BRICs And Beyond: Malaysia, Thailand Eye Growing Global Halal Market

The global halal food market is projected to grow significantly, expanding from US$698 billion in 2012 to an estimated US$830 billion by 2016, according to Malaysia’s Department of Islamic Development. As this market burgeons, both Malaysia and neighboring Thailand are intensifying their efforts to capture a share of this lucrative segment. Jens Kastner reports on how these countries are positioning themselves to meet the growing demand for halal-certified products.

Both Malaysia and Thailand are advancing their food sectors to cater to the expanding halal market, focusing on compliance with Islamic dietary laws. They are developing large, government-sponsored halal industrial parks, with Malaysia’s Selangor and Melaka states already operational and Thailand’s southern Songkhla province in development. These parks aim to streamline production and enhance the halal supply chain, while both nations are also tightening regulations surrounding halal food production.

The need for rigorous halal certification has heightened, particularly as a substantial portion of halal food is now produced by non-Muslims. This challenge is particularly pronounced in predominantly Buddhist Thailand. The recent controversy involving Cadbury chocolate bars in Malaysia, which were falsely claimed to contain pig DNA, underscores the stakes for food manufacturers. Such incidents illustrate the critical importance of maintaining strict halal standards.

Dr. Winai Dahlan, Director of the Halal Science Centre at Thailand’s Chulalongkorn University, highlighted a shift in halal certification standards. Previously, unprocessed foods like Thai canned tuna were considered naturally halal. However, new standards now require that all processed foods, including pineapple, must be verified as halal. This shift is driven by the Organisation of Islamic Cooperation’s (OIC) establishment of the Istanbul-based Standards and Metrology Institute for the Islamic Countries (SMIIC) in 2010. SMIIC aims to unify halal certification standards across the approximately 300 halal certification bodies operating in over 125 countries.

Malaysia’s International Trade and Industry Ministry reported that the country exported US$10 billion worth of halal products last year, with the food and beverage sector accounting for around 40% of these exports. Thailand’s halal food and beverage export performance matched Malaysia’s last year, placing both countries fifth in the global halal market rankings, behind Brazil, the US, India, and China. Key export markets include ASEAN members, notably Indonesia, with its large Muslim population, as well as the UAE, Saudi Arabia, Egypt, and a growing market in China.

Reflecting Malaysia’s ambition to be the global halal hub, the Third Industrial Master Plan 2006-2020 promotes the development of ‘Halal Parks’. These parks offer certified operators, industry players, and logistics providers various incentives, including government subsidies. In contrast, Thailand, which has around 3,500 halal food production facilities concentrated in its central region, plans to build a major halal industrial estate in the south. This new estate aims to enhance efficiency in supplying halal products to the ASEAN market, which is expected to expand next year.

Dr. Winai identified significant growth potential in finished products containing vegetables, fruits, and seafood, with medium-sized companies likely to benefit the most. Meanwhile, Mohd Suhaimi bin Mohd Yusof, Assistant Director of Malaysia’s Department of Islamic Development (JAKIM) Halal Hub Division, noted that processed foods and beverages dominate halal certification applications, reflecting consumer preference and market access.

While transitioning to halal certification does not generally require new machinery, manufacturers face challenges in monitoring the supply chain and ensuring strict separation from non-halal production. Dr. Winai highlighted that obtaining the Thai halal logo is a relatively quick and inexpensive process, supported by Thailand’s advanced laboratories and comprehensive supply chain databases.

Suhaimi emphasized that despite the Cadbury controversy, Malaysia’s halal certification system remains robust. The incident, exacerbated by social media, was ultimately resolved with JAKIM’s confirmation that the products were free of porcine DNA. The experience led to improved coordination among certification agencies and a strengthened public perception of Malaysian halal standards.

Overall, both Malaysia and Thailand are making substantial strides in the halal food sector, positioning themselves as key players in meeting the global demand for halal products.