Priorities in Malaysia

Yoke Fong Chong

FMM MAFMAG

Technical Barriers to Trade Priorities in Malaysia

Presented by:

Chong Yoke Fong

FEDERATION OF MALAYSIAN MANUFACTURERS

MALAYSIAN FOOD MANUFACTURING GROUP

(FMM MAFMAG)

About Malaysia

• Malaysia has an area of 329,758 square kilometers (127,320 square miles).

• Population - 29.2million

• Multiracial country - 58% Malays, 26% Chinese, 7% Indians, 9% other groups

• Inflation% (CPI) : 2.7%

• Per capita income : RM29,094 (USD9,508)

• GDP growth : 5.1% (2011)

Natural resources: crude oil, natural gas, tin, timber, palm oil, rubber

Malaysia: Trade Stats • Total Trade in January 2012 – valued at RM105.4 billion, a growth of

1.7% from 2011.

• Trade surplus registered at RM8.8 billion

• Malaysia’s major trade partners:

FMM Brief Background

• Established on 2nd July, 1968

• Companies from many Industry Sectors

• Membership categories: Ordinary, Affiliate, Association

FMM

• Established on 24th September, 1984

• Membership:

Manufacturers and affiliates in the Food and Beverage

Industry

• 68 companies to date

FMM MAFMAG

FMM MAFMAG Objectives

• Cohesive group to promote co-operation among food industries;

• Promote development of food industries by formulating recommendations on investment incentives, market protection and other measures;

• Channel of communication between food industries and government on relevant matters;

• Active participation in ASEAN and international activities e.g. ASEAN-ICC, Codex Committees.

Common Technical Trade Barriers

Common Technical Trade Barriers

• Customs & Administrative Entry Procedures – Pre Market Product Registration

– Importation of Flavours

– Requirement of COA for Custom Clearance

• Standards – Different Tolerance Limit for Nutrients

– Different Contaminant Limits

– Ever-changing & Stringent Microbiology & Contaminant Limits

• Labelling – Local language requirement

– Format of Nutrition Information Panel

– Different nutrition reference values

Customs & Administrative Entry Procedures

Pre-Market Product Registration • Multiple

registration process

• Long registration lead time

• Restrictions

• Manufacturing Process Chart

• Certificate of Composition

• Certificate of Origin

• COA for Raw Materials

• Certificate of Compliance for Packaging

• GMP / ISO Certificate

• HACCP Certificate

• Health Certificate

• Free Sales Certificate

• Sanitary & Phyto-Sanitary Certificate

• Certificate of Analysis

• Certificate of Keeping Quality

• FDA / ML Number

• Actual Label Sample

Pre-Market Product Registration

Multiple

Registration

Process

Long Registration Lead Time

Some Restrictions…

Change of label

needs FDA

approval ….

Lead time…

Any changes, no

matter how

small, needs P5

re-registration.

Product must be

in market within

3 months of

BPOM approval.

Pre-Market Product Registration

Impact: - Overly burdensome product registration requirements - Risk to intellectual property

Importation of Flavours

• Warranty Letter

• Free Sales Certification

• Health Certificate

• Ingredient breakdown of the flavour

• Absence/ presence of animal ingredient declaration

• Allergen declaration

Malaysia MOH - Registration & Yearly Renewal

Impact: - Additional administrative work

Requirement of COA for Custom Clearance

Every shipment to be accompanied with

COA for Every Batch • Samples to 4 labs at 4 countries - accreditation issue. • Analytical cost RM 1845 per batch. •10 days Release Time. •Warehouse cost RM 2K/MT product. •Huge resources.

Analysis Lab Method Cost (RM)

Moisture NQAC-NN LI-20.014-2 20

Caffeine Shah Alam LI20.020-1/LC-UV 96

Ash Shah Alam LI00.565-4/Gravimetry 42

Salmonella Shah Alam LI00.713-4 LI00.746 80

Staph. aureus Shah Alam LI00.750-4 32

Total Alfatoxin Weiding LI12.503 