MATRADE and HDC Join Forces to Boost the Halal Trade and Industry Ecosystem

Malaysia is taking a bold step to solidify its position as a global leader in the halal economy. The Malaysia External Trade Development Corporation (MATRADE) is merging with the Halal Development Corporation (HDC) to create a more cohesive, robust halal trade and industry ecosystem. This merger aims to streamline operations, leverage the strengths of both entities and enhance Malaysia’s competitiveness in the booming global halal market, which is forecasted to reach $5 trillion by 2030.

A Merger to Boost the Halal Economy

The Investment, Trade, and Industry Ministry (MITI) announced the merger, which will combine MATRADE’s export capabilities with HDC’s deep industry knowledge to create a unified approach to advancing the halal trade and industry ecosystem. According to MITI, the merger’s goal is to align resources and operational frameworks while maintaining job security and retaining HDC’s brand equity.

The strategic merger is not just about consolidating functions but about optimizing resources and enhancing productivity across the entire halal value chain. By merging MATRADE’s extensive global network of 49 trade offices with HDC’s industry-specific expertise, Malaysia aims to significantly expand its market access for halal products and services worldwide. This initiative is expected to make Malaysia a preferred destination for halal trade, business, and investment, ultimately strengthening its position as a halal industry powerhouse.

Why the Merger Matters

Malaysia has long been at the forefront of the global halal economy, recognized for its comprehensive halal standards and certification processes. The merger aims to further strengthen Malaysia’s leadership role in this sector by creating a more integrated halal trade and industry ecosystem. This move comes as Malaysia prepares to fully capitalize on its upcoming Chairmanship of ASEAN in 2025, positioning the nation to attract more investments and boost exports across Asia and beyond.

With the global halal market expected to grow exponentially, Malaysia’s proactive approach to merging these two key agencies underscores its commitment to capturing a larger share of the market. The country has a long history of promoting halal products and services, with an extensive ecosystem that includes halal food production, pharmaceuticals, logistics, cosmetics, and even halal tourism. This merger is a strategic step towards further consolidating these efforts, ensuring Malaysia remains at the cutting edge of halal market trends while catering to the diverse needs of global consumers.

Moreover, the Malaysian halal certification is often considered the “gold standard” in the halal industry, setting benchmarks many countries aspire to achieve. The merger will not only bolster this reputation but also facilitate the harmonization of halal standards with other nations, making it easier for Malaysian products to penetrate international markets.

Supporting SMEs

A vital aspect of the merger is its focus on supporting local businesses and creating job opportunities. The halal sector in Malaysia is already a significant contributor to the economy, with SMEs making up a large portion of halal-certified businesses. The merger is expected to further empower these small and medium enterprises by integrating MATRADE’s export promotion initiatives with HDC’s industry development programs. This will provide SMEs with better access to international markets, enabling them to scale their operations and compete globally.

Small businesses often face barriers when trying to expand beyond domestic markets, such as compliance with international standards, logistical challenges, and unfamiliarity with export processes. Through the merger, a more cohesive support system will be in place, offering SMEs guidance on meeting international halal standards, securing halal certification, and participating in trade exhibitions abroad. Additionally, this initiative will provide the necessary infrastructure for SMEs to innovate and develop new halal products that cater to emerging global trends, such as vegan halal foods and eco-friendly halal packaging.

The integration will not result in job cuts. Instead, all existing employees will be retained, and their roles will be optimized to align with the new strategic direction. The merger is seen as a win-win situation, promising greater efficiency and productivity without sacrificing employment. Moreover, this alignment will streamline efforts to support local entrepreneurs, ensuring they benefit from Malaysia’s growing reputation in the halal market.

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Halal Trade and Industry Ecosystem

The merger will unlock new synergies across the halal trade and industry ecosystem, leading to more efficient use of resources and improved productivity. By integrating MATRADE’s export networks and HDC’s expertise in halal industry development, Malaysia is set to optimize its entire halal value chain, from product development and certification to marketing and international trade.

For instance, HDC’s focus on halal certification and industry standards will complement MATRADE’s efforts in promoting Malaysian halal products overseas. This combined approach will not only increase market access but also enhance the credibility and visibility of Malaysia’s halal products, making them more attractive to international buyers. The export market for halal goods is rapidly expanding, driven by increasing demand from non-Muslim-majority countries, including China, Japan, and South Korea, where consumers are showing a preference for ethical and quality-assured products.

Furthermore, the merger will facilitate a more systematic development approach, ensuring all key stakeholders, including the Department of Islamic Development Malaysia (JAKIM), are involved in strengthening the halal ecosystem. JAKIM’s role in halal certification remains central to the industry’s credibility, and its collaboration with the newly merged entity will ensure Malaysia maintains its high certification standards recognized globally.

Expanding Malaysia’s Global Halal Footprint

With a network of 49 trade offices worldwide, MATRADE has been instrumental in promoting Malaysian products on the international stage. The merger with HDC will further expand Malaysia’s reach in the global halal market. Through MATRADE’s established connections, Malaysian halal products will have better access to markets in regions such as the Middle East, Europe, and North America, where demand for halal products is rapidly growing.

