Formation Of Comprehensive Halal Standard

adopted from HALAL – NEW MARKET OPPORTUNITIES by Hj. Sumali bin Amat (Department of Islamic Development, Malaysia)

(JAKIM website : http://www.islam.gov.my/) 17 November 2006

II. FORMATION OF COMPREHENSIVE HALAL STANDARD

In order to be recognized as halal, products must conform to accepted halal standard.

Unfortunately, the global halal industry still tends to be fragmented with numerous standards and sometimes competing with each others. There is a need for uniform halal standards that impact the various sectors in the market ranging from food and agriculture to shipping and logistics. The same applies to the labelling of various halal standards currently used. An alternative has to be adopted by all parties which should also be internationally recognised.

Being a prominent Islamic country in the world, the Malaysian Government has taken an initiative to address halal standard issue. Department of Islamic Development Malaysia (JAKIM) together with Department of Standards Malaysia, Institute of Islamic Understanding Malaysia and Malaysian Institute of Industrial Research and Standards (SIRIM) have drafted a halal standard. The standard was based on a previous standard developed by SIRIM, known as MS1500:2000.

As halal does not only cover the rituals of Muslim norm such as animal slaughtering, but also encircles all aspects of cleanliness, safety, preparation, storage and purification, the following guidelines have been incorporated into the proposed standard:

General Principles of Food Hygiene (MS1514:2001),
This Malaysian Standard follows the food chain from primary production to the final consumer, setting out the necessary hygienic conditions for producing food which is safe and suitable for consumption.

Food Safety According to Hazard Analysis and Critical Control Point (HACCP) MS1480:1999
This document describes requirements for food safety according to hazard analysis and critical control point (HACCP) system.

The draft was circulated to various countries for comments. The new halal standard, known as Malaysian Standard MS 1500:2004 was finally approved by Government and gazetted on July 10 2004. Due to its comprehensive and explicit nature, the halal standards have been accepted by the United Nations. The credibility of JAKIM Halal Certification has long been recognized by many multinational companies especially those in the region. It has been proposed that MS 1500: 2004 to be a global standard for halal products.

MS 1500:2004 has effectively promulgated Malaysia as the world’s first to issue standards for the manufacturing, preparation, managing and storage of halal food. The standard requirement must be adhered to by manufacturers and producers before halal certificate can be awarded. Some practical aspects of the standard are discussed in Appendix A.

III. HALAL CERTIFICATIONS

JAKIM is given the authority to certify Halal products. Requirements stipulated under the MS 1500:2004 halal standard must be fulfilled before any halal product be awarded halal certificate by JAKIM. To facilitate the manufacturers in the manufacturing process of halal product, JAKIM has also introduced halal guidelines namely ISO/IEC Guide 65 and Malaysian Halal Certification Procedure Manual. These are very valuable sources of reference for halal manufacturers applying for halal certification.

Once halal certificates are awarded, manufacturers can use halal label on their products. The halal label issued by JAKIM is a registered trade mark under Trade Mark Act 1975. Products with halal certificate must all the time conform fully to halal standards.

By getting halal products certified by JAKIM, manufacturers and producers are getting the assurance that their ingredients, its preparation, processing, hygienic and sanitation procedures meet not only the Halal standards, but also consistent with HACCP and other established quality assurance standards. Assurance of quality and wholesomeness can results in the increase in demand for such products.

JAKIM carries out halal conformity inspection through regular monitoring either by spot check/inspection or verbal communication with the companies involved. During the post certification period, any changes discovered without prior approval from JAKIM will result in the certificate being suspended or revoked. These changes may be classified as minor, major or serious offences:

a) Minor – involving hygiene and cleanliness
b) Major – involving the change of ingredients, manufacturers and suppliers, machinery and relocation of the plant.

The above offences (minor and major) will render the certificate to be suspended and subjected to remedial and corrective actions by the manufacturer and require resubmission of application.

c) Serious – involving the use of non-halal ingredients e.g. non slaughtered animals, pork or its derivatives in the production. This will cause the certificate to be revoked and the company to be prosecuted in court.

