RM866m halal deal hits setback after Olympics postponement

THE Tokyo Olympics’ postponement to 2021 had impacted Malaysia’s plans of exporting up to US$200 million (RM866 million) worth of halal products and services during the Games, originally scheduled from July 24 to Aug 9, 2020.

Malaysia, via government-linked Halal Development Corp Bhd (HDC), is the only country that has inked a deal with Tokyo to provide halal goods for the largest sport gathering on the planet.

However, the coronavirus pandemic, which has claimed the lives of more than 100,000 people and wreaked havoc across all sectors including sports, had forced the organiser to postpone the Games by 12 months.

HDC now has to recalibrate its plans despite the millions invested for the 2020 summer Olympics. The largest sports gathering in the world, involving more than 200 countries and over 11,000 competitors, would have boosted Malaysia’s halal exports by more than a third. The government had set a target of selling up to US$300 million worth of halal food and products at the Olympics.

HDC CEO Hairol Ariffein Sahari said he remains optimistic that the existing arrangements with Japan will carry through to the 2021 Games.

“As far as halal is concerned, the game is still on for Malaysia. The country was called to play a central role in halal integration for the Olympics. That means we’re not just talking about trading products, but also investment and technology transfer,” he told The Malaysian Reserve.

Japan was looking to attract up to 40 million tourists this year to the Games, out of which eight million will be Muslims.

To meet the need of visitors to the sporting showcase, Malaysia and Japan signed a memorandum of cooperation in 2018 to set-up a halal ecosystem that would cover trade and investment, hospitality and tourism services, training and consultancy, as well as certifications and standards.

Companies such as Nippon Express (M) Sdn Bhd, a local subsidiary of Japan’s Nippon Express Co Ltd, provided the infrastructure to uplift the halal supply chain.

Nippon last month completed construction of its Shah Alam Logistics Centre — its most extensive single-structure multifunctional logistics warehouse outside of Japan. The centre plans to obtain halal certification in anticipation of future growth in the Muslim population and consequently, an expansion of the halal market.

Last year, Japanese restaurant operator Zensho Holdings Co Ltd acquired Malaysia’s The Chicken Rice Shop (TCRS), a halal chain of specialty restaurants with 100 outlets, for about RM220 million. It is widely speculated the purchase would give Zensho a footing in the halal food market, especially for Japan’s Olympics.

HDC had prepared a line-up of business events, forums and conferences in Japan to promote Malaysia’s halal products. Those events have been temporarily shelved.

Hairol said the postponement has resulted in an opportunity delay of US$150 million to US$200 million for Malaysia and US$3 billion for halal producers globally. Last year, Malaysia’s halal export to Japan stood at US$600 million.

The Japanese Embassy in Malaysia, when contacted, said there have been no arrangements made with Malaysia and other countries for the Tokyo Olympics after the postponement was announced.

The embassy’s Japan information service director Mitsuhiko Sugita said: “I hope that as many Malaysian athletes as possible will take part in the Games and as many Malaysian people as possible will go to watch the Games in 2021.”

Global concerns over the coronavirus had forced Japan to postpone the world’s biggest sporting event last month. Market observers were counting on the 2020 Olympics and Paralympics to help Japan’s economy rebound. Economic benefits were expected to spread across sectors from construction to services.

The Olympics are now scheduled to run from July 23 to Aug 8 in 2021, followed by the Paralympics from Aug 24 to Sept 5.