Halal Goes Global

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Chapter 6 – TRADE AND INVESTMENT SUPPORT INSTITUTIONS
TRADE AND INVESTMENT
SUPPORT INSTITUTIONS
Building institutional capacity for a national halal
industry is key to success. Trade and investment
support institutions (TISIs) need to think and act
outside their normal patterns of activity, and be more
proactive in understanding and engaging with the
halal marketplace. There are now enough examples to
provide insights and fresh ideas for TISIs to apply to
their own situations.
Given the continued expansion of the halal market, both in
size and complexity, and with the crossover potential into
the mainstream as well as into other eco-ethical markets,
there is a significant window of opportunity. TISIs can
make a valuable contribution to the growth of their national
economies by developing expertise within the halal market,
and using this to nurture SMEs, entrepreneurial startups
and even assist major corporations looking for a pivot into
the halal sector.
In general, trade and investment support institutions play a
critical role in garnering political support, facilitating exports
and supporting SMEs and startups, as well as providing
market intelligence and training. The well-known 2006 study
by the World Bank concluded that every dollar spent on
export promotion led, on average, to a US$ 40 increase in
exports.
With regard to the emerging halal sectors, TISIs have a
more sharply defined role, one that requires a high degree
of insight into the dynamics of the halal marketplace, as
well as recognizing their own countries’ strengths and
weaknesses in order to provide practical and result-oriented
assistance to the private sector.
The level of government buy-in and understanding of the
halal sector is critical. A TISI is unlikely to have success
in promoting halal trade if the government does not see
it as a viable market. While the track record over the past
decade has gone a long way to demonstrate the potential
of the halal sectors to make a significant contribution
to the national economy, policymakers must still have
some vision to recognize the potential power of the halal
ecosystem.
It is important to have employees who are not just welltrained
in the halal sector, but who also understand
the practical realities of commerce. Public sector jobs
tend to attract people who have opted not to go into
business themselves, and who consequently lack a
practical understanding of running a business and
have even less understanding of the halal sector. A welltrained
team with a good grasp of the commercial realities
of the halal ecosystem, its challenges and opportunities, is
critical for a successful TISI, and will enable them to provide
a real competitive edge for companies in the halal F&B
sector.
Trade promotion
The primary role of a TISI is to promote and facilitate
trade, and to find effective ways to expose companies to
potential buyers. Trade shows are a well-established and
proven arena for this, and halal food and beverage trade
shows have gained a recognized foothold in the emerging
halal marketplace over the past decade. While initiatives
such as providing support for companies to exhibit
together in a national pavilion are useful, much more can
be done to take advantage of the gathering of buyers and
sellers.
For example, the Malaysia External Trade Development
Corporation, (MATRADE) is a good example of a pro-active
TISI engaged in the halal sector. Over a 10-year period,
MATRADE has collaborated, and more recently taken
ownership, of the Malaysian International Halal Showcase,
(MIHAS), one of the most influential halal-only trade shows.
Part of the success of MIHAS is due to MATRADE’s policy
of flying in buyers to attend the expo under incoming buying
missions (IBMs).
The MIHAS 2014 IBM programme attracted 370 foreign
companies with 532 representatives from 41 countries.
Over a two-day period, a total of 2,942 business meetings
were conducted with the participation of 471 Malaysian
companies, which generated total sales of RM 477.2
million. Major products sourced by importers during
these business meetings were prepared food products,
beverages, palm oil products, agricultural produce,
pharmaceuticals, toiletries and cosmetics. Added to the
general sales generated by the expo of RM 655.8 million,
the overall total for MIHAS 2015 was RM1.1 billion (US$ 289
million), an impressive figure for a halal trade event. About
43% of the total sales were derived from MATRADE’s IBM
programme.