Halal certificate is valid for two years. The renewal of the certificate is not automatic. Before renewal is granted, the products will undergo thorough inspection process, similar to the one when the first application was made. As halal certification is not mandatory, those with halal certification have a competitive advantage over other food manufacturers.

Adoption of Malaysian Halal Standard for Certification
Malaysia is also an importer of halal products. Certain imported products like meat must be certified halal by approved authority in the country of origin. With regards to halal certification overseas, JAKIM has identified and accredited several local Islamic organisations that are actively involved in the certification of halal products and monitoring products exported to Malaysia.

The Australian and New Zealand authorities for example have undertaken tasks to ensure the acceptance of the halal protocol with Malaysia. This protocol outlined Malaysia’s requirements for meat exports in accordance with Halal guidelines and standards.

It is interesting to note that Australia is amongst the largest red meat export in the world. All sheep in Australia are Halal slaughtered. 28% of sheep exports are to the Middle East and Africa, 6% of sheep exports are the South East Asia. The export focused to more than 120 countries, and has been suppying Muslim countries for more than 35 years.

Bandar MEC to become a halal product centre

(corporate arkib : 23/09/2004 from http://www.utusan.com.my/)

KUANTAN Sept 22 - The former township of MEC in Gambang, near here, is to be developed into a halal product centre in line with a decision made by the state government recently.

Deputy Menteri Besar, Datuk Tan Mohd Aminuddin Ishak, in a recent meeting with Bernama said that the state government had approved the takeover of a 104-hectare piece of land here where 40 hectares of the land had been allocated for the development of the halal centre.

The remaining 64 hectares would be placed under the management of the Pahang State Development Corporation (PKNP) as a reserved area, in case there is an expansion plan in the future.

"Before this, we had identified another location, also in Gambang, for the halal product centre but that place was not as strategic, as it was smaller and also far from the necessary facilities.

"We selected MEC for its high value as well as for its vast area that would easily accommodate any future expansion in the industry," he said.

Tan said this when asked on the latest development on its plans to build a halal production centre in Pahang to be undertaken by a Bumiputera company, Prima Agri-Products Sdn Bhd.

Prima Agri, a fully Bumiputera owned company, was established in 1987, specifically to produce halal meat for the local and international market.

Tan who is also the Chairman of the Committee for Investment, Industrialisation and Felda Affairs, said that opportunities were now open to any parties or individuals wnating to venture into the halal industry as it was a lucrative field.

Asked if the halal products centre would concentrate on halal food products alone, Tan reiterated that the halal sector was a very wide area and was not limited to food production.

"The halal products industry is not just about food alone, it also applies to cosmetics, domestic items and other products," he said.

"Initially however, we would focus on food products as they are the most easy, convenient (to produce) and enjoy high demand from consumers," he said.

Tan said the halal products centre would be also an ideal platform for farmers, fishermen and livestock breeders to up their income level as they could supply their products here for processing and distribution.

"The country is currently taking the efforts to bring back the agriculture sector as one its major sources of income and the opening of this halal products centre is part of that efforts," he said.

He also expressed confidence in Prima Agri as the figure to lead in the development of the halal products, saying that their capability and credibility in the field was recognised both within and outside the country.

He added that the company had proved their worth, having received many awards and accolades including that given by prestigious institutions overseas.

Market Size And Major Market Developments For Halal Products and Services

(Industrial Master Plan 3 : Chapter 21, Section II- Development of Halal Industry)

The halal industry covers:

• food;


• non-food products, including pharmaceuticals, health products, medical devices, cosmetics and toiletries; and
  
• services, including logistics, packaging, branding and marketing, printed and electronic media, and travel and tourism.

(a) Size of the Halal Market

21.04 Information and statistics on the status of the halal industry are not readily available. Until recently, halal products and services have not been viewed as a market in its own right. For example, halal meat was considered simply a part of the meat industry, and not as part of the entire halal supply chain, from cattle farming to meat processing, packaging and logistics. This has placed a limitation on determining the extent of the global and regional markets for halal products and services.

Global Halal Market

21.05 Estimates have been made on the size of the global market for halal products and services.

On foods, it is estimated that the global market value for halal foods is about US$547 billion a year (Table 21.1).