In recent years, the halal food sector has experienced a surge in demand due to increasing awareness about halal standards and their association with ethical and high-quality production processes. The global market for halal cosmetics and pharmaceuticals is also on the rise, with an estimated market size of $144 billion by 2028. The merger will position Malaysia to capitalize on these emerging opportunities by diversifying its halal offerings and expanding into sectors like halal logistics, finance, fashion, and tourism.

Halal tourism, in particular, is gaining traction, with destinations offering Muslim-friendly amenities, including halal-certified dining options, prayer facilities, and Sharia-compliant hotels. Malaysia, being one of the top Muslim-friendly travel destinations, stands to gain from this trend. The unified strategy resulting from the MATRADE-HDC merger will help the country strengthen its position as a premier halal travel destination by integrating tourism with other halal industries such as food, cosmetics, and finance.

ASEAN Chairmanship 2025

As Malaysia gears up to chair ASEAN in 2025, the merger is a timely step towards strengthening the nation’s halal trade and industry ecosystem. The ASEAN region is home to over 250 million Muslims, representing a significant market for halal products and services. By merging MATRADE and HDC, Malaysia is positioning itself to lead the regional halal agenda, driving collaboration with other ASEAN countries to standardize halal certification and boost intra-regional trade.

The merger will enable Malaysia to push for harmonized halal standards within ASEAN, making it easier for businesses to export their halal products across the region. This will not only benefit Malaysian companies but also help establish ASEAN as a leading global hub for halal trade. Through its Chairmanship, Malaysia will have the platform to encourage member countries to adopt unified standards, facilitate smoother cross-border trade, and attract investments in the halal industry.

In addition to trade, Malaysia’s leadership will focus on developing the infrastructure needed to support halal supply chains across the ASEAN region. This includes establishing regional halal logistics hubs, expanding halal certification capabilities, and fostering research and innovation in halal product development. By positioning itself as a leader in these efforts, Malaysia aims to lay the foundation for ASEAN’s collective growth in the global halal economy.

Engaging Key Stakeholders

MITI, MATRADE, and HDC are committed to taking a whole-of-government approach to strengthen Malaysia’s halal ecosystem. This includes engaging with key stakeholders such as the Department of Islamic Development Malaysia (JAKIM), which plays a crucial role in halal certification. Collaboration with JAKIM and other industry players will be essential for maintaining the high standards of Malaysia’s halal certification, which is recognized globally.

By involving all relevant stakeholders, Malaysia aims to create a more resilient halal trade and industry ecosystem. This approach will ensure that all aspects of the halal value chain, from certification to export promotion, are aligned and optimized for global competitiveness. Additionally, efforts will be made to educate local businesses on the latest global halal standards and market requirements, ensuring that Malaysian companies stay ahead of the curve.

Another area of focus is innovation in halal products and services. The merger will facilitate greater collaboration between academia, industry, and government to drive research in emerging fields such as halal biotechnology, halal blockchain for supply chain transparency, and Shariah-compliant fintech solutions. By embracing technology and innovation, Malaysia aims to future-proof its halal trade and industry ecosystem.

The Global Halal Market

The global halal economy is projected to be worth $5 trillion by 2030, driven by increasing demand for halal products across various sectors. Malaysia’s strategic merger of MATRADE and HDC aims to capture a larger share of this market by enhancing its export capabilities and industry expertise. The unified approach will enable Malaysia to respond more effectively to global market trends, ensuring that its halal products and services remain competitive and in demand.

Halal logistics is emerging as a critical component of the halal supply chain, with an estimated market size reaching $527 billion by 2030. Malaysia’s focus on developing a seamless halal logistics framework will position the country as a central hub for the halal supply chain, serving markets across Asia, the Middle East, and beyond. Furthermore, the merger will help Malaysia diversify its halal offerings to include sectors like Islamic finance, halal pharmaceuticals, and modest fashion, tapping into the growing demand for ethical and sustainable products.

What Lies Ahead for Malaysia’s Halal Ecosystem?

The merger between MATRADE and HDC is more than just a consolidation of two entities; it represents a strategic initiative to transform Malaysia’s halal trade and industry ecosystem into a more integrated and globally competitive force. By leveraging the strengths of both organizations, Malaysia is not only securing its position as a leader in the global halal market but also preparing for future opportunities.

As Malaysia prepares to lead ASEAN in 2025, the newly merged entity will play a critical role in setting the regional halal agenda, driving investment, and expanding market access. The merger marks the beginning of a new era for Malaysia’s halal economy, one that promises to bring more opportunities for businesses, greater international recognition, and a stronger national economy.

The MATRADE-HDC merger represents a bold step towards building a stronger halal trade and industry ecosystem that benefits not just Malaysia but the global Muslim community. The unified approach will create a more resilient and dynamic halal economy, paving the way for Malaysia to continue its leadership in the growing global halal market.