halal hub

Development of Halal Industry in Malaysia

Dato’ Seri Jamil bin Bidin, CEOIMT-GT Symposium on Halal Science and Management

Halal Products Research Institute, University Putra Malaysia 21 December 2009

Different Sectors of Halal Industry

Halal Product and Services

Foods

Pharmaceutical

Toiletries &Cosmetics

Food Additives

Food Supplements

Drugs and vaccines

Islamic Finance

Leather Products

Insurance

Potential Size of Halal Market

35

129

5

6

23

10

FMCG sector

Nutraceutical

Confectionery

Cosmetics & personal care

Bakery products

Processed food & beverages

Primary meat“Potential Halal”

market has been quantified as the target market that can potentially be captured

Approximately 67% of potentially Halal products are

categorized as fast moving consumer goods (FMCG)

Food FMCG and primary meat together account for 62% of the market

Source: Euromonitor reports; FAOSTAT

Pharmaceutical

3

Feed & Farm Management

Ingredients

Manufacturing/Processing

Logistic

R&D/Technology

Finance

Communication/Branding

Halal Value Chain

Protecting the integrity of the ENTIRE Halal value chain is of utmost IMPORTANCE

Are the animal feeds from non-halal based products?

Emulsifiers, gelatine, preservatives, colouring, flavouring

Who monitors & how do you verify?

Warehousing, Transportation

Alcohol extraction methods, enzymes & Bacteria

Haram sources of Income when there is alternatives

Vegetarian Brand? Is it acceptable to brand vegetarian

pork as halal?

Through Halal Integrity

Halal Integrity

Training

Employment opportunities for Muslims with skills in Syariah & Halal food technology

Placement of Halal compliance officers at every Halal producers’ premise.

Create Halal training providers and Halal trainers

R&DUsing R&D findings & market information to create new businesses, e.g. palm oil

as an alternative to gelatine, Halal gelatine and consumer products

Certification

Increasing the number of trained certification auditors

Outsourcing of Certification activities such as laboratory analysis , auditing etc.

Initiatives

Strategic Thrust

Through Industry Development

Industry Development

Malaysian Halal

Champions

Halal Parks

Trade Network

Industry Support

• Create Malaysian Champions programme from a selected group of local producers with the potential to become global Halal players

• To target at least 10 companies/products a year using SMIDEC’s SCORE system

• Opportunities for Halal producers to increase their production and efficiency by providing the necessary infrastructure & amenities within the Halal Parks

• Create trade networking among Halal producers within the value chain

• Assist and develop Halal compliant service providers in logistics, cold chain and warehousing and packaging materials etc

• Networking through HDC’s trading platform, affiliated partners, certified & accredited companies under the HDC- promoted standards to gain market access, seek joint venture partners, technology transfer, contract products & outward investments

• Integrating Malaysian companies into regional and global network

• Create a HELP DESK to nurture and provide assistance to all SME’s in the country for Halal products

• 1-800 880 555

Through Brand Development

Branding & Promotions

Events

Branding

Market Intelligence

• Nationwide Halal Road Shows throughout the country with the participation of SEDCs,UPEN, MNCs, local producers and industry players to identify potential halal producers

• Provide the most up-to-date market intelligence on the worldwide Halal markets

• Publication on HDC Halal Directory 2008 with the listings of Halal producers in operation in Malaysia

• Conduct Market Intelligence Study and Publish ‘Halal Profile : Malaysia 2008’

• Increase awareness among people of all faiths and culture on Halal, HDC, and Halal Malaysia for Malaysian halal products to gain distinctcompetitive advantage

• Identify potential Halal brand names and provide the necessary assistance in terms of branding

Components of an Effective Halal Hub

Halal Reference Centre

Services

Islamic Banking & Finance Halal Logistics Halal Tourism

+Halal Reference Centre

Certification Halal Training R&D+I Standards Development

Enablers

Human Capital Legislation Incentives

Current Situation Halal Ecosystem / Hub(“Zero” GDP Value) (High GDP Value)

Production

Specialty Processed Food Ingredients Pharmaceuticals & Personal Care Products Integrated Farming

Phase 2 : Implementation Programme

Establish Malaysia as one of the preferred locations for Halal-related businesses

