Penang International Halal Hub: Positioned As Asia’s Best

By Casey Loo

The Penang International Halal Hub (PIHH) is setting itself up to be Asia’s top business hub for all things Halal, by adopting a holistic approach that markets the industrial park as a service-oriented concept.

The state of Penang in Malaysia initiates the development of Penang International Halal Hub (PIHH) to serve the growing global consumer demands for Halal products, services and solutions. As the second smallest state in Malaysia, this is a natural progression as it rides on the strength of more than 35 years of manufacturing excellence.

The Penang State Government gives priority support to this project. It established an agency named PIHH Development Sdn Bhd, also known as Halal Penang, to spearhead the coordination, facilitation, promotion and development of the Halal industries in Penang. Halal Penang works in tandem with the State’s investment promotion agency, investPenang; Penang Development Corp (PDC); State Religious Department (JAIPP); as well as the federal authorities such as Halal Industry Development Corp (HDC); and and the Malaysian Halal certification authority, JAKIM.

The PIHH Task Force and PIHH Steering Committees for the Halal Clusters were set up to mould the policies and direction for PIHH. The committees consisted of tri-partite arrangement consisting of leaders of the industries, academics and government. Their objective is to position PIHH as a link between investors,suppliers and the global market.

Nine clusters of the Halal hub are highlighted for special promotion and development. They are:

1. Halal Manufacturing Industries
The Penang State has dedicated 130 acres of prime land for the development of the Halal Integrated Park within the vicinity of the high-tech Penang Science Park. The Halal Park is conceptualised to provide an incubation system, shared facilities, test labs, warehousing and cold chain services, as well as networking infrastructure. These can provide enhanced traceability and link to the global market.

Close proximity to the seaport and airport, as well as easily available local local and regional suppliers will ensure that investors can effectively operate in a short turnaround time.

2. Halal Logistics
PIHH provides value-added services for the industries’ supply chain needs through its international seaport and airport. Halal warehouse and cold chain facilities will be provided through the upgrading of the Penang Port as the dedicated Halal port. Investors can take advantage of the extensive ground infrastructure connecting the importers and exporters of the northern region of Malaysia as well as the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) areas.

3. Halal Agro-Based Industries
PIHH aims to be the central point in the sourcing of high-quality Halal agri- and agro-based ingredients and raw materials through its linkage with all Halal parks in the Malaysia and the IMT-GT region. An integrated cattle rearing, abattoir and meat processing project is in the pipeline to produce high quality Halal meat under the flagship of Juru Beef.

The Juru argricultural area has been earmarked for this project. The existing primary production will be advanced further to cater to the downstream production particularly for cosmetics and personal care products, as well as pharmaceutical and medical devices sectors.

4. Halal Life Sciences
The emphasis is on a holistic approach and advancement in biotechnology, wellness and medical products and services for the benefit of the Muslim consumer in particular, and global consumer in general.

5. Halal R&D
PIHH provides the catalyst to the R&D advancement by providing a virtual link to connect investors to some of the advanced Halal R&D centres in the region i.e. University Science Malaysia; Halal Products Research Institute, Universiti Pertanian Malaysia; Halal Science Center, Chulalongkorn University and Halal Food Science Centre, Prince of Songkla University.

More university-industry linkage with Halal research centres around the world will be forged for investors to leverage on for product and process innovation and improvement.
6. Islamic-Based Financial Services
Islamic banking, insurance and financial services are available within the PIHH with the presence of international financial institutions and offshore banking facilities. PIHH works closely with leading financiers in Malaysia and Middle East to make the Islamic funding and financing accessible for Halal investors.

7. Halal Tourism and Hospitality
Georgetown City of Penang, a UNESCO World Heritage City, is a veritable melting pot of cultures, customs, food and heritage buildings. To ensure that leisure oriented Muslim tourist can fully enjoy the sights, scenes and shopping in Penang State, PIHH offers Halal and family-concept values towards satisfying the need for Halal food and hospitality services. Niche Halal-concept hotel chain and eateries will be in the limelight in the near future.

8. Halal K-Workers
The State is collaborating with various training providers and academies such as Penang Skills Development Centre (PSDC), to develop modules and skill sets in Halal management system for processes, quality assurance, auditing and certification.

The goal is to develop a sustainable pool of knowledge workers and professionals for the Halal industries.

9. Marketing and Promotion
Through PIHH, investors and businesses alike can leverage on Penang as the gateway to global Halal markets via partnership and market linkages established around the world.

YB Haji Abdul Malik Kassim, Penang Malaysia’s State Minister for Religious Affairs, Domestic Trade and Consumer Affairs, is Chairman for the PIHH Task Force and Deputy Chairman of Halal Penang. We spoke to him at Anuga 2009 in Cologne for an insight into this project of State priority. Here is an excerpt of the interview:

Why is this the right time to launch the PIHH?
By the time I took up the position, it was already the third quarter of 2008, and the global economy is going on a downward trend. And at that time, we believed that the worst hit was our electronics industry and Penang is very much relying on this sector. So this was our opportunity to diversify into something, which is very up and coming – an integrated Halal hub.

What does the PIHH Taskforce do?
One of its main tasks is to develop the nine cluster initiatives under this taskforce. Various industrial leaders head these nine initiatives, to steer and move ahead in these areas of our concern.

What are its achievements so far?
We have gone far ahead and our biggest milestone was signing six MOU (Memorandums of Understanding) at the World Halal Forum and three at MIHAS this year.

