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A $100 million financing arrangement has been arranged by the agency in charge of promoting Malaysia’s halal sector to the rest of the globe, allowing more Malaysian enterprises to enter markets in the Middle East and North Africa.
The collaboration between Malaysia’s Halal Development Corporation (HDC) and Standard Chartered Saadiq would help businesses of all sizes gain access to financing and support to expand their commercial ties with the region. The finance initiative will also help significant Middle Eastern halal manufacturers and suppliers invest in Malaysia’s halal parks, thereby expanding the local market.
“This is an excellent opportunity for HDC to play a role in completing one of the most vital needs of many halal companies. The financing program will enable these companies to enter strategic halal markets including the Middle East and Africa,” said Hairol Ariffein Sahari, Chief Executive of HDC.
HDC negotiated the contract with Saadiq over six months, and it will be available through the Halal Integrated Platform (HIP), the agency’s recently built online hub that combines all its services, from certification to locating overseas consumers and providing financing.
The conditions of the financing have not yet been revealed, but it is expected that the focus would be on small and medium enterprises (SMEs). The funding will be distributed in the form of loans rather than grants.
“We want to open up the Middle East market, so we talked to Saadiq to say that SMEs that would like to enter it need financing. At the same time, we are also encouraging businesses on that side of the world who want to come into Malaysia to come to our halal parks. They can access that money too.” said Adly Mohamed, HDC’s chief commercial officer.
Malaysia has made a big deal out of its 14-halal manufacturing, services, and logistics parks. Through HDC, tenants at these parks can profit from benefits such as waived import duties and tax exemptions for up to ten years.
HDC and Saadiq will collaborate to create a trade facilitation program that will match Malaysian firms with Middle Eastern buyers. HIP will be used to make this available. One of the functions of the massive internet resource is to connect global halal manufacturers and suppliers with their Malaysian counterparts.
“We are still very focused on Malaysian businesses, but we want to spread trade all round the world through HIP. What I would like to have is a virtual highway between Malaysia and other countries,” said Adly.
With the Saadiq contract ready to make the Middle East a new halal commercial hub for Malaysia, HDC plans to focus on Australia and the United Kingdom as new destinations for the agency’s virtual highway next year.
“Sooner or later, apart from creating awareness, we will see more companies engaging with us in terms of trade and finance. That’s exactly what we want,” said Adly.
