KUALA LUMPUR (Aug 25): In line with the growing popularity of Japan as one of the top travel destinations in the world, Japanese companies are now striving to incorporate halal into their products and services.

Nihon M&A Center senior deal manager ⁠Ryosuke Sakamoto said Malaysia is one of the main countries it is partnering with to bolster this demand.

Malaysia offers diverse investment opportunities for Japanese companies, particularly within the promising halal ecosystem, he said.

“This ecosystem presents significant prospects in various sectors, including food and beverages, personal care, cosmetics, nutraceuticals, logistics and tourism.

“Japanese companies, renowned for their high standards and innovative approaches, are well-positioned to leverage these opportunities, expanding their market reach and contributing to the growth and development of the halal industry globally,” Sakamoto told Bernama.

He also said that the Japanese Exchange Group, one of the leading exchange groups in the Asia-Pacific region, valued the global halal food market at US$2.468 trillion (RM10.8 trillion) in 2023, with projections suggesting a surge to US$5.81 trillion by 2032.

Within this market, Malaysia stands out as a compelling investment destination, Sakamoto said, adding that Japanese companies also view Malaysia as an attractive investment hub and are eager to do business in the country.

For eight consecutive years since 2015, Japan has been Malaysia’s fourth largest investor, highlighting its significance to Malaysia’s economy.

In 2022, Japanese foreign direct investment (FDI) in Malaysia reached an impressive US$27 billion, leading to the creation of 336,000 jobs, according to Malaysia’s Ministry of Finance.

“Recent visits by Prime Minister Datuk Seri Anwar Ibrahim to Japan have further bolstered this positive outlook, securing investment potentials worth RM6.56 billion (as of 2023),” he said.

Nihon M&A Center senior consultant Law Sem Liang said that for decades, Malaysia has been a steadfast trading and technology ally for Japan.

“Now, as Japanese companies aim to expand in the global halal markets, Malaysia’s position as a halal gateway is invaluable. According to the Malaysia External Trade Development Corporation (Matrade), Malaysia’s halal market is projected to reach US$113.2 billion by 2030.

“Thus, Japanese investors are increasingly looking to establish a presence in Malaysia’s growing consumer market through merger and acquisitions (M&A), tapping into a wealth of regional prospects,” he said.

Law noted that major food and beverage companies such as Ajinomoto, Asahi Beverage, Kewpie and Umakane have already set up operations in Malaysia, with trade destinations extending to the Middle East and also back to Japan.

“It is not just halal food and beverage that attract Japanese companies; there are substantial opportunities in halal logistics, cosmetics, and personal care. These sectors offer ample potential for joint ventures with local small and medium enterprises (SMEs), enabling technology transfers that benefit both countries,” he said.

Law also said that a prime example is Kewpie Malaysia Sdn Bhd, a wholly-owned Japanese company that, in 2011 became the first Japanese multinational food manufacturer producing halal food at the Halal Hub Industrial Park in Serkam, Melaka.

“Halal parks like these are highly attractive for Japanese companies, providing immersion into the halal ecosystem, access to communities of halal-oriented businesses, world-class facilities, and skilled labour,” he said.            

Nihon M&A Center provides financial services focusing on mergers and acquisitions related services such as reorganisation and management buyout, especially for small and medium-sized enterprises.

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