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Macro environment affecting food industry in malaysia

How to cite this article: An Overview of Malaysian Food Industry: The Opportunity and Quality Aspects. Pakistan Journal of Nutrition, 8: Referring to that, the objectives of this paper is i to overview the present scenario in Malaysian food industry opportunities and development and ii to expose the concept of quality and standard that are able to use in Malaysian food industry.

On one side, standards are essential tools for local and international businesses, which shape the contribution of economic progress through industry development and trade, as well as, a guideline in the assurance of consumer protection. On the other hand, standards are able to be eliminators of trade barriers, which means that, they play a critical role to facilitate goods and services exchange across borders.

Orriss and Whitehead 2000shows that the globalization of food trade has focused its attention on strengthening measures taken to ensure quality and safety especially on imported foods. To achieve that purpose, it is required of the government to be responsible to established standards, legislation and enforcement programmes that are necessary to control food quality and safety. In addition, industries also play an important role in implementing quality assurance systems, where at the same time; they are also able to ensure they are in compliance to standards and legislation stated by a home or parent country.

Most of the countries have specific regulations, legislation, guidelines and acts, which are considered necessary to be complied to and implemented by food industries when they process their products. This is supported by Mohamad 2004b and SIRIM 2005where their policies state that there is a requirement for national standardization in order to adopt the international standards as the Malaysian Standard.

However, some adjustment is needed to be made to the standard implemented locally as it has been found that some standards may be inappropriate as international standard practice because of geographical and climatic factors as well as the fundamental technological problems.

The food control system is recognized by Malaysia as a system that requires a continuous re-examining and reviewing in order to ensure important improvements are effective in the food processing and production safety system.

Coordination and collaboration among various agencies in Malaysia is imperative for an effective and efficient food programme Codex Alimentarius Commission, 2006. When a country is aiming to achieve the effectiveness of a national food control system, it should gain the full support and coordination from all parties related to ensure the success of its food control system is well implemented, which involves food producers and the government.

However, both parties play different roles in the food safety guarantee before the food is consumed by the consumers. Referring to Mohamad 2004aa total food chain approach will recognize the responsibility that lies in all those involved in the production and delivery of safe food. Furthermore, the author explains that responsibility encompasses all stakeholders throughout the food chain, including farmers and the suppliers of farm and slaughterhouse produce and packinghouse operators, food manufactures, transport operators, wholesale and retail traders, caterers and street food vendors and also the contribution made by consumers.

According to Codex Alimentarius Commission 2006 and Orriss and Whitehead 2000producers at all stages of production, processing and distributing, must be responsible for safe food and should establish food safety assurance programmes while the government, on the other hand, plays the primary role of providing leadership for the implementation of the food safety assurance system.

To fulfill this role, various guidelines ranging from farms to tables macro environment affecting food industry in malaysia been developed to assist food industries and producers to better understand and implement food safety assurance programmes.

However, consumers should also be able to play active roles in the development of food standards which are justifiable as they are the only ones who understand their own needs best Mohammad 2004b. Referring to Mohamad 2004asmaller nations like Malaysia are bound to face difficulties in competing in the global trade economy that is mostly dominated by larger economies, as well as it is a complex process to develop adequate resources for their food industry development and trading.

Mohamad, 2004a; Yaakob et al. Adaptation from Muslim Population Worldwide 2006 in Yaakob et al. These growing Muslim consumer populations are expected to provide the entrance support for economies such as in production, marketing and distribution of a broader range of halal products Trade Mart, 2005; Department of Standard Malaysia, 2007. In relation to the growing demand for halal food which is influenced by the Muslim consumer awareness of their responsibility to consume only halal food Mohammad Noorizzudin et al.

The demand for halal products is therefore increasing and expected to continue rising in tandem with the increasing Muslim population all over the world. From the figures of Muslim populations stated, it can be concluded that the world halal food market potential not only comprise Muslim but also of non-Muslim countries Yaakob et al. Indication by Mohamad 2004a shows, the potential world market for halal-food is estimated to stand at USD 80 billion out of the world agricultural trade which is about USD 275 billion yearly.

Consequently, the increasing level of macro environment affecting food industry in malaysia and prosperity among Muslims, especially in West Asia and Asia, North Africa, Europe and North America will lift per capita demand for halal products.

