Friday, September 15, 2006

FOOD INDUSTRY TO BE EXPANDED UNDER IMP3, EMPHASIS ON HALAL FOOD

The food processing industry will be expanded and diversified towards
making Malaysia a regional food production and distribution hub, with
particular emphasis on halal products, under the third Industrial Master
Plan (IMP3).

It is the government's objective to make Malaysia the global halal hub
for the production and trade in halal goods and services, said the IMP3
report released by the Ministry of International Trade and Industry
here today, said.


It is envisaged that by 2008 Malaysia will be the centre for the
production and distribution of halal products and service, the reference
on the halal standard and research and development (R&D) base for halal
matters.

The halal industry covers food, non-food products such as pharmaceuticals
and cosmetics, as well as services, including logistics, tourism and marketing.


The report said that to expand Malaysia's food processing industry, the
government would also upgrade human resource and technology, enhance R&D,
undertake the production and export of high-value added and niche products,
and adopting quality standards.


Targets have been set on investments and exports for the industry, with
total investments set at RM24.6 billion for the entire IMP3 period, or RM1.6
billion per annum.

Meanwhile, exports are targeted to grow at an average annual rate of 7.8
percent to reach RM24.2 billion by 2020, the report said.


It said that since the food industry was less vulnerable to economic changes,
with global retail sales in food products expected to grow at an annual rate
of 4.8 percent to US$6.4 trillion in 2020, Malaysia will need to take advantage
of this trend to become the regional food processing hub, especially for the
global Muslim markets.


Three main factors identified to drive the demand for food products are
changes in disposable incomes, changes in consumer demand and global trade
liberalisation.

The report said growth areas that have been identified are convenience foods,
functional foods, food ingredients and related support services. As for halal food,
global market value for trade in halal food and non-food products are estimated
at US$2.1 trillion annually.


The report said that 11 strategic thrusts have been set for the development and
promotion of Malaysia as the global halal hub.

These include enhancing awareness on Malaysia as the centre for halal products,
managing the competition, leveraging upon outward investments to gain access
to raw materials, enhancing R&D and developing halal services.

Others are utilising and leveraging Malaysian halal standard, ensuring quality
and safety, undertaking systematic development of halal parks, harmonising
certification process, enhancing coordination and strengthening institutional
capacity.

However, the report said that there are several challenges that needed to be
addressed in order for Malaysia to become a regional food production and
distribution hub, such as insufficient supply of raw material, technology
and product development, quality and safety and market access.

To overcome this, the government has set seven strategic thrusts, which
include ensuring availability of raw materials supply, expanding and
diversifying food processing activities and promoting the growth of
targeted areas.

Others are enhancing sectorial linkages and support services, intensifying
R&D, enhancing competitiveness overseas, strengthening human resource
development as well as institutional support and delivery systems.

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