Malaysia’s halal logistics sector on the uptrend

KUCHING: Malaysia is expected to see its US$1.9 billion (RM6.05 billion) halal logistics sector to grow in tandem with the halal food industry.

The industry was pegged to be a lucrative business thanks to the huge number of Muslims in the world which currently stands at 1.79 billion, said Inside In­vestors country publisher Cory D’Abreo.

“In Malaysia there are approxi­mately 17.5 million Muslims, accounting for 60.4 per cent of the total population,” he stated in his report.

Thus, D’Abreo said the increase of halal food exports could fur­ther boost the logistics growth in Malaysia as there would be a need for freight-forwarding and transportation services.

D’Abreo further pointed out that it required highly sophisticated and strictly controlled logistics operations to prevent the cross-contamination of products dur­ing storage and distributions.

“Dedicated logistics infrastruc­tures and manageable halal logistics operations are crucial for any logistics service provid­ers keen to venture into the halal industry,” he added.

Logistics service providers need to equip themselves with the ability to fulfil the halal require­ments, besides maintaining the high efficiency and effectiveness of their operations to reduce the logistics costs for clients.

Going forward, Malaysia has the potential to become a global halal hub, supported by the MS2400 Halalan-Toyyiban standards that ensured all halal practices were incorporated across difference logistics functions.

Additionally, Frost & Sullivan estimated that halal logistics was worth about US$1.9 billion in the Ma­laysian halal food industry.

“There are a lot of opportunities for local logistics service pro­viders in Malaysia considering the potential of the global halal food market, valued at about US$1.2 trillion in 2010,” added D’Abreo.

“Given Malaysia’s strong halal brand recognition and halal lo­gistics standards, local logistics service providers should tap into the growth opportunities in the halal sector,” he added.

On top of that, Malaysia could also potentially become the regional halal hub in Asia con­sidering that Asian countries contribute about 64 per cent of the global halal food expenditures, valued at about US$770 billion.

Malaysia’s halal food industry alone was valued at about US$15.7 billion in 2010. It exported a total of RM3.94 billion worth of halal-processed food in 2008 to the Or­ganisation of Islamic Conference (OIC) countries.

“International Investor together with our knowledge partner, frost & Sullivan believes that local logistics service providers should create awareness with current manufacturers and re­tailers to use halal compliant lo­gistics services to penetrate into the majority Muslim community in Malaysia,” D’Abreo said.

“On the other hand, Malay­sian logistics service providers should also focus on developing and expanding the range of serv­ices offered to compete with the international logistics provid­ers,” he added.

He further suggested that Malay­sian logistics providers should put more focus on logistics tech­nologies that could increase their competitiveness advantages.

“The logistics industry is also expected to consolidate due to the fragmented nature of the sector. Major logistics service provid­ers are likely to increase their market share by mergers 

and acquisitions,” he concluded.

(Borneo Post Online / 15 July 2012)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com