown restrictions , so production is coming back . Hopefully , our export business will take off again .