Malaysian Market Synopsis

The Malaysian market has been arguably an unsung hero in terms of economic growth in the ASEAN region. With a burgeoning middle class, rising per capita income, and scoring high on quality of life factors like education, safety, and social welfare, Malaysia is an important growing economy to be considered. With a population of just 33 million, Malaysia is the 3rd largest economy in Southeast Asia.

With over 60% of the population adhering to halal consumption guidelines, Malaysia has evolved into a flagship halal economy. Many global initiatives and innovations in the halal economy have risen from Malaysia. Specifically, the halal division of the Department of Islamic Development Malaysia (JAKIM) is a global authority in standard development, halal awareness, and institutional adoption. JAKIM is federally authorized to govern all domestic halal affairs in Malaysia.

AHF has been recognized and accredited by JAKIM, and thus its certification enables companies to export to Malaysia successfully.

While the US exports only $12 billion in goods and services to Malaysia, AHF believes there is significant room for growth.

Disclaimer: This document is for informational purposes only. This document is not an official legal document, standard, or regulation. Please consult your legal counsel for compliance with any specific laws and regulations beyond the domain of halal certification.

Market Opportunities

Halal Certified Beef

Malaysia relies on imports to satisfy local beef consumption importing over 75% of its consumption. The major exporters of beef and veal are India and Australia. India exports buffalo meat catering to the lower end of the market, where Australian beef caters to the middle to the high end of the market with various grades of cattle.

A significant factor in the successful export of beef to Malaysia is the approval required from the Department Of Veterinary Services Malaysia (DVS). Obtaining this approval requires an inspection from Malaysian authorities and can be resource-intensive to secure. However, once received, it can be a moat for a beef producer in terms of market access. AHF can work with your company to facilitate market access.

Halal Certified Food Ingredients for Further Processed Goods

The Malaysian food processing industry constitutes over 10% of all manufacturing. While Malaysia is rich in many agricultural goods, it still relies on external suppliers for many ingredients, such as dried nuts, whey protein, and bakery additives. This segment is an under-tapped opportunity for US-based companies to market their natural and functional ingredients to manufacturers in Malaysia.

Foodservice

With rapid urbanization, increasing labor participation from women and men, and the proliferation of options, dining out has become a fixture of Malaysian consumer behavior. Interestingly, US brands such as KFC, Burger King, and Mcdonald’s are remarkably popular. While the opportunity has largely played out in terms of franchises, US companies still have considerable opportunities to serve this market segment at the top of the supply chain and capitalize on this trend.

Halal Certified Pharmaceuticals and Medical Devices

Healthcare is a high-growth market with room for additional expansion through entering the pharmaceutical segment. The CAGR for medical device exports from the US between 2016 and 2018 was 29% (source: https://www.export.gov/). Healthcare in Malaysia is a single-payer system; consequently, the government spends nearly 10% of its annual budget on healthcare. As a consequence, Malaysians generally have access to good healthcare.

AHF believes there is room for pharmaceutical products and, to some extent, nutraceutical products to enter the Malaysian market that will improve patient outcomes. Specifically pharmaceuticals that are not currently manufactured in the ASEAN region. Halal certification of these pharmaceuticals will build consumer confidence in terms of adoption.

How to export to Malaysia?

To successfully export food and beverage products to Malaysia requires understanding the import regulations, standards, and local market dynamics. Generally, this requires halal certification from a JAKIM foreign recognized halal certification body like AHF and approval from the relevant authority in your industry. For example, if you are exporting Pharmaceutical products, you would need secure approval from the Department of Health. The plant would need approval from the Department of Veterinary Services if you were exporting beef. For some products, such as food ingredients, separate approval is not necessarily required beyond general customs clearance.

Halal Certification for Export to Malaysia (JAKIM)

Compliance with halal is the number one influencing factor on consumer purchase decisions in Malaysia for Muslim consumers.

Thus, halal certification is essential to successfully market your consumable products in Malaysia.

Only halal certificates issued by organizations, such as AHF that JAKIM formally accredits, are recognized in Malaysia. The prevailing halal standard in Malaysia is MS 1500:2019 “Halal Food – Production, Halal Food – Production, Preparation, Handling and Preparation, Handling and · Storage – General Guidelines Storage – General Guidelines.” The standard outlines the fundamental principles of halal and is generally congruent with the international halal standards. There are additional standards for specific industries such as pharmaceuticals, logistics, and food service.

There are three major steps for halal certification for export to Malaysia:

1.Application

The application reviews the facility and its products for compliance with Malaysian halal standards. The products’ raw materials are evaluated individually for compliance by a qualified technical reviewer. A risk assessment is conducted on several criteria to determine a halal assurance program.

2.Audit

AHF audit team will schedule an audit date to inspect the facility, its products, and production processes for compliance with Malaysian halal standards. Upon completion, if any non-conformances are identified, a report will be generated by the lead auditor along with a time frame for corrective action. Upon completion of the corrective action, there may be a secondary audit to confirm the implementation of the corrective action. After all, non-conformances have been eliminated, and all risk mitigation measures have been implemented, the certification board is notified.

3.Certification

Upon successful completion of the audit, a Halal Production Facility Registration is completed along with the issuance of a Halal Product Certificate. A certification specialist will review and advise on the usage of the halal logo in accordance with Malaysian import regulations.

You can apply here for halal certification for export to Malaysia and beyond.