FEATURE

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

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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 inter-
company 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
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.
Othman Md Yusoff
Chairman, Nestle Halal
Committee Regulatory
Affairs.
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
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