If non-food products, such as health products, cosmetics and toiletries, as well as hotel and catering services, are also taken into consideration, the global market value for both food and non-food halal products is estimated at US$2.1 trillion annually.

The present trend in consumer demand for halal products and services is expected to continue, in tandem with the increasing size of the Muslim population in the world. With regard to investments in the halal industry, it is estimated that the value of the wealth of the Muslim countries, which has been invested and is continuously seeking investments, is approximately between US$800 billion and US$1 trillion.

Regional Halal Market

(i) Asia

21.06 Asia, in particular, Indonesia, Pakistan, India, the People’s Republic of China, Singapore, Brunei, Thailand and West Asia, with a collective Muslim population of approximately 1 billion, is a prime target market for halal goods and services. Within this region, there is also a fast developing halal food production industry being positioned to supply this lucrative market. South East Asia is becoming an important and competitive regional market for halal products, in view of its vast consumer market, fast developing halal food production and progress on halal certification.

21.07 West Asia, with consumers having high disposable incomes, makes it a potential market for not only halal products but also services, particularly travel and tourism. Tourism packages have been developed which cater to the needs of the West Asian tourists. With limited domestic agriculture, the expanding local food production industry throughout the sub-region is largely built on imported raw materials. While the halal market in the sub-region has been primarily based on meat products, there is considerable room for expansion in the areas of non-meat, ready-cooked meal solutions, dairy products, baked goods, and cosmetics and toiletries.

Limitations in the development of the halal industry in the sub-region include:

• lack of focus on developing domestic production in foods, since the economic development of many of the countries has been oil-driven; and
• limited or absence of infrastructure for domestic halal certification. Most halal products are imported. While certification is mandatory, in general, any recognised halal certificate is acceptable.

(ii) Europe

21.08 Europe, including Eastern Europe, has a Muslim population of about 51.2 million and has a spending power of about 30 billion Euros annually. Major retail chains view halal products as part of their business expansion plans, and source a range of halal-certified products to fill new halal sections of their outlets. Major retail chains in the United Kingdom (UK) have an increasingly influential role in the halal industry. In some of these stores, 40 per cent of
their customers are Muslim, who require more halal products, both food and non-food, with a wider product offering.

A report on the UK halal market, published recently by the UK Government, revealed that:

• the Asian population in the UK is growing at 15 times the national average;
• by 2011, about 50 per cent of all London boroughs will have an ethnic majority population;
• retail sales of halal meat are valued at £400 million;
• the majority of Muslim consumers utilise large supermarket chains for their main grocery shopping, indicating a vast retail opportunity for the large chains; and
• 51 per cent of the Local Education Authorities presently require halal meat.

(iii) The United States of America

21.09 With a population of 6 million Muslims, the halal food industry in the United States of America (USA) is substantial and is estimated to be growing at a faster pace than the market for kosher products. The Islamic Food and Nutrition Council of America (IFANCA) assumes a key role in this market.

4 export Halal product centre been identified

Edisi asal : 4 pusat produk halal eksport dikenal pasti

(parlimen - arkib : 23/09/2004 from http://www.utusanonline.com.my/)

KUALA LUMPUR 2 Jun - Kerajaan mengenal pasti empat kawasan yang sesuai dibangunkan sebagai pusat pengeluaran produk halal bagi tujuan eksport iaitu di Pulau Indah (Selangor); Pedas (Negeri Sembilan); Gambang (Pahang) dan Paya Pahlawan di Kedah.

Timbalan Menteri Perdagangan Antarabangsa dan Industri, Datuk Ahmad Husni Hanadzlah berkata, kawasan itu dibangunkan menerusi kerjasama antara pihak kerajaan dan sektor swasta.

Beliau memberitahu, produk makanan halal tempatan mempunyai potensi cerah untuk menguasai pasaran global berdasarkan permintaan tinggi di pasaran dunia disebabkan kualiti makanan yang dihasilkan adalah bersih dan bermutu.

