| By Daily Express

The halal industry has become one of the world’s fastest-expanding economic sectors, extending far beyond food and beverages into areas such as cosmetics, pharmaceuticals, logistics, finance, and tourism. Data from the Malaysia Digital Economy Corporation (MDEC) estimates the global halal market to be worth over US$2 trillion annually, with projections indicating growth to US$2.8 trillion in the near future.

This expansion is driven not only by Muslim consumers but also by non-Muslims who associate halal products with safety, hygiene, transparency, and ethical standards. As a result, halal has evolved from a faith-based requirement into a globally recognised quality benchmark.

Malaysia has long played a leading role in this industry. The country is widely recognised as a global halal hub, supported by the Department of Islamic Development Malaysia (JAKIM), whose halal certification is acknowledged by more than 47 countries and 84 certification bodies worldwide. According to the Halal Development Corporation (HDC), Malaysia’s halal food and beverage sector generated RM22.05 billion in revenue in 2019, while exports reached RM20 billion the previous year. These achievements reinforce Malaysia’s credibility and leadership within the global halal economy.

Within this national framework, Sabah is increasingly positioning itself as a stronger contributor to Malaysia’s halal ecosystem. The governance of halal matters in Sabah has evolved significantly over time. Initially managed under the Prime Minister’s Department at the federal level, responsibility in Sabah later fell to the Majlis Ugama Islam Sabah (MUIS). With the establishment of the Jabatan Hal Ehwal Agama Islam Negeri Sabah (JHEAINS) in 1996, halal certification processes became more structured.

A major milestone was reached in 2020 when MUIS approved the creation of the MUIS Halal Hub (MHH), which officially commenced operations in 2021. The hub was established to centralise halal certification, improve processing efficiency, strengthen credibility, and enhance SME participation in the halal economy. Beyond certification, MHH aims to promote halal industry development across multiple sectors as part of Sabah’s broader economic growth strategy.

Sabah’s involvement in halal tourism, agro-based exports, and its strategic location within the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA) further strengthens its potential to emerge as a key halal player in the region.

Sabah’s Industry Opportunities

Sabah holds several strategic advantages that support its expansion within the halal economy. Geographically, it serves as a gateway to Borneo and lies close to Brunei, Kalimantan, and the southern Philippines, positioning the state as a potential logistics and distribution hub for halal products under the BIMP-EAGA framework.

Halal logistics plays a critical role in maintaining product integrity across the supply chain. Unlike conventional logistics, halal logistics operates under strict Shariah-compliant requirements designed to prevent contamination with non-halal elements. Combined with Sabah’s sizable Muslim population, this strengthens domestic demand while enhancing international competitiveness.

Halal products also enjoy strong acceptance among non-Muslim consumers in Sabah, where they are widely perceived as symbols of quality, safety, and ethical production. Tourism presents another significant opportunity. Between January and September 2025, nearly three million visitors were recorded by the Sabah Tourism Board. With the global rise of halal tourism, Sabah could expand its offerings through halal-certified accommodation, dining, handicrafts, and Muslim-friendly travel services integrated into its eco-tourism appeal.

Beyond food and tourism, Sabah has growing opportunities in halal cosmetics and pharmaceuticals. The Asia-Pacific region dominates the global halal cosmetics market, accounting for over 64% of market share, driven by demographic growth, demand for natural ingredients, and increasing consumer awareness across Malaysia, Indonesia, India, and China. Sabah entrepreneurs can tap into this trend by developing halal-compliant brands that emphasise ethical sourcing and product safety.

Halal pharmaceuticals and wellness products also offer diversification opportunities. Sabah’s rich terrestrial and marine biodiversity positions it well as a potential supplier of halal-certified raw materials. Collaboration between research institutions, universities, and certification bodies could strengthen innovation while ensuring global compliance.

Innovation and social entrepreneurship further enhance Sabah’s halal potential, aligning with the Malaysia Social Entrepreneurship Blueprint 2030. Halal social enterprises can integrate rural communities, smallholders, and coastal producers into certified supply chains, promoting inclusive growth. For example, value-added halal seafood products could establish Sabah’s distinctive presence in global halal trade.

Digitalisation strengthens this ecosystem by enabling SMEs to overcome geographic barriers, expand through e-commerce, enhance traceability, and improve transparency—key requirements for global halal competitiveness.

Key Issues and Challenges

Despite its potential, certification remains one of Sabah’s most pressing challenges. Studies by JAKIM indicate that many Bumiputera SMEs remain reluctant to pursue halal certification due to perceived high costs, procedural complexity, and limited understanding. At the consumer level, misconceptions persist, with many equating “pork-free” or “Muslim-friendly” offerings with halal compliance. These gaps weaken confidence in the halal ecosystem and limit its overall impact.

Infrastructure poses another major challenge. Sabah’s dispersed rural settlements and challenging geography complicate logistics, particularly for perishable halal products such as seafood. Research by Hopes Malaysia (2025) highlights persistent deficiencies in road access, utilities, and electricity in rural areas, increasing costs and disrupting supply chain consistency. Poor connectivity undermines both product integrity and export competitiveness.

Moreover, Sabah’s halal development has largely focused on food and beverages, leaving other high-growth sectors—such as cosmetics, pharmaceuticals, logistics, finance, crafts, and tourism—underdeveloped. Limited policy guidance, weak awareness, and the absence of targeted state-level frameworks have constrained progress. For instance, while halal cosmetics and pharmaceuticals show strong national potential, Sabah lacks sufficient certified facilities and producers.

The craft sector, one of Malaysia’s top three, generates over RM63 million annually and involves more than 1,700 artisans. With proper certification, ethical branding, and tourism integration, it could become part of the global halal lifestyle market. However, policy alignment and market access remain key barriers.

Similarly, although Sabah is a leading eco-tourism destination, awareness of halal tourism certification and Muslim-friendly services remains limited. The absence of a Sabah-specific halal development policy has resulted in fragmented implementation of federal initiatives such as the Halal Industry Master Plan 2030.

Moving Forward

To strengthen its position within the halal economy, Sabah has an opportunity to adopt a coordinated and inclusive development strategy. Strengthening collaboration among MUIS, JAKIM, and related agencies can streamline certification, enhance enforcement, and build SME capacity through training and digital tools.

Investments in halal-compliant logistics infrastructure, industrial parks, and traceability systems are essential for safeguarding product integrity and expanding exports. Diversification into emerging sectors such as cosmetics, pharmaceuticals, crafts, and halal tourism will unlock new growth avenues.

Developing a Sabah-specific Halal Development Blueprint aligned with the Halal Industry Master Plan 2030 could provide a clear policy roadmap. By leveraging its strategic position within BIMP-EAGA, Sabah has the potential to emerge as a competitive, inclusive, and globally recognised halal hub that drives sustainable economic growth and community well-being.

Source:

Daily Express. (2026). Halal – bridging regional strengths, global biz opportunities and emerging challenges. https://www.dailyexpress.com.my/news/273774/halal-bridging-regional-strengths-global-biz-opportunities-and-emerging-challenges/