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FeatURe

Nestle Malaysia: Pioneer in

Halal Food MaNuFacturiNg
Nestle Malaysia is the biggest manufacturer of halal food within the Nestle Group worldwide. Today it exports more than RM800 million worth of halal food and drinks from Malaysia to over 40 countries. The company is now recognised as a leader and trusted manufacturer of halal food in the world.

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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 through Nestle Malaysia but has also expanded the production and distribution of its halal products all over the world. The company’s seriousness in complying with halal requirements and standards is reflected in the formation of its own Nestle Halal Committee Regulatory Affairs. The Committee Chairman, Othman Md Yusoff, says that Nestle’s foray into 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 responsibility awareness to fulfil the needs of Muslim consumers. The halal industry is one of the fastest growing markets in the world. The 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 driving up demand, it is easy to see why many companies today are eager to take their slice of the halal pie. For Nestle Malaysia however, the venture into halal food manufacturing since the 1970s stemmed from its social 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

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“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 wants.
halal products and handle halal affairs for Nestle. The committee comprises of 16 members made up of Muslim senior executives drawn from various departments and is also responsible for training workers on complying with halal standards and auditing Nestle factories worldwide. Nestle can be considered a pioneer multi-national company in the halal food industry. It established its own halal policy two years before the Department of Islamic Development Malaysia ( Jabatan Kemajuan Islam Malaysia, or JAKIM) required halal certification in 1994. In 1997, Nestle Malaysia worked closely with Pusat Islam and other Islamic bodies and experts to develop a set of internal guidelines called “Guideline for intercompany supply of halal food” which served as a reference for Nestle divisions worldwide on the aspects of halal food production. These advances in halal food development lead to Nestle Malaysia being chosen as Nestle’s centre of excellence for Halal. Today, there are 75 Nestle factories worldwide (including six in Malaysia) that are certified halal. Helping Small businesses Ten years ago, Nestle Malaysia rolled out its first advertisement for its mentoring programme. To date, more than 1,200 small and medium-sized enterprises (SMEs) have enrolled in the programme. Created by Nestle under its corporate social responsibility programme, the mentoring programme aims to impart the knowledge and skills acquired by Nestle on not only halal matters but also on productivity, marketing, quality assurance, efficiency measurement and even how

Othman Md Yusoff Chairman, Nestle Halal Committee Regulatory Affairs.

to budget for losses. In this respect, Nestle helps participating companies understand its internal halal guidelines and the Malaysian Standards pertaining to halal requirements i.e. MS 1500: 2004. Recently, Nestle collaborated with the Small and Medium Industries Development Corporation (SMIDEC) and the Halal Development Corporation (HDC) to further enhance the programme. Nestle has also gained from its mentoring programme in the way that many participating SMEs have become Nestle’s suppliers through the guidance they received on how to improve their product quality and comply with halal standards. The programme continues to create a wave of new SMEs that have the potential to become future partners. The programme has also done much to help spread knowledge amongst SMEs on halal matters. “Many Muslim restaurant owners don’t bother with halal certification because they assume that by being Muslims, the food they serve is automatically halal,” says Othman. “But if they go into halal certification, they will find that there is a lot to learn. For example, if the food they serve is halal, but their restaurant is dirty, then they will not be certified halal by JAKIM.” Othman adds: “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 wants.

Reaping the Benefits Nestle Malaysia is the biggest manufacturer of halal food within the Nestle Group worldwide. Today it exports more than RM800 million worth of halal food and drinks from Malaysia to over 40 countries. Othman says since Nestle Malaysia began production of halal foods, it has seen an increase of 15% to 23% in exports over the past four years. The benefits are not just financial. Othman says there are intangible rewards too from Nestle’s halal production – the company is now recognised as a leader and trusted manufacturer of halal food in the world. Drawing from Nestle’s experience, Othman specifies three requirements for a company to fulfil before it can take off in the halal market. First of all, he says, one has to learn and understand all the aspects of halal and know what they are getting into. Next, everyone in the company must be committed and fully implement halal requirements – there should be no compromise in ensuring halal food. Finally, Othman stresses that one must be sincere in implementing halal standards. He says most companies are venturing into the halal market with the sole purpose of making profits. “The best way forward is going into halal with good intentions, that is doing it to fulfil the needs of consumers especially the Muslims,” says Othman. “If we do that, Insyallah, the rest of our business targets in halal will be achieved”. For Nestle, it seems the rewards have already S&A arrived. News 9

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