Malaysia as an international halal food hub: analysis of its competitiveness and potential for meat-based industries

Othman, P. and Sungkar, I. (2009) Malaysia as an international halal food hub: analysis of its competitiveness and potential for meat-based industries. In: International Conference on Malaysia: Malaysia in Global Perspective, 27-28 September 2009, Cairo University, Egypt.

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As outlined in the Third National Agricultural Policy (NAP3), 1998-2010, there is a need to enhance the competitiveness and to increase value-added to the whole supply chain as well as to position Malaysia as an International Halal Food Hub. Its effectiveness as the Halal Food Hub is based on the expectation and beliefs that: (i) Malaysia is recognized as a truly Islamic country; (ii) Malaysia has the raw materials and supporting infrastructure as well as the processing technologies to produce and market the Halal food products; (iii) Halal certification issued by the Department of Islamic Development Malaysia (JAKIM) is recognized world-wide due to its stringent criteria employed and also much sought after by other countries; and (iv) There is a strong commitment from the Government. This seems to be a noble idea but its implementation as a national policy, however, has to be critically assessed and evaluated as it has far-reaching implications for the economy. A study was conducted to assess the market potentials for Malaysian differentiated meat and meat-based products in several markets, viz., Malaysia, Saudi Arabia, United Arab Emirates (UAE) and Europe. The results showed very interesting results, especially in terms of the differences in consumers’ perspectives and demand patterns towards Halal food products across nations, and government policies towards Halal products. As the study showed, the major obstacle to Malaysia in achieving the International Halal Food Hub status has been the continuous and extremely low level of self sufficiency in the domestic production of meat, although facing surplus in the domestic production of poultry, but with a relatively higher cost of production compared to the other ASEAN member countries, such as Thailand. Hence, it would obviously not be cost-effective and competitive for Malaysia to realize the prospects of the Halal food hub by relying on the high-cost domestic products of meat as the raw materials for further processing to the high-end and high value-added Halal meat and meat-based products. Based on the present cost structure, Malaysia would not be able to ensure its competitive edge in the meat and meat-based industries. Nevertheless, Malaysia could still enjoy its competitiveness in this industry by undertaking several strategies such as (i) Outsourcing of raw materials from the most competitive foreign suppliers such as Brazil, Thailand, Australia and New Zealand; (ii) Establishing strategic network alliance such as contract farming activities in other countries with relatively lower production cost/higher competitiveness, and; (iii) Establishing effective cooperation with the other ASEAN countries, especially Thailand, Vietnam or Indonesia within the whole supply chain as fulfilling part of the ASEAN’s economic, social and political agenda, most notably the ASEAN Free Trade Area (AFTA).

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Keywords: Halal, Halal Food Hub, meat-based, and supply-chain.
Subjects: G Geography. Anthropology. Recreation
Depositing User: Mr. Mohd Samsul Ismail
Date Deposited: 10 Jul 2014 01:19
Last Modified: 10 Jul 2014 01:19

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