Economic Factors

As Muslims become halal sensitive, the demand for the availability of a wider range of halal food and non-food products will expand to the market beyond the current level Trade Mart, 2005. According to Riaz 2007Jafri 2006 and Norlia 2008halal is universal, whereas the halal process is recognized by both Muslim and non Muslim consumers as a symbol of quality, safety and wholesomeness. Malaysia, foresees that there is great potential for developing and promoting halal products and services for the global market.

The Third Industrial Master Plan IMP3 2006-2020, specifies three main situations encouraging Malaysia to become a global halal hub for macro environment affecting food industry in malaysia production and trading in halal goods and services. This market has therefore created an interest for food production by both Muslim and non-Muslim countries.

Therefore, Mohammad Noorizzudin et al. This statement is supported by IMP3 2006which indicates that SMEs involve more than 80 percent of the total number of corporations in the food processing industry. The biggest segment of SMEs is involved in cereal and flour-based products, which produces grain milled products, bakery foodstuff and noodles and as well as other similar products.

In order for Malaysia to be established as a global halal hub, the Malaysian government prefers in encouraging Muslim SMEs participation. Mohammad Noorizzudin et al. The reason is, only the Muslims really understand the concept of halal permitted and haram prohibited according to the Shariah regulations. However, combinations practice of both standards i. These two standards as a combination must be complied with widely by all halal food manufacturers, as an assurance in producing quality halal products and as independent variables in penetrating the domestic as well as global halal markets.

In addition, the most important factor is that all the SMEs need a progressive action to certify their food products are of high halal quality halal, safe, hygienic and nutritious by the local authorized bodies JAKIM or other Islamic bodies depending on their market entry. Any country especially with a large Muslim population needs to consider in regulating and implementing the halal guidelines to have its food supply accepted by Muslim consumers.

For example, Indonesia is unquestionably the leader in the amount of food imported and its rigid laws in meeting the halal regulations.

  1. Moreover, it had a correlation between training provision and plant size, where, a bigger plant employing a large number of workers, the more often GHP training is organized for its employees.
  2. Halal and Haram are universal terms that apply to all facets of life. According to Jin et al.
  3. In relation to the growing demand for halal food which is influenced by the Muslim consumer awareness of their responsibility to consume only halal food Mohammad Noorizzudin et al. Enforcement of the HACCP system will help the implementation of other quality systems or standards practiced by food manufacturers.
  4. However, its implementation will not only reap benefits but may also cause some burden on food companies depending on their sizes, resources, incentives received, funds, training, management support and other relevant factors.

However, it is also mentioned that Malaysia is the pioneer in establishing halal laws in the early 1980s and remains a force in matters relating to halal certification globally Riaz and Chaudry, 2004. Halal and haram concept: Discussions and research regarding the halal concept, especially for halal meat, halal food and halal non-foodstuff, have appeared to become a worldwide subject of conversation among Islamic countries and in this decade itself there has been an awareness raised on this issue in non-Islamic countries in Asia, United States of America, Europe and other counties that need to fulfill their domestic Muslim market and as well as to expand into the global Muslim markets.

Nowadays, the concept of halal is internationally understood especially by food manufacturers and therefore helps them in expanding their export trade into the international market.

The opposite of halal is Haram, which means unlawful or prohibited. Halal and Haram are universal terms that apply to all facets of life. However, these terms are used mostly in relation to food products, meat products, cosmetics, personal care products, food ingredients and food contact materials and other aspects of life such as appearance items.

In Islam, there are dietary laws that define food as Halal or Haram. Halal foods are permitted while foods that are believed to be Haram are prohibited. As a main basis of understanding, Muslims are prohibited from consuming pork and alcohol because they are regarded as unclean or termed as Najis and therefore are both considered Haram. For Muslim consumers, for example meat products must be certified as Halal and must come from certified slaughterhouses that follow Islamic slaughter practices.

In a simple description as indicated by Yaacob et al. However, the term Toyibbah is referred to being good or wholesome, with respect to quality, safety, hygiene, cleanliness and nutrition and authentically scientific. While many items are clearly halal or clearly haram, there are still some things which are not clear.

These kinds of item are considered to be questionable or of being of a suspicious nature and therefore more information is needed to categories them as Halal or Haram. For instance, food containing ingredients such as gelatin, enzymes and emulsifiers are questionable and termed as Mashbooh, because the origin of these ingredients are unknown Agriculture and Agri-Food Canada, 2006.