``Kerajaan bersama sektor swasta kini mengambil inisiatif meneroka pasaran produk makanan halal kerana ia mempunyai potensi besar untuk menguasai pasaran makanan dunia,'' katanya pada sidang akhbar di lobi Parlimen di sini hari ini.

Beliau memberitahu, negara mempunyai landasan kukuh untuk memasarkan produk halal kepada kira-kira 1.2 bilion masyarakat Islam di seluruh dunia.

Menurut Ahmad Husni, beberapa negara lain seperti Thailand, Singapura dan Australia turut memasarkan produk makanan halal tetapi permintaan lebih tertumpu kepada negara ini kerana Malaysia adalah sebuah negara Islam.

Katanya, kerajaan Selangor misalnya sudah menyiapkan prasarana lengkap bagi menjadikan Pulau Indah sebagai pusat sehenti produk halal di negara ini manakala Prima Agri Products Sdn Bhd pula sudah mengeksport produk keluarannya ke Eropah.

Menjawab soalan asal Datuk Abdul Rahim Bakri (BN-Kudat) katanya, jumlah pelaburan bagi subsektor pengeluaran makanan yang diluluskan kementerian pada tahun lalu ialah RM1.1 bilion dan pengeluaran produk terpilih pada tahun yang sama bernilai RM9.6 bilion.

``Eksport makanan yang diproses pada tahun lalu berjumlah RM7.6 bilion iaitu mewakili 1.4 peratus jumlah keseluruhan eksport negara,'' katanya.

Ditanya mengenai penggunaan logo halal pada barangan itu, katanya, logo halal itu juga dilengkapi dengan ciri-ciri keselamatan mengikut pematuhan standard antarabangsa.

Selain itu, Jabatan Kemajuan Islam Malaysia (Jakim) dilantik sebagai badan pensijilan tunggal dan membangunkan keupayaan Jakim dan Jabatan Agama Islam Negeri (Jain) sebagai badan berkuasa bagi pensijilan halal.

Beliau berkata, sehingga akhir 2003, sejumlah 2,062 sijil halal dikeluarkan.

Malaysia, a hub in the making for halal food?

(FEATURES ARKIB : 16/02/2004 from http://www.utusanonline.com.my/)

KUALA LUMPUR - Much have been said about making Malaysia a hub for halal food but has the country become one yet?

The Department of Islamic Development Malaysia (Jakim) has been issuing halal certificates since 1974 and if this is taken as a benchmark, the halal issue itself has been around for the last 30 years or so.

Prime Minister Datuk Seri Abdullah Ahmad Badawi, in launching the 2003 Islamic Economic Development Week at Putra World Trade Centre last December has again touched on this halal hub issue.

In his speech, he reminded local manufacturers not only to rely on the halal label to sell their products but also to give emphasis on the qualities of their products in order to turn Malaysia into a hub for halal food.

The Prime Minister also wanted the local manufacturers to gain knowledge on science and technology so as to add value to their foodstuff from time to time.

Without doubt, the government is very serious about turning Malaysia into a halal hub and a committee known as the Technical Committee on Developing Malaysia as the Regional Hub for Halal Products was specifically set up last year for this purpose. It is chaired by the Ministry of International Trade and Industry (MITI).

The figures on the global halal food market are so huge that some analysts even used the term "colossal".

According to MITI, quoting sources from the International Market Bureau Canada, the total world Muslim population is estimated to be 1.8 billion and based on the estimated expenditure per capita for food of US$0.85 (RM3.23) a day, it is estimated that the market for halal products is US$560 billion (RM2.12 trillion) a year!

In Malaysia, 60 percent of the population are Muslims and if one were to estimate the per capita expenditure for food as RM1 a day, then the demand for halal products is more than RM5 billion a year.

According to MITI, at present there are no comprehensive figures on the performance of halal food production in Malaysia but the size of the market can be seen by looking at the import and export of processed food.

In 2002, import of processed food was valued at RM5.7 billion whilst export was RM4.7 billion. According to MITI, quoting figures from the Statistics Department, between January 2003 to October 2003, the production of selected food was valued at RM9.6 billion.

From 1995 to June 2003, the Malaysian Industrial Development Authority (MIDA) has issued licences to 424 food manufacturing companies with a total investment of RM5.9 billion.

