등록일 2024.12.02
Greater Sulu-Sulawesi Economic Corridor (3)
Food Processing Industry in Sulu-Sulawesi Economic Corridor
Young Kyung Ko (ASEAN Center, Asiatic Research Institute, Korea University)
The food processing industry has been identified as having the highest growth potential in the GSSC, with all three participating countries deemed suitable for value chain development.
The government has already designated the food processing industry as a priority for fostering, and the Philippines, Indonesia, and Malaysia all manufacture and export a variety of processed foods. Key products include coconut-based goods, palm oil products, cocoa, and fruit beverages. With the foundation of the food processing industry already laid, accelerated growth can be achieved through government support and improvements in the business environment. However, many companies in this industry are small and struggle to achieve economies of scale and competitiveness in foreign markets. A notable example is the food processing industry in the Mindanao region of the Philippines, where companies face challenges related to scale and overcrowding of small businesses. These companies hope that value chain development will help address these issues. Furthermore, they look forward to expanding into nearby and overseas markets and facilitating the easy procurement of production factors such as land, labor, and raw materials.
The Greater Sulu-Sulawesi Economic Corridor has high potential to become a hub for halal food within the food industry. Malaysia and Indonesia have Muslim populations accounting for 63% and 87%, respectively, while in the Philippines, the Muslim population is only 6.4%. However, over half of the Muslim population in the Philippines resides in the Mindanao region, accounting for 24% of the region's population. Therefore, within the economic corridor, the three countries share a common denominator for the development of the halal food industry.
Halal food requires "halal certification," and this process involves detecting non-halal substances and strict quality control, necessitating technically sophisticated processes and large-scale production capacity. Therefore, high-tech hubs for halal food production are considered essential infrastructure for both regional and global competition. For example, multinational food companies like Nestlé establish and apply halal standards throughout the entire process from farms to tables to produce their products.
The government of Sabah State in Malaysia aims to become a hub for halal food production, applying stringent quality management standards to local halal food manufacturers while emphasizing the use of advanced processes. The palm oil industry clusters in Kota Kinabalu Industrial Park and Lahad Datu have been designated as Halal Parks, receiving halal compliance certification. These industrial parks provide incentives to tenants and streamline the halal certification process for products of resident companies. According to the "BIMP-EAGA Investment Opportunities in Corridor Value Chains (2017)" report, there are 249 halal-certified companies in Sabah, including 20 multinational corporations and 229 small and medium-sized enterprises (SMEs).
<Philippine Halal Industry Development Strategic Plan>
Source: Philippine Halal Industry Development Strategic Plan 2023-2028 p16,
https://dtiwebfiles.s3.ap-southeast-1.amazonaws.com/e-library/Other+Publications/Philippine+Halal+Industry+Development+Strategic+Plan+2023-2028_Narrative+Report_Final+3+single.pdf
Mindanao is also making efforts in halal food production. Under the Philippine Economic Development Plan, the Halal Export Development and Promotion Board (Halal Board) has developed a roadmap and initiated plans for the development of the halal food industry. In accordance with this plan, the Muslim-majority Autonomous Region in Muslim Mindanao (BARMM) has been designated as the halal production hub of the Philippines. The Philippine government has formulated the Halal Industry Development Strategic Plan 2023-2028 to advance the country's halal industry and aims to establish the Philippines as a halal hub by 2028. The Philippine government expects to create 120,000 jobs and attract $4 billion in investment through the halal industry. The BARMM government has also established support measures for enhancing the competitiveness of the halal industry in the region through the Second Bangsamoro Development Plan 2023-2028 and the BARMM Halal Development Plan 2023-2028. These development plans are aligned with the assistance of BIMP-EAGA member countries.
Indeed, the activation of cooperation between Sabah and Mindanao within the Greater Sulu-Sulawesi Economic Corridor is expected to accelerate the development of the halal food industry value chain.