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Nestle Malaysia: Pioneer in

Halal Food Manufacturing

Nestle Malaysia is
I f there is one role model of a multi-national company that is fully
committed to producing halal compliant products, that company
is Nestle. From its first initiative into the halal food manufacturing
business in Malaysia 30 years ago, the Swiss-based
company has not only made inroads in the country
the biggest manufacturer through Nestle Malaysia but has also expanded the
of halal food within the production and distribution of its halal products all
over the world.
Nestle Group worldwide.
The company’s seriousness in complying with
Today it exports more halal requirements and standards is reflected in
than RM800 million the formation of its own Nestle Halal Committee
Regulatory Affairs. The Committee Chairman,
worth of halal food and Othman Md Yusoff, says that Nestle’s foray into
drinks from Malaysia halal food manufacturing was not because it foresaw the lucrative potential of
the halal industry today, but it was done strictly out of the company’s social
to over 40 countries. responsibility awareness to fulfil the needs of Muslim consumers.
The company is now The halal industry is one of the fastest growing markets in the world. The
recognised as a leader market for halal food alone is estimated to be worth USD500 billion. With
over 1.9 billion Muslims worldwide and increasing awareness on halal matters
and trusted manufacturer driving up demand, it is easy to see why many companies today are eager to
of halal food in take their slice of the halal pie. For Nestle Malaysia however, the venture
into halal food manufacturing since the 1970s stemmed from its social
the world. responsibility first and foremost, and the business potential and rewards
came later.

Othman says Nestle makes it a point to conduct studies of the

requirements of each country it does business in. The strict
requirements for halal food for Malaysia led Nestle Malaysia to form
its internal halal committee in the 1980s to safeguard the integrity of

“Halal alone won’t take you far.” He points out that
food must also be “thoyyiban”, which encompasses
quality. In other words, food must be nutritious
and hygienic, and manufacturers must
ethically deliver what a consumer Othman Md Yusoff
wants. Chairman, Nestle Halal
Committee Regulatory

halal products and handle

halal affairs for Nestle. The
committee comprises of 16 members
made up of Muslim senior executives to budget
drawn from various departments and for losses. In
is also responsible for training workers this respect,
on complying with halal standards and Nestle helps Reaping the Benefits
auditing Nestle factories worldwide. participating Nestle Malaysia is the biggest
companies manufacturer of halal food within the
Nestle can be considered a pioneer understand its internal halal guidelines Nestle Group worldwide. Today it exports
multi-national company in the halal food and the Malaysian Standards pertaining more than RM800 million worth of halal
industry. It established its own halal to halal requirements i.e. MS 1500: food and drinks from Malaysia to over
policy two years before the Department of 2004. Recently, Nestle collaborated 40 countries. Othman says since Nestle
Islamic Development Malaysia ( Jabatan with the Small and Medium Industries Malaysia began production of halal foods,
Kemajuan Islam Malaysia, or JAKIM) Development Corporation (SMIDEC) it has seen an increase of 15% to 23%
required halal certification in 1994. In and the Halal Development Corporation in exports over the past four years. The
1997, Nestle Malaysia worked closely (HDC) to further enhance the benefits are not just financial. Othman
with Pusat Islam and other Islamic bodies programme. says there are intangible rewards too from
and experts to develop a set of internal
Nestle’s halal production – the company
guidelines called “Guideline for inter- Nestle has also gained from its is now recognised as a leader and trusted
company supply of halal mentoring programme in the way that manufacturer of halal food in the world.
food” which served as many participating SMEs have become Drawing from Nestle’s experience,
a reference for Nestle Nestle’s suppliers through the guidance Othman specifies three requirements for
divisions worldwide they received on how to improve their a company to fulfil before it can take off in
on the aspects of halal product quality and comply with halal the halal market. First of all, he says, one
food production. standards. The programme continues to has to learn and understand all the aspects
create a wave of new SMEs that have the of halal and know what they are getting
These advances potential to become future partners. The
in halal food into. Next, everyone in the company
programme has also done much to help must be committed and fully implement
development lead to spread knowledge amongst SMEs on halal
Nestle Malaysia being halal requirements – there should be
matters. no compromise in ensuring halal food.
chosen as Nestle’s centre of
excellence for Halal. Today, there are 75 Finally, Othman stresses that one must be
“Many Muslim restaurant owners don’t
Nestle factories worldwide (including six sincere in implementing halal standards.
bother with halal certification because
in Malaysia) that are certified halal. He says most companies are venturing into
they assume that by being Muslims, the
the halal market with the sole purpose of
food they serve is automatically halal,”
Helping Small Businesses making profits.
says Othman. “But if they go into halal
Ten years ago, Nestle Malaysia rolled out certification, they will find that there is a
its first advertisement for its mentoring “The best way forward is
lot to learn. For example, if the food they going into halal with good
programme. To date, more than 1,200 serve is halal, but their restaurant is dirty,
small and medium-sized enterprises intentions, that is doing it to
then they will not be certified halal by fulfil the needs of consumers
(SMEs) have enrolled in the programme. JAKIM.”
Created by Nestle under its corporate especially the Muslims,” says
social responsibility programme, the Othman. “If we do that, Insyallah,
Othman adds: “Halal alone won’t take you
mentoring programme aims to impart the the rest of our business targets in
far.” He points out that food must also be
knowledge and skills acquired by Nestle halal will be achieved”. For Nestle,
“thoyyiban”, which encompasses quality.
on not only halal matters but also on it seems the rewards have already
In other words, food must be nutritious S&A
productivity, marketing, quality assurance, arrived. News
and hygienic, and manufacturers must
efficiency measurement and even how ethically deliver what a consumer wants.