The halal food industry is booming as halal consumer goods, which have a benchmark for safety, hygiene, and quality assurance, are becoming more popular and highly sought after worldwide, even by people of other races and religions. By 2030, the halal market is expected to grow to USD 5.0 trillion while domestic growth is estimated to reach USD 113.2 billion.[1]
For years, the government has been working hard to establish Malaysia as a global halal hub. The Third National Agricultural Policy (NAP3), 1998-2010 states that to position Malaysia as an international hub for halal food, it is necessary to enhance the competitiveness and add value to the whole supply chain[2].
However, based on the findings from a study on the Halal Hub Sustainable Framework by Dr. Hasbullah Othman, a senior lecturer from INTI International University’s Faculty of Business and Communications, and three other researchers, despite the growing demand for halal products Malaysia is still lacking in halal logistics.
“We need to have an effective and efficient halal hub to guarantee proper management of the whole chain of business and operations,” proposed Dr. Hasbullah.
As we aspire for global halal hubs, debates sparked over the current implementation of the logistics park operation and the ideal halal hub to be modelled. Furthermore, there are discussions about the understanding of a halal hub and the standard requirements to achieve a global halal hub because the concept of the halal hub can have broad meanings.
According to Dr. Hasbullah, “We define hub as a designated area for operations related to transport, logistics and the distribution of goods, regional or national and/or international transit which are carried out by several operators. It’s preferable to have intermodal facilities to support logistics activities as a whole.”
Halal in Islam means permissible or lawful and the growth in demand for halal supply chains has encouraged the creation of halal industrial zones in Malaysia.
“Halal logistics is expanding due to high demand in the halal industry, and it is the only way to determine the status of halal products. Halal hubs refer to the entire supply chain management including process and activities, from raw material to customers, which adhere to Shariah requirements. It also encompasses a variety of parties, places, and non-halal products too,” Dr. Hasbullah added.
He emphasized that Malaysia is well positioned to establish itself as a halal hub because it is a Muslim country, has JAKIM (a department of Islamic Development Malaysia that manages the administration of Islamic affairs), and has set in place halal standards by providing halal certificates that are globally recognised.
Dr. Hasbullah Othman said his research provides a better understanding and guidelines for key players in the halal industry to further advance their operation services to meet halal standards and to be more competitive in expanding the whole chain.
According to Dr. Hasbullah, the preconditions for best practices of halal hubs in Malaysia includes an integrated logistics hub, halal supply chain, transportation, warehousing, packaging, and material handling where integrity must take place to avoid cross contamination during the operations and process. It will also clear doubt among consumers at the point of consumption.
“I believe that integrated logistics hubs should offer total logistics solutions and efficient end-to-end services to support niche demands from various sectors while also being Shariah compliant,” he said.
Dr. Hasbullah said Shariah compliance ensures that the total chain supply is halal and toyyib. In Islam, halal and toyyib complement each other and the toyyiban value emphasizes on the quality and safety of the products.
“This is especially during the storage and transportation of halal products. JAKIM’s stringent procedure exists to ensure that all activities involved in the halal industry are halal certified,” he said, adding that companies that have registered halal certification with JAKIM using Malaysian Halal Logistics Standard: MS2400-1-200 Distribution and MS2400-2-2010 Warehousing can handle movement of halal goods.
In the halal process, it is necessary to separate halal and non-halal products to ensure that halal products are not mixed with non-halal products. Equipment and tools used must be different to guarantee Shariah compliance – even the freight carrier. This process takes place during transporting and warehousing to packaging and material handling, where products need to be labelled with a halal or non-halal symbol.
“Separating halal and non-halal products is essential and key players should critically consider implementing an advanced halal processes and procedures to protect and maintain the halal integrity of halal food products to ease any concern,” said Dr. Hasbullah.
Halal products encompass a wide range of industries including food and beverage, pharmaceutical and health supplements, cosmetics, toiletries, textile and apparel, and hospitality and tourism.
He is optimistic about building successful and efficient international halal hubs in Malaysia as it will benefit halal industry sectors and allow the country to become significant player in the global economy. Additionally, the existence of government agencies to improve halal standards, enhance commercial and industry development, as well as branding holds great potential for economic growth.
“Halal hubs are seen as a key for socio-economic growth. The potential for commerce and economic progress is significantly influenced by how efficiently goods can move through a system to the final destinations provided with halal integrity. By leveraging the interconnected businesses and suppliers, a logistic hub can increase productivity, drive innovation, stimulate new businesses, generate employment, create sustainability, and contribute to the Gross Domestic Product (GDP),” he concluded.
[1] www.hdcglobal.com/wp-content/uploads/2020/02/Halal-Industri-Master-Plan-2030.pdf