In Malaysian Business magazine back in February 06, it published the 40 richest men in Malaysia. Sad but true, the Malays, although the majority in Malaysia, is only but a handful in that list. We don't have to talk about the top 400 or the top 40,000 for that matter. The result is most probably the same. It quoted in a few editions back that the Bumiputera in this country holds a mere 18% of the economic pie of the country. 18%! That's pathetic. The noble idea of the NEP was launched way back during the tenure of Tun Razak with a target of reaching 30% Bumi equity. Well, that's old news. We havent made much progress.
What the Malays lack is vision. Take the word 'halal' for example. The initial impression you would get is food. Muslims can only consume slaughtered meat according to Islamic laws, but we fail to see the business opportunities surrounding it. The Halal food business has been dominated by Non-Muslims not just domestically but internationally because of their control of the produce. Take some country south of us for example. It is by far the largest producer of cattles and Halal meat product in the world and it's not even a Muslim country. The population of livestocks there is far greater than the population of the country itself!
Let's talk about this viable key initiative promoted by the Government recently: Halal Hub
With proper execution, we can achieve more than 30% equity. The Halal business industry constitutes 112 countries, catering for 1.8 billion Muslim population, amounting to close to USD 300b. The best thing is, Muslims are not the only one consuming Halal products.
The potential in this market is tremendous. We must use our leverage with the chairmanship of OIC to steer this. We have started through the newly created World Halal Forum. Muslims first of all must understand and study the supply chain and the production level of the business. Whether its supplying canned food to the Middle East, or halal cosmetics to the Americas, we must be able to penetrate the whole supply chain.
With the introduction of MS1500:2004 certification, Malaysia is trying to promote a standard which can be replicated by other countries as a coherent yard stick for Halal certification. The World Halal Forum will include forums and debates as to what Halal is all about.
We must also look at countries like New Zealand and Australia and try to replicate their efforts. In 2002, Australia alone exports over 100,000 tonnes of Halal beef, veal, mutton and lamb products (Halal Journal, March 2005). This amounted to A$330m and quantities are increading steadily. For New Zealand, there are approximately 49million sheeps being farmed in the country, 9.6 million cattle and 1.6 million deer. New Zealand began its venture in exporting Halal meats since 1960s. I think we are good at studying other people's models. It will boil down to exectution at the end of the day. We must succeed!
Now, the Halal hub concept doesnt just encompass the produce. Let's look at the potential in the services sector. Fast food chain businesses are growing like mushrooms everywhere. Imagine all the McDonald's in the US having a Halal logo and certified Halal operation worldwide. Ray Kroc would definitely flip at the idea! The revenue generated will be doubled, maybe tripled. Look at airlines servicing countries around the globe. No more salmon and mackerel every time you fly with other airlines than MAS or Emirates. Oil & gas Muslim people going to Houston all the time taking Continental or Southwest would be thrilled to have halal steak or roast chicken instead of the usual shrimp cocktail!
It doesnt stop there. Look at supermarkets and hypermarkets around the world. Imagine 20% of Halal canned food is sold at Walmart or Sam's Club. No confidence in rendang being sold at Mark & Spencer's in London? Think again, who would have thought Thai chilli sauce would be a big hit in the US and UK. Foreign foods will be toned down to local taste: curry is the number one take away food, so is kebab in Germany.
To be the central trading hub for Halal products, Malaysia must strategically market itself. It must promote the infrastructure and logistics support available in this country, from world class sea ports and airports, to railroads and world class Cargo support courtesy of Malaysia Airlines (ok let's talk about its debt in a different article, or blog someone else's site).
Pak Lah and the Cabinet have made the right choice in promoting Malaysia to be the next Halal hub. With the financial support being offered by numerous institutions, its time to stop bitching about the slow economy and when the RMK9 budget will be released and execute a good business model!
Signing off,
Submariner_8
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