I believe that one of our biggest breakthroughs is convincing the Penang Port, to work towards being Shariah compliant according to the Islamic requirements for Halal

On the local front, our industrial park has since taken off. Our first Halal industrial park was built in Bukit Minyak – an industrial area in the south of Penang mainland. We hope to position it as the first Halal Gelatin factory in Southeast Asia. And with that, we hope to start off an incubator for Halal industries, for the small and medium scale industries, to bring them up to the next level of being export-capable for the international, global market.

How do you position PIHH?
I envisage the Penang Port to be the 2nd best Halal port in the world, just after Rotterdam. The port was awarded the MS1900 in May 2009. This accreditation from SIRIM certifies that the port’s operations comply with the Shariah law for Halal. With that, we are able to brand Penang Port as a Halal port.

Penang Port is the first port in Malaysia to achieve the MS1900:2005 “Quality Management Systems - Requirements from lslamic Perspectives” for the provision of container handling services and dedicated warehouse services within Penang Port.

Our visit to Rotterdam in the next few days is to finalise the twinning of the two Halal ports. Rotterdam to be our partner port and if this materialises, we are going to spearhead the marketing of this concept around the world.

What special services does PIHH offer, that are different from other Halal industrial parks in the country?
At PIHH, we are not just selling an industrial park but a holistic approach. Therefore, we have to develop all the related industries in Penang.. We want to help, develop and strengthen them. F&B is definitely one sector we want to develop first because as far as Halal is concerned, F&B is where we can start first.

For this sector, we can offer a fully traceable Halal supply chain. I don’t think other industrial parks in the country can offer the same.

The PIIH, besides other things, has an organisation that specialises in developing market linkages to facilitate trading facilities. Investors can come to us for contact details of different kinds of companies from all over the world.

Other industrial parks support services such as water, security, and cleanliness but what else? These are for the industrial parks but we provide all these and we have logistics and IT companies to make Penang Port a truly Halal port with complete supply chain traceability.

Is the PIHH being marketed overseas as well?
We have gone to Aceh in Indonesia and South Thailand because those areas are supply based. Southern Thailand is known for its poultry supply. Also, we want to be the first to develop Aceh and offer our port services. Secondly, we want to be there to provide marketing networks.

When we were in Henan, China, our strategy was to invite companies there to come in as trading companies first. Many of them are not yet able to set up a plant at PIHH yet. But they can import their own product, then rebrand and repack it for export into the Middle East and the Islamic countries.

And also recently I visited Japan, which is very strong in food additives and food derivatives. Their products are very popular worldwide. But most, if not all of them, are non-Halal. This is because there isn’t any Halal certification there, or they have problems in the certification process. So we are inviting them to not only come into the PIHH, but also for us to go over to Japan to provide Halal certification, so that they can export them through the PIHH.

What role does the PIHH play in developing the Halal industry for the world?
At PIHH we encourage all F&B manufacturers to be certified Halal. For example, if you look at exhibitors at Anuga, some 50 to 70 percent of them have products that are actually Halal; it is just that they are not certified.

When you are certified Halal, you are actually enhancing your market strength in the Halal sector. At the same time, we want to bring their products up to a level that non-Muslims will also be attracted because of the food and packaging quality associated with the Halal Logo.

We also hope to see more Halal ports spring up around the world because they can enhance the traceability of Halal products. We are promoting this by organising events for the industry. Come January 2010, we’ll be having our first Penang International Halal Expo & Convention (PIHEC) on January 29 - 31, 2010.

Is this going to be an annual fair that you organise in Penang for an international audience?
Yes. This is going to be an annual affair and we want it to be of an international standard.

Where will this fair be held?
For a start, it will be held at the Penang International Sports Arena. We hope that the new convention centre will be up by 2011. Currently it is still under construction. By December this year, we should see phase one, which is the physical part of the process, completed.

Are foreign companies going to be invited to exhibit?
A few companies have indicated interest in our project. China’s Henan province, Singapore, and Turkey are showing strong interests. I believe that from our network, we can draw quite a number of international participations. Our relationship with Koelnmesse has been built over the last three or four months. We worked with them in a Halal Forum in Phuket and we are also involved in the World of Halal project in Thaifex-World of Food Asia 2009.

Do you think the PIHEC would be viewed as a competitor by other Halal events?
I want to emphasise that all our initiatives compliment each other. We don't want to compete with anybody. We can compliment and collaborate. This is why we collaborate with Thaifex-World of Food Asia. We want to work closely with MATRADE, which organises the MIHAS, and KasehDia, which organises the World Halal Forum. I don't believe in competing because in that, somebody has to lose. I prefer to be in a win-win situation.

Is there enough demand in the industry for all these events, which are concentrated in the first half of the year? Most companies may not have sufficient resources to exhibit and participate in every exhibition.
I believe that there are enough companies around. If you look at MIHAS, I think we have what about 15 to 20 companies from Penang exhibiting there. If these companies can also participate in Penang, that’s good. But if they cannot, or choose not to, I’m sure there will be 30 others who are interested. There are 257 Halal-certified food companies in Penang alone. If we can facilitate them and give them more support, I believe that we can get another 30 exhibitors to take part in the PIHEC.

We also want to work with Thaifex-World of Food Asia. We have not finalised our cooperation model yet, but I am convinced we can design some scheme or package which will enable us to carve a win-win situation between the participants, organisers and events managers.