Based on the feedback from MITI, Malaysian manufacturers have been successfully exporting processed foodstuffs to 80 countries.

Three main market for livestock-based products are ASEAN (Indonesia, Singapore, Thailand), Middle East/West Asia (United Arab Emirates, Saudi Arabia, Iran and Iraq) and Europe (United Kingdom, France and Germany).

Malaysian manufacturers have to do more to claim their share of the global halal food business as their export figures are relatively small compared to the volume of the global halal food market.

According to MITI, among the problems faced by the local manufacturers is that they lack the competitive edge compared to advanced nations in terms of processing technology (1), product quality(2), Research & Development (R&D) (3), distribution network (4) and brand building (5).

In the quest for the nation to set up the halal hub, MITI has been given the task to coordinate the policy and development programme of halal products.

Among the initiatives given due attention are the standardisation of the process and procedures for halal certification, coordination of the development of the halal standard and enforcement of laws.

MITI also from time to time holds discussion with the industry on issues and problems which need to be rectified in order to realise the objectives of halal products development besides holding discussion and organising investment mission overseas.

It is a well-known fact that Malaysia depends a lot on import of raw materials.

Tan Sri Muhyiddin Yassin who took over the Agriculture Ministry has said that his priority now is to increase the country's food production.

Generally speaking, halal food is always associated with meat-based products and Malaysia does not produce enough livestock to meet the demand of the manufacturers both for domestic and overseas market.

For beef and buffalo meat, for instance, figures made available by the Ministry of Agriculture showed that from January 2003 to September 2003, Malaysia's import was valued at RM338.24 million compared to its own production of RM299.80 million for 2003.

The import countries include India, Australia, New Zealand, United States of America and People's Republic of China. For chicken and duck meat, the import for January to September 2003 was RM123.88 million compared to total production of RM3.37 billion for the whole of 2003.

President of the Federation of Malaysian Consumers Association (FOMCA), Prof Datuk Hamdan Adnan said the focus now should be increasing the nation's livestock production.

"Halal hub is basically about the meat-based industry. Right now, we are relying on imports. The government may need to revive Majuternak or set up a new agency that will be more aggressive than its predecessor to take up cattle, goats and sheep farming for example," he said.

The FOMCA President also said that efforts should be made to entice youths in the villages to stay put and embark on cattle or chicken farming.

"If we can show them that they can earn big money out of it, I am sure they will not leave for the city. We have enough lands. We have been talking about turning palm oil and rubber estates to include cattle rearing as they are less destructive. This is already a value-added business," he noted.

Group Chief Executive of Prima Agri-Products Sdn Bhd, Datuk Jamaluddin A. Kadir is of the opinion that Malaysia should concentrate on value added instead of becoming a livestock producer.

His company has been involved in processing and manufacturing of halal meat-based products since 1987.

About 70 percent of their products are for domestic market and the balance for export to countries like Brunei Darussalam, Indonesia, Singapore, Hong Kong, Saudi Arabia, European Union, Pakistan and Bangladesh.

"Malaysia is already an affluent society where the cost of living is higher. We have seen factories need to be relocated because of shortage of workers. If the government wants to create a halal hub, it is timely but the focus must be right. If you go back to basic, it will take a longer time and not competitive.

"We are talking about competitive advantage. Are we competitive enough to produce the raw materials? If we rear our own, our cost of production will be high and our products may not be competitive," said Jamaluddin.

However, in terms of chicken production, Malaysia could explore to develop an EU-approved plant like what Thailand has as this is a prerequisite for any chicken-based products to enter the European market.

He said that the government also needs to understand the requirement of the industry and to support their marketing strategies.

"In Europe, for example, when we penetrate the market, we have to do it alone, likewise Thailand is going on a country basis to export its chicken to Europe," he explained.

Whatever the argument is, the government needs to strategise. Epidemics such as the mad cow disease and the avian flu should be a good lesson, in that Malaysia, to a certain extend, needs to be self-sufficient with no compromise on farming standard in order to avoid any occurrence of such epidemics! - Bernama