Establish Malaysia as the global knowledge

base on Halal

matters

Promote global

recognition of Malaysia Halal brand

Promote 3 main industry-specific Halal

clusters nationally

Halalingredients

Halalprocessed

foods

Halalpersonal

care

Develop strong market/industry capabilities and capacity

Market access –

connecting to global supply chain

Optimum scale of

operations

Increased innovation capabilities

Compliance to

international standards

Phase 2: 2010- 2015

Wealth Creation Halal Reference

Market share of cosmetics and personal care companies

Source : Euro Monitor

Ingredients commonly used in cosmetics and personal care

products

Source: Ethos analysis

Global Market for ingredients by country, 2005

100%= USD 30.4 billion

Source : Euro Monitor

Opportunities for Malaysia through palm oil

Source: Ethos analysis

Incentives

HALAL PARK OPERATORS

Income Tax Exemption(100% tax exemption for 10 years) OR

Investment Tax Allowance (100% for 5 years)

Exemption on import duty for cold room equipment

HALAL LOGISTIC OPERATORS

Income Tax Exemption(100% tax exemption for 5 years) OR


Exemption on import duty for cold room equipment

Compliance to the min infrastructure requirements for Halal Logistic Operations

HALAL INDUSTRY PLAYERSIncome tax exemption on export revenue (100% for 5 years) OR


Exemption from import duty on raw materials

Double Deduction on expenses incurred in obtaining international quality standards such as HACCP, GMP, Codex Allimentarious, Sanitation Standard Operating Procedures etc.

Key Halal Parks Development

Port Klang Free Zone (PKFZ)

An integrated 1,000-acre international cargo distribution andconsolidation centre situated on Pulau Indah, Port Klang.

It was develop by The Port KlangAuthority (PKA), the owner of the site, is undertaking the development of PKFZ.

PKFZ Sdn Bhd in cooperation with HDC has dedicated an area of PKFZas the Halal FlagshipZone in 2008.

The development consists of:•50 acres industrial land•60 units of ready built light industrial units (LIUs)The open industrial land activities focused on several business activities such as;•Distribution of frozen meats•Manufacturing of condiments and food products•Manufacturing food and beverages•Manufacture and distribute pharmaceutical and healthcare products.

On LIUs, the main businesses include:•Manufacturing of herbal products•Processing and bagging of lentils, dhal, spices, chilies and beans•Manufacturing foods and beverages, packing palm oil (edible) and mineral water•Manufacturing of processed meats and foods.

PKFZ Sdn Bhd also offers a multi-storey business complex, hotel and convention hall whichserves as the business centre.The business arrangement with PKFZ is only for lease and the rate are as follow:

•Land – RM1.80 per sq ft per annum•LIU – RM18.00 per sq ft per annum (5,487 sq ft)•Business Complex – RM22.80 per sq ft per annum


Selangor Halal Hub

The Selangor Halal Hub in PulauIndah was officially launched in 2003. It is fully endorsedand supported by the Selangor State Government. Central Spectrum (M) Sdn Bhd (CSSB), asubsidiary of Kumpulan HartanahSelangor Bhd is the developer of the Selangor Halal Hub.A total of 325 acres will be developed for the Phase I, 390 acres for Phase II, and 281 acres forPhase III.

Facilities

•Centralised storage for regional distribution

•Freight management

•Haulage, transportation and distribution

•Packaging / Labelling

•Transhipment centre

•Sterilisation and Fumigation

•Product inspection and lab test service

•Frozen and chilled storage for regional distribution

•Halal logistics services

•Repackaging and processing

•Certification for export markets - European Union / U.S. / Middle East

•Shipment Consolidation

•Reefer Distribution-domestic and regional

•Ocean freight, Distribution, freight forwarding and cold / dry warehouse

•Industrial lots at the Selangor Halal Hub are available for sale at RM22.00/sq ft.

The Selangor Halal Hub has the following infrastructure and amenities:

•Site clearing and earthworks

•Roads and roadside drains

•Water reticulation to the vicinity of the plot

•Electricity reticulation mains to the vicinity of the plot

•Telephone ductworks and manholes to the vicinity of the plot


Tanjung Manis

The Tanjung Manis Halal Hub in Sarawak is the largest halal hub in Malaysia for upstreamand downstream halal food and manufacturing activities. It covers an area of 77,000hectares with integrated planning by its operator – Tanjung Manis Halal Hub SdnBhd.

With 77,000 hectres of land available, Tanjung Manis Halal Park offers investors tremendouspotential and opportunity to capture the growing demand for halal products from bothMuslim and non-Muslim markets globally. Strategically located on the west coast of Sarawak– the fastest growing and dynamic state in Malaysia – one of its advantages is its fast-trackapproval for halal ceritifcation.

