Collaboration will help Vietnam access global Halal food market: Malaysian minister
Collaboration will help Vietnam access global Halal food market: Malaysian minister
Vietnamese products may gain access to nearly two billion Muslims worldwide thanks to the Halal industry collaboration between Vietnam and Malaysia, Minister of Investment, Trade, and Industry Zafrul Abdul Aziz said during a recent exclusive interview with Tuoi Tre News.
Malaysian Minister of Investment, Trade, and Industry Zafrul Abdul Aziz gestures during an exclusive interview with Tuoi Tre News on July 10, 2024. Photo: Quang Dinh / Tuoi Tre |
Aziz just wrapped up a working trip to Vietnam, where he co-chaired the fourth meeting of the Vietnam-Malaysia Joint Trade Committee.
The Malaysian minister's trip saw many positive results in promoting trade between the two countries.
What are the core results of this working trip? What notable agreements have the two countries reached?
This has been a very productive and fruitful trip. The primary reason I'm here is for the Joint Trade Committee meeting with Vietnam’s Minister of Trade and Industry. This is the committee’s fourth meeting, where we discussed many issues, particularly those relating to trade.
We also talked about Halal cooperation and explored areas of cooperation in digital and green technologies, with a focus on green transition, innovation, food & beverages (F&B), and agriculture.
I think one of the major breakthroughs is a deeper understanding of how we should expand our cooperation in the Halal industry. Our Halal Development Corporation CEO was also here. We want to assist Vietnam in strengthening its capabilities in the Halal value chain. To this end, we are preparing a memorandum of cooperation between the Halal Development Corporation of Malaysia and Vietnam.
Additionally, we asked Vietnam to establish an agency dedicated to Halal, and they agreed. This agency will be under Vietnam’s Ministry of Science and Technology.
The second breakthrough is that we agreed on a trade target of US$18 billion by 2025.
You have mentioned that you have several agreements about Halal cooperation during this trip. Can you elaborate on the potential of this industry to drive economic growth between our two nations?
Halal provides significant access to markets. To give you an idea, I think by the year 2030, the global Halal market will be valued at around $5 trillion.
It's important to understand that Halal is for everyone. So you’re killing two birds with one stone. When you sell Halal, you target the Muslim market, but people who are not Muslim can also buy it. So you have both markets instead of just the non-Muslim market.
Vietnam is already a major exporter of agricultural products. We know how big of an exporter you are in coffee, for example. Malaysia also imports rice from you [Vietnam].
I believe there are also other food items that, if they receive Halal certification, can enter the Malaysian market more aggressively. Without that certification, you cannot export to Muslim markets. Even if you do export, there is no demand because people want to see the Halal certification.
Therefore, we talked a lot about Halal, especially Halal certification. The Malaysian Halal certificate is given by the government, not by independent bodies. Hence, it is the most highly sought after. With it, Vietnamese companies can export not only to Malaysia, but also to the rest of the world. So I think that's why the discussion is not just about bilateral trade. I think Vietnamese companies want to access all markets.
Vietnam’s Halal industry is very new. Before this trip, we had to work with various independent parties. We said it's easier to work with one party supported by the government. So the Vietnamese government has formed that agency. From there, we're going to formalize our work.
As you mentioned before, the target for bilateral trade is set at $18 billion by 2025 and $25 billion by 2030. Which specific sectors or industries do you believe will be most promising for us to achieve these figures?
If you look at the sectors where we are both strong today, the top export and import category is the electrical and electronics (E&E) sector. As you know, both Malaysia and Vietnam are strong in this area. So in terms of trade between our countries, number one is E&E.
Number two is chemicals and petrochemicals, which are also quite significant between the two countries. And number three, we're looking at areas like agriculture, which we can improve. That's why I think these sectors will be key to increasing bilateral trade.
What is the current perception among Malaysian businesses regarding the investment environment in Vietnam?
I had the opportunity to meet with Vietnamese Prime Minister Pham Minh Chinh, and we discussed many issues, especially investment. Malaysian companies have been investing in Vietnam for several years. In fact, total Malaysian investments in Vietnam are worth at least $13 billion today. We have many Malaysian companies involved in various sectors in Vietnam.
In Hanoi, we had a networking dinner with Malaysian investors in Vietnam. Today in Ho Chi Minh City, I had a roundtable discussion with Vietnamese companies that have trade relations with Malaysia.
Malaysian investors are very optimistic about Vietnam’s growth prospects. Considering the Vietnamese economy and demographics, you can see growth of at least five percent this year with a very young population. Hence, there are a lot of opportunities.
Malaysian companies have already heavily invested in property, banking, and manufacturing. There is one sector that we feel Malaysia can also contribute to, which we discussed at the government-to-government level, and that is the renewable energy sector. We have companies like Petronas who are very interested in investing in wind energy in Vietnam, not only for domestic use but also for export to other countries within ASEAN.
Vietnam and Malaysia also want to boost collaboration on digital transformation, the digital economy, and e-commerce. What can be done to further cooperation?
Digital transformation is important. As we grow as a region and as individual countries, we want the growth to be strong, inclusive, equitable, and resilient. One of the ways to do this is empower our companies, including small- and medium-sized enterprises (SMEs).
Smaller SMEs can only be successful if they have scale, and one way to achieve that scale is to participate in digital trade, as it allows companies to be more inclusive. So we need to encourage more products to be sold on various platforms, making it easier for people to buy.
However, buying and selling online between ASEAN countries are not easy today, because the policies and payment systems are very different. We need some uniformity and standardization in this area.
Malaysia aims to conclude negotiations on the Digital Economic Framework when we chair ASEAN next year. This process was first officially announced when Indonesia held the chairmanship in 2023.
What we want is an ASEAN framework that makes payments easier so you can buy or sell any goods on any platform. It will be good to conclude this as soon as possible so that all companies, no matter how small or big, Malaysian, Vietnamese, Indonesian, or Singaporean, can participate.
Thank you for your time!
Halal Industry: Not just F&B
Halal, an Arabic word meaning 'permissible,' refers to products that comply with Islamic regulations.
While often associated with food, the Halal industry encompasses a much wider range of products and services.
One of the most basic requirements in Halal standards is the absence of pork or alcohol in the ingredients.
However, the Halal industry extends beyond food to include pharmaceuticals, cosmetics, and even tourism and financial services.
With approximately 1.9 billion Muslims worldwide, representing about a quarter of the global population, the potential of the Halal industry is immense and the demand for Halal products is growing rapidly.
