By 2030, it is estimated that the global halal market will reach US$5 trillion in value while the domestic market is estimated to reach US$113.2 billion.
Malaysia's halal industry contributed about 7.8 per cent to the country's gross domestic product (GDP) in 2019.
The halal industry is expected to contribute up to 8.1 percent to the GDP and export revenue is expected to reach RM56 billion in 2025 as stipulated in the 12th Malaysia Plan issued by the Economic Planning Unit (EPU).
The significant figure shows that Malaysia has been successful in using the potential it has as a Muslim-majority country.
Entrepreneurs need to seize the opportunity by obtaining halal certification for their products.
A halal certification will not only allow entrepreneurs to participate in the halal industry but will also add value to their products, as a halal certification has always been associated with good quality and reputation.
Increasing the numbers of Small and Medium Enterprises (SMEs) and Cooperatives in the halal industry is crucial as they contribute significantly to Malaysia's economy and allows them to drive the sector.
Besides existing certifications such as the Makanan Selamat Tanggungjawab Industri (MeSTI) and Good Manufacturing Practice (GMP), Malaysia's halal certification has been identified as one the more important standards in the food industry.
Recognising the importance of the halal certification, the Entrepreneur and Cooperative Development Ministry (MEDAC) has created programmes to raise awareness on the importance of halal certification among entrepreneurs.
MEDAC has also introduced halal-related programmes to raise the standard of entrepreneurs in the halal industry.
These programmes cover the development of human capital, product upgrading, product manufacturing enhancement and greater market access.
The four main programmes are Halal Outreach Programme for Entrepreneurs (HOPE), Product Transformation Programme (PuTRA), Halal Technology Transformation Programme (HTTP) and International (Product Registration Incentive – PRInce and Market Access Incentive – MASSIVE).
These programmes are in line with the halal Industry Master Plan 2030 (HIMP 2030) under the 6th Strategic Thrust: Producing More 'Halal Champions' among local industry players.
To execute the halal-related programmes, MEDAC has appointed the Cooperative Commission of Malaysia (SKM), SME Corp. Malaysia and Tekun Nasional as the implementing agencies.
Committed to developing entrepreneurs and cooperatives
Two vital elements for entrepreneurs and cooperatives in producing halal products are product development and manufacturing process. MEDAC has introduced PuTRA and HTTP to cater for such elements.
PuTRA emphasises on product development in particular the enhancement of packaging, labelling and branding. This enhancement will add value to the product and gives an edge to entrepreneurs and cooperatives.
HTTP is being implemented with the help of technical consultants to identify manufacturing process improvements and proposing technical solutions that will lead to better production capacity and improve yield.
HDO to guide halal certification applications
The initial phase of HOPE is to provide Halal Professional training to 100 officers from various agencies as a Halal Development Officer (HDO).
The next phase is for the HDOs to identify potential SMEs and Cooperatives, and also provide guidance on halal certification process. Agencies involved are SKM, SME Corp. Malaysia and Tekun Nasional where their HDOs are well represented in every state.
The Halal Professional training was conducted based on the approved syllabus of Jakim's Halal Professional Board.
MEDAC plans to train another 100 officers from other government agencies that have the authority in developing entrepreneurs as well, such as the Agriculture, Food and Industry and Rural Development ministries.
Apart from the HDO programme, MEDAC also provides RM200 grants for halal certification fee to every entrepreneur.
Challenges
The Covid-19 pandemic has become the biggest challenge in the 21st century. For entrepreneurs, business survivability is their main priority.
While this is understood, it also has placed product certification, such as halal certification as secondary for their business decision. Nonetheless, MEDAC will continue to encourage more entrepreneurs to acquire halal certification.
In regards to the Covid-19 pandemic, the government has identified recovery action plans to boost the economy as outlined in the National Recovery Plan (NRP).
Based on the NRP, MEDAC has introduced a recovery action plan for entrepreneurs under the Entrepreneur Rehabilitation Framework (RPUM).
MEDAC uses the 5E approach (Enculture, Empower, Enable, Energise and Engage) and this approach is being implemented in two tranches, that is "Quick Win" from August to December and "Medium Term" from January to December next year.
The other challenge is to ensure that efforts by the government can reach as many entrepreneurs as possible.
Therefore, MEDAC has collaborated with government agencies, including Halal Development Corporation Berhad (HDC), Agriculture and Food Industry Ministry and Sirim.
Implementing agencies to execute halal-related programmes
SKM principal assistant director of the Cooperative Development Division, Zainudin Sulaiman, says MEDAC's aspiration for entrepreneurs and cooperatives to succeed in the halal sector can be done with the implementation of the halal-related programmes.
"It is crucial for implementing agencies to ensure that the ministry's goals can be achieved.
"SKM will continue to encourage and provide guidance on halal certification, and hopefully more cooperatives can participate in the halal sector."
SME Corp Malaysia chief executive officer Rizal Nainy said 62 SMEs had participated in the halal-related programmes implemented by SME Corp. Malaysia.
"This is a positive development as SME Corp. Malaysia's main task in implementing the halal-related programme is to provide assistance to SMEs in the halal sector.
"SME Corp. Malaysia as one of the implementing agencies is also working on initiatives with HDC to boost the capabilities of SMEs," he said.
Tekun Nasional managing director and chief executive officer Datuk Adam Abd Ghani said Tekun has identified 60 potential entrepreneurs to obtain halal certification.
"Tekun Nasional is committed to assist micro entrepreneurs in obtaining halal certification and product development, including the development of branding, labelling and packaging.
"The goal is to help and guide entrepreneurs to improve the product quality and productivity through packaging innovation and equipment upgrading, machinery and technology adoption in the manufacturing process," he said.
Jakim Halal Management Division director Bukhari Md Akhir said the collaboration with MEDAC can help boost the economy of the ummah through entrepreneurship and cooperatives activities.
"Entrepreneurs and cooperatives are encouraged to apply for the halal certification as it provides a value-added element to existing products and will help businesses to expand their market in the long run."
"As of now, JAKIM has recognised 84 foreign halal certification bodies from 46 countries around the world," he said.