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Covid-19: The strategic value of the halal industry

THE outbreak has exposed the populations of most countries to a dangerous virus. At the same time, perhaps more importantly, it has exposed weaknesses in supply chains of nations across the globe.The Malaysian government should be commended for establishing a taskforce to maintain critical supply chains. This is an excellent step to ensure that what is primarily a medical crisis doesn’t turn into a broader crisis.

With the movement control order (MCO) extended, the role of ensuring supply chains remain functioning will be critical on two fronts — food and medical supplies.This is where the halal industry, especially SME’s, will play an important role in feeding the nation.

Over the last two decades, the concept of halal has been progressively applied to various industries from agriculture, food manufacturing, cosmetics, pharmaceuticals and logistics.Malaysia is now the beneficiary of a forward-thinking policy to address food security gaps 20 years ago while empowering local producers with halal standards.

Halal is a universally applicable concept which calls for amongst many elements, cleanliness.In parallel, the hundreds of campaigns that governments around the world are rolling out are calling for people to fight the pandemic have several key themes including cleanliness.

The global halal market has been reported to be worth billions but when answering the critical question of how much food can be produced onshore to meet local demands, the keen lens of crisis reveals a lot. At the cutting edge of this challenge are the nations SME’s, which make up 98.5% of all registered companies. SME halal food producers are in all parts of the supply chain, plugging into larger food producers, producing ingredients and involved in the last mile distribution and delivery.

SME’s are the worker ants of the halal food equation for Malaysia. What this means is there is now an onshore capacity to produce, store and distribute food for the local population. This crisis has shown that relying too heavily on external trade alone is a risk.

In times of crisis, higher levels of food sovereignty allow leaders to focus other critical matters. It is no wonder that the government gave strong attention to SME’s in the food sector for the stimulus and economic measures to be implemented. Funds for SME digitalisation and automation and loans for SME’s in agri-food production to name just a few.Halal food producers should get the lion’s share of these funds to expand capacity. If applied properly, the stimulus measures by the government will allow a strategic shift that is crisis resistant and future proof.

The ability to innovate and adapt to modern technology will be the next challenge for SME’s in the halal economy coupled with the need to crisis resistant. As many people “Stay at Home” it is a good time to ponder the facts. Halal has been around for hundreds of years but Covid-19 has been with us only since last December. Applied thinking about halal and its benefits will assist the broader population during this crisis and well into the future.

Nordin Abdullah
Founding Chairman

Comments on this subject were also featured in the following media:

Rethinking Halal Supply Chain During COVID19 Outbreak – SME’s Strategy– News Hub Asia

Strategic SME’s in the Halal Supply Chain: Post COVID19 Planning– Malaysia Global Business Forum

Covid-19: Time to be innovative– New Straits Times

Covid-19: The strategic value of the halal industry– The Mole