Ladang Lekir and Leiner Gelatine Enter JV Deal

In a major step forward for Malaysia’s halal industry, Ladang Lekir Sdn Bhd, a subsidiary of the Perak State Agricultural Development Corporation (Perak SADC), has entered into a joint venture (JV) with Leiner Gelatine Sdn Bhd. This partnership, officially announced at the Malaysia International Halal Showcase (MIHAS) 2024, is expected to significantly accelerate the production and market share of halal gelatin both locally and internationally. By collaborating with Leiner Gelatine, Ladang Lekir aims to establish Malaysia, particularly the state of Perak, as a key player in the global halal gelatin industry.

The demand for halal-certified gelatin has been steadily increasing, driven by its broad application across multiple industries. From food production to pharmaceuticals and cosmetics, gelatin plays a critical role, and ensuring that these products meet halal standards has become an essential concern for Muslim consumers worldwide. The Ladang Lekir JV seeks to meet this demand while simultaneously enhancing Malaysia’s standing in the international halal market.

Ladang Lekir JV: Establishing Perak as a Halal Gelatin Hub

During the signing ceremony, Ladang Lekir was represented by its chairman, Ahmad Yani Aminuddin, while Leiner Gelatine was represented by its managing director, Khawaja Ahmed Hassan. The agreement was formalized at MIHAS 2024, a leading event in the halal industry, which was launched by Prime Minister Datuk Seri Anwar Ibrahim. The ceremony also saw the presence of other notable dignitaries, including Deputy Prime Minister Datuk Seri Dr. Ahmad Zahid Hamidi and Perak Menteri Besar Datuk Seri Saarani Mohamad, who endorsed the partnership. Perak SADC chief executive officer Datuk Yahanis Yahya was also present to witness the event.

Perak Menteri Besar Datuk Seri Saarani Mohamad highlighted the global significance of gelatin, noting that the market was valued at RM15.91 billion in 2023, with an annual growth rate of 6.6% expected until 2028. However, halal gelatin currently makes up only 7% of this vast market, demonstrating the significant opportunity for expansion. The Ladang Lekir JV is a strategic initiative aimed at capturing this untapped potential, positioning Perak as a hub for halal gelatin production and innovation.

By focusing on halal-certified gelatin, Ladang Lekir and Leiner Gelatine aim to close the gap in the global market, meeting the growing demand for products that comply with Islamic dietary laws. Malaysia’s strong commitment to halal standards, along with the expertise brought by Leiner Gelatine, provides the JV with a solid foundation to thrive both locally and globally.

Halal Gelatin: A Diversifying Industry

Gelatin, a versatile ingredient derived from animal collagen, has widespread uses in various industries. In the food sector, gelatin serves as a stabilizing agent in meat products, a thickening agent in sauces, a frothing agent in dairy, and a softening agent in baked goods and ice cream. It also plays an integral role in the production of pharmaceuticals, cosmetics, and even photography materials.

With halal certification becoming increasingly important for Muslim consumers worldwide, the demand for halal gelatin has surged. In Malaysia, the demand for halal gelatin has grown considerably, with imports reaching 2,800 metric tonnes annually, valued at RM130 million. Notably, around 30.8% of these imports, worth approximately RM40 million, come from Pakistan, which is one of the major suppliers of halal gelatin to the country.

The goal of the Ladang Lekir JV is not only to boost domestic production but also to reduce reliance on imports by developing local halal gelatin manufacturing capabilities. This move will help Malaysia meet its domestic needs while tapping into the international market, particularly in regions with large Muslim populations. With its robust halal certification system and a growing demand for halal products worldwide, Malaysia is well-positioned to become a key player in the global halal gelatin market.

MIHAS 2024: A Premier Platform

The announcement of the Ladang Lekir JV was made during MIHAS 2024, a premier event organized by the Malaysia External Trade Development Corporation (MATRADE) in association with the Halal Development Corporation and the Malaysian Department of Islamic Development. MIHAS, hosted by Malaysia’s Ministry of Investment, Trade, and Industry, serves as a global platform for businesses to showcase the latest halal innovations and products. The event attracts participants from a wide range of sectors, including food, pharmaceuticals, medical devices, finance, personal care, and cosmetics, among others.

Themed ‘Globalizing Halal Innovations,’ MIHAS 2024 brings together over 14 clusters representing the entire halal industry. Companies from across the world come to MIHAS to display their most innovative halal products, services, and technologies. These sectors include halal pharmaceuticals, medical devices, finance, modest fashion, personal care and cosmetics, green technologies, and Muslim-friendly tourism. The event offers businesses a unique opportunity to network, explore potential partnerships, and expand their reach in the global market.

Additionally, MIHAS 2024 will make its international debut with MIHAS@Dubai from November 18-20, 2024, at the Dubai World Trade Centre. This expansion into the Middle East provides Malaysian companies, including those involved in the halal gelatin industry, with a gateway to one of the largest halal markets in the world. Held in conjunction with the Middle East Organic and Natural Product Expo 2024, MIHAS@Dubai will offer an invaluable opportunity for Ladang Lekir JV and other Malaysian businesses to strengthen their international presence.

Future Prospects for Malaysia’s Halal Gelatin Industry

The formation of the Ladang Lekir JV is a significant milestone in Malaysia’s quest to become a global leader in the halal economy. By focusing on the production of halal gelatin, Malaysia is addressing a critical need in the global market while positioning itself as a key player in the industry. With the demand for halal-certified products rising rapidly, the JV is poised to capitalize on this trend and enhance Malaysia’s standing in the global halal market.

As halal gelatin constitutes only a small percentage of the overall gelatin market, there is immense growth potential. Consumers worldwide are becoming more conscious of the halal certification of the products they purchase, and gelatin is no exception. This is especially true in countries with large Muslim populations, such as Indonesia, and Pakistan, and regions in the Middle East, where halal compliance is a priority.

Moreover, as more industries begin to adopt halal-certified ingredients, the demand for halal gelatin is expected to increase in sectors such as pharmaceuticals, cosmetics, and even biotechnology. With its strategic location and strong halal certification framework, Malaysia is uniquely positioned to meet this growing demand. The Ladang Lekir JV is expected to play a pivotal role in fulfilling this market need while contributing to the growth of Malaysia’s halal economy.

Challenges and Opportunities Ahead

While the Ladang Lekir JV presents a significant opportunity for Malaysia’s halal gelatin industry, there are also challenges to be addressed. Ensuring a steady supply of raw materials for gelatin production is critical, especially when it comes to sourcing halal-certified collagen from animals. This requires strict adherence to halal guidelines throughout the supply chain, from slaughtering to processing and certification.

Additionally, the halal gelatin market is highly competitive, with players from around the world vying for a share of the growing market. To succeed, the Ladang Lekir JV will need to focus on innovation, quality control, and maintaining competitive pricing. Building strong relationships with both local and international partners will also be crucial for expanding the JV’s market reach.

Despite these challenges, the prospects for Malaysia’s halal gelatin industry remain bright. With the global gelatin market expected to grow significantly in the coming years, Malaysia’s strategic focus on halal certification, coupled with the expertise of companies like Leiner Gelatine, provides a strong foundation for success. The Ladang Lekir JV is just the beginning of what could become a thriving halal gelatin industry in Malaysia, contributing to the country’s overall growth in the global halal economy.

As the halal market continues to expand, strategic collaborations like the Ladang Lekir JV will play an increasingly important role in shaping the future of the industry. By focusing on quality, innovation, and halal compliance, Malaysia is poised to become a leader in the global halal gelatin market, offering consumers around the world a reliable source of halal-certified products.