The global halal product market is burgeoning. It is expected to grow from having been worth US$45.3bil in 2016 to over US$58.3bil in 2022.1 Islamic finance dominates the global halal industry in constituting 43% share of the market, followed by halal food products at 36%.2 The global market revenue of halal food is projected to increase from having been worth US$1.25tril in 2016 to US$2.57tril in 2024.3
The types of halal food products are growing as well, and there is even halal foie gras and boba tea today. However, the “halal” concept is not limited to food and beverages, as is commonly misconstrued. Apart from Islamic finance, there is also halal manufacturing, logistics and pharmaceuticals, among others.
The concept of halalan thoyyiban (permissible and good) is a standard to assure the quality of products in various segments. “The concept of cleanliness and hygiene derived from halalan thoyyiban is universal and applicable to all,” says Penang State Exco for Domestic and International Trade, Consumer Affairs, and Entrepreneurship Development, Datuk Abdul Halim Hussain.
“The Penang International Halal Hub (PIHH) was established by the state government in 2008 to steer the direction of halal development in Penang,” says Abdul Halim, who is also chairman of Penang International Halal Development (Halal Penang). “There are 10 core elements PIHH focuses on: halal manufacturing industries, entrepreneurship development, halal logistics, halal agro-based industries, halal research and development, halal tourism and hospitality, halal life sciences, halal k-workers, Islamic finance, and marketing and promotion.
“In order to fulfil the demands of economic growth, the state government under PIHH’s supervision plans to take the initiative in providing ‘on-the-ground training’ for business and industry players to fulfil the requirements for executive and halal audits, which is a main aspect to support integrity and industry growth. It will inadvertently create job prospects in the halal sector.”
The international delegation at the 2019 Penang International Halal Expo & Conference. Datuk Abdul Halim Hussain is third from left, while Mohamad Firhan Mohamed Ghouse is first from left. Photo: PIHH.
Another aim in developing the halal industry is to grow local entrepreneurship. “The halal industry offers opportunities for local entrepreneurs to enhance the quality of their products which are equipped with uptrend technology, giving them high-value in the domestic and international markets.”
“Halal Penang collaborates in programmes and activities with various state and national agencies, such as Halal Industry Development Corporation (HDC), Malaysia External Trade Development Corporation (MATRADE), Penang Development Corporation (PDC), InvestPenang, Penang Institute, the Northern Corridor Implementation Authority (NCIA), SMECorp, Majlis Amanah Rakyat (MARA), the Malaysian Investment Development Authority (MIDA), Unit Peneraju Agenda Bumiputera (TERAJU), business chambers and many more.
“PIHH recently cooperated with the Perak Halal Corporation in areas such as trade industry, logistics and tourism. In terms of research and development, PIHH collaborated with Universiti Sains Malaysia to compile a halal pharmacopoeia, as well as in outlining the Halal Executive and Halal Auditor course, which has become the syllabus for core and elective courses at the university level,” says Abdul Halim.
Broadening the Scope
According to the general manager of PIHH, Mohamad Firhan Mohamed Ghouse, “PIHH and its strong affiliation with the Penang State Halal Management Division has played a significant role in providing guidelines and consultations for obtaining halal certification since 2008. For the record, from 55 companies in 2008, more than 600 companies today have managed to receive halal certification; most of these companies are in the manufacturing, food services, logistics, cosmetics, pharmaceutical as well as in original equipment manufacturing (OEM) sectors.”
Observing the changes, Mohamad Firhan says, “The previous government based halal concept and development strategies on a three-corner approach – government, private, and public. The execution for this was quite a challenge prior to the 14th General Election as Penang was an opposition state. After the election, collaboration between the federal and state governments has been greater, with both cooperating in the development of the halal industry in Penang.
“Furthermore, the approach and strategy for the halal industry has become more specific. With the vision of Penang as the gateway into the Asean halal industry, the initiative will focus on realising again Penang as a regional trading hub, and on strengthening the halal manufacturing sector, technology, and industry and market networks by going into OEM and original brand manufacturing activities to boost local halal products and services in the global market.”
Into the Future
In the past, the halal industry was seen as a blue ocean market; today, it still has many areas in which it can grow. “Penang was the pioneer in developing the halal industry in northern Malaysia. The industry has undergone a dynamic and progressive process, and with increasing global demand, it is not impossible for it to become a prominent source of revenue for the country,” Mohamad Firhan says.
Looking ahead, Abdul Halim is keen to explore new areas, such as blockchain in food manufacturing and consumer products. “There is much potential for blockchain technology to increase the integrity of halal certification while synchronously offering value-add in the aspects of traceability, transparency and security in halal production,” he remarks.
PIHH will also broaden its network by going into a joint venture with Selangor to be recognised as an ecosystem member of the Muslim Friendly Halal Excellence (MFHE) platform. “MFHE is a strategic international platform that can help halal local companies empower their products and services on the international level through e-commerce, business matching, tourism and promotion. MFHE consists of global industry players from various countries such as Turkey, Iran, Egypt, Nigeria, Bangladesh and Indonesia,” says Mohamad Firhan “Meanwhile, PIHH is also collaborating with various halal agencies on the international level, such as Indonesia, Dubai and Taiwan, and even Chengdu in China.”
Another major project PIHH has embarked on is the Penang Halal Industrial Park (PHIP), which is endorsed by the Penang state government. The idea is to create a hub for various international and local halal business industries in Penang. Located in Central Seberang Perai, Phase 1 of PHIP is allotted for general halal industries, while Phase 2, also known as the Food Zone, is for food manufacturing. A future zone has been gazetted in Batu Kawan. PHIP has been awarded the HALMAS status by the Halal Industry Development Corporation.
“The main challenge PIHH faces now is in optimising and utilising talent capacity building. Also, data analysis in the halal industry should be stressed in the future. These challenges will be the motivation for us to move forward,” says Abdul Halim.
Nidhal Mujahid is just an ordinary man who works as an analyst at Penang Institute. He is inspired by the unique diversity of cultures that exist in Penang.