For Phase I of the project, about 600 acres will be developed into

various components that would include:

R&D Center

- Tilapia hatchery

- Chlorella culture

Tilapia pond and cage culture

Downstream processing industries

- Fish fillet

- Collagen and gelatin

Chlorella industries

- Bio-tech prawn farming

Privileges & Benefits

Privileges&

Benefits

Brand Development

Program

International Marketing & Promotional

Program

Knowledge Management

Program

HAC’s Mark

Information Technology

Adopting Program

Others

Financial

Advisory

Programme

Application for Financial Assistance

Application

Screening /

evaluate /

recommendation

Request for

recommendation

Reason

Process

the

application

Process

the

application

Process to

disbursement /

documentation

Money

disbursement

Customer / SMEs

Financial Institution

Approved Declined

Objectives of WHR Summit

•To provide an international platform for researchers

to introduce, explore and discuss latest updates on

research findings, emerging technologies, trends,

issues and challenges in Halal industry.

•To encourage more research on products;

processes, services and standards relevant to Halal

industry and to appreciate efforts taken in putting

them into practices (i.e. commercialization).

Objectives (Ctd)

•To establish an international network among scientists,

researchers, academicians in developing a recognized

International Reference Center in Syariah and Scientific

research in Malaysia.

•To foster the development of knowledge based human

capital which is vital for the growth of Halal industry in

Malaysia and globally.

•To promote Malaysia as the centre for Research and

Development (R&D) related to Halal industry.

Planning is already underway towards the

3rd Malaysia World Halal R&D Summit 2010,

which has been set for

24-25 June 2010, in

KUALA LUMPUR, MALAYSIA

LET’S MOVE

TOGETHER

MOVING TOGETHER

Indonesia Malaysia Thailand Growth Triangle (IMT-GT)

– Developmental Plans from 2007-2011, with the following programmes:

• Plaza IMT-GT for retailing and distribution

• Annual Halal Expo and Maulud Nabi Celebration

• Food Safety Project, Thailand

• Halal Highway Rantau, Malaysia

• Halal Trading Project

• Halal Science Laboratory Network

• Halal Hotel-Kitchen and Restaurants

• Halal Medical Hub

• International Halal Science Symposium

• Business Incubators for Halal Products and Services

Halal Industry Development Corporation 28

Global Halal

Market

Malaysia (Standard, Training,

Certification, Logistics)

Indonesia

(Raw ingredients, Certification, Distribution)

Thailand

(Semi-processed,

Processing and Packaging)

FUTURE POTENTIALS

• IMT-GT countries need to work together to realise the Global Halal Hub (Halal Industries)

• Complement each other is the only way forward to add value to ASEAN productivity

• United we can fulfilthe global needs but divided we are not going anywhere


Source: World Muslim Population, Wikipedia

OCEANIA

(1.49%)SOUTH AMERICA

(0.42%)

NORTH AMERICA

(2.19%)

EUROPE

(0.42%)

AFRICA

(47.81%)

ASIA

(27.24%)

Regional Clusters – Inbound and Outbound

30

IMT-GT

(ASEAN)

INDONESIA

HDC

THAILANDMALAYSIA

HALAL R&D

SECRETARIAT

-Road Map

-R&D Fund

EXPORTER OF

HALAL PRODUCTS &

SERVICESIMT-GT

ASEAN: FUTURE WORLD HALAL BASE

• Many ASEAN countries have low “per capita trade-able food consumption”. Indication: High potential in future demand.

• Currently, chicken meat intake per-capita in Indonesia is 4 kg/year. Forecast in 7-8 years, increase in intake per-capita to 8 kg/year, demand increases for chicken meat to 1.3 million MT.

• With the increase in economy, rise in ‘disposable income’ and increasing awareness on Halal; Halal products to be traded particularly meat and meat-products will increase ‘exponentially’.


NEW MARKETS

BRIC (BRAZIL, RUSSIA, INDIA, CHINA)

Market Performance – Past ten years

BRIC + 267.4%

Emerging Markets + 129.1%

World Markets + -13.6%

GDP Growth Projections for 2010 (%)

Brazil 2.5

Russia 1.5

India 6.5

China 8.5

Advanced Economies 0.6

USA 0.8

Europe -0.3

Demographic and Economic Characteristics

- Strong GDP Growth

- High Infrastructure Spending

- Increasing Middle Class

- Rich Resources

SUMMARY

• Halal is a business proposition, ready to be the next

world market force

• Halal products is universal, suitable for everybody

• Require strategic marketing promotions and global

networks

• Standard, knowledge and experience are crucial for

Halal Competency

• Halal Training is important for human resource

development in the Halal industry

• Integrity of Halal products from farm to fork is

important and made possible by competent

personnel and through halal certification

• United and complement each other is the way

forward for IMT-GT Business Sector

THANK YOU

halal hub

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