Malaysia Thrusts Incentives for Halal Product Investments

Kuala Lumpur, Malaysia | May 20, 2008 by D-8 Secretariat

Malaysia aims to become a worldwide hub for food and other products prepared according to Islamic religious rules and will offer a slew of fiscal incentives to investors, the prime minister said Monday last week.

Under a growth blueprint mapping out the strategy to 2010, the government has earmarked key halal sectors for growth, namely in processed foods, cosmetics and personal care, pharmaceuticals, food ingredients, livestock and meat products, said Malaysian Prime Minister Abdullah Ahmad Badawi.

“For industry players in these promoted industries, the incentives include investment tax allowance, or exemption on statutory income from export sales,” he said in a speech launching the two-day World Halal Forum. “In addition, there will be exemption from import duty on raw materials as well as double deduction on expenses incurred in obtaining international quality standards,” he said.

State-backed halal industry parks have been set up in key states to facilitate investors, who can apply to the state-run Halal Industry Development Corp., or HDC, to benefit from the incentives, he said. A halal designation means a product complies with Islamic principles of hygiene and humane treatment of animals and other rules involving production processes.

Abdullah said worldwide halal trading in products and services was estimated to be worth $2.3 trillion and has huge growth potential. “With these steps in place, Malaysia is confident it can emerge as a major global halal hub in the future,” he said.

With energy and food prices soaring worldwide, Abdullah said Muslim countries — of which many are net food importers — should venture into the halal industry especially in agriculture and food-based sectors.

Malaysia has said it would use its edge over other Muslim nations in trading, logistics, banking and halal certification to position itself as a global center for the manufacture and export of halal products by 2010. At the forum, HDC inked an agreement to develop and promote a 9,000 hectare halal industrial park in eastern Sarawak state, touted as the largest halal hub in Malaysia.

Sarawak Chief Minister Abdul Taib Mahmud told reporters that Taiwanese and Middle East investors have proposed to invest a total 1.4 billion ringgit ($436 million) in the East Malaysian Halal Park. He didn’t give details. The park, which is among four halal parks set up nationwide, focuses on prawn, eel and marine fish farming, poultry, agriculture and processing industries, officials said.

D-8 Organisation has in many occasion urged the memberstates to underline the importance of halal food market, at least initially within D-8 itself. The halal food sector is indeed a promising sector not only for moslem majority countries, but also non-moslem majority ones such as New Zealand, USA, and Canada. D-8 Secretary General Dipo Alam reminded the wish of Malaysian Prime Minister Abdullah Badawi during the D-8 Summit in Bali, May 2006, who encourage memberstates to seek further opportunities in this bright sector.

Source: D-8/AP/Today’s Zaman

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