Information reported by Agriculture and Agri-Food Canada 2006lists food considered as Haram include: They comprise; i whether the consumption of the macro environment affecting food industry in malaysia is prohibited by Allah s. These can be used as basic guidelines by Muslim consumers when consuming or buying. According to Mohammad Noorizzuddin et al. In a simple way, a standard can prevent the disorganization and it make things work, makes processes fit and smooth and also open them to better trade.

Furthermore, one of the standardization aims is to make the manufacturing process simple, cleaner, and to maintain a reasonable production cost. Standardization can also raise the quality, safety and reliability levels of food products and can definitely provide economical benefits Mohamad, 2004b. In addition, standards also are regarded as definitions of characteristics to ensure that material, products, processes and services are fit for the purpose of consumption or use Peri, 2006.

Overall, standardization of goods and services build consumer confidence with regards to quality and reliability of the sellers. Development of Malaysian standards: The Department of Standards Malaysia is a national standardization and accreditation body.

It main function is to foster and promote standards, standardization and accreditation.

Political Factors

According to SIRIM 2005development of Malaysian standards plays a role as a catalyst to national economy, promoting industrial efficiency and development, benefiting the health and safety of the public, protecting the consumers, facilitating domestic and international trade and supplementing international cooperation and expansion in relation to standards and standardization.

Additionally, Malaysian Standards are developed through consensus by committees which involve balanced representation of producers, users, consumers and others with relevant interest. Furthermore, Malaysian Standards are aligned to the adoption of the international standards and are reviewed periodically to ensure their efficiency from time to time.

However, this paper will briefly discuss the food processing standards related to the ones set by the Malaysia government.

Other relevant standards that are familiar to Malaysian food manufacturers and other multinational food companies are: This is also supported by Lokman 2008when he clearly states that: Thus, the model of the halal system and assurance should encompass a holistic concept of quality including hygiene and sanitary, safety, wholesomeness and is permissible by God.

Figure 1shows that the MS1500: The importance of HACCP system is that it is recognized internationally as a tool to control food related hazard.

Application of the HACCP system is the choice of many major importing countries, as it is confirmed by the increased adoption of the mandatory application of the HACCP system as a requirement for both domestically produced and imported food products Orriss and Whitehead, 2000; Taylor, 2001; Jin et al.

Macro environment affecting food industry in malaysia scheme requires the food industries to establish and implement the HACCP system that meets the pre-requisite criteria, followed by an application for certification of the system Ministry of Health Malaysia, 2008.

Enforcement of the HACCP system will help the implementation of other quality systems or standards practiced by food manufacturers.

  1. On the other hand, it also provides guidance for specific codes which may be needed for different sectors of the food chain processes or commodities; in order to amplify the hygiene requirement specifics to for those areas. However, the main purpose of this standard is to achieve the goal in ensuring that food is safe and also suitable to be consumed by human beings SIRIM, 2005.
  2. This is also supported by Lokman 2008 , when he clearly states that. Team members should conduct site inspections in accordance to the halal certificate application after applicants submit all the documents needed by JAKIM to evaluate before proceeding to the premise inspection and the inspection will only be comprehensive if conducted by a team.
  3. Supported by Yaakob et al. Although there is a slowdown in sales, fast food is a convenience and a necessity to many still.

Consequently, HACCP can be described as a catalyst in the implementation of hygiene and safety features in food preparation. This idea is supported by the research carried out by Jin et al. According to Jin et al. These are i consumer awareness of food safety ; ii extension and support from the government; iii compliance with the law and iv recommendation of industry associations. In addition, research did by Taylor 2001 supports HACPP systems that can be implemented by any company regardless of the size of company.

However, its implementation will not only reap benefits but may also cause some burden on food companies depending on their sizes, resources, incentives received, funds, training, management support and other relevant factors. However, if the burden is not too well managed especially by small companies the benefits of the HACCP will evaporate.

Referring to Konecka et al.

PEST Analysis Example for the Food Industry

The reason for this is that when the larger companies implement this system for export purpose, they also maintain consumer confidence. The writers also listed several factors which support the HACCP implementation by Polish food processing industries and they include: Referring to Food and Drug Administration, FDA 2001traditionally to ensure that food is safe, the industrial regulatory body conducts spot-checks on manufacturing conditions and conduct random sampling of final products.

However, this approach tends to be hasty rather than preventive and can be less efficient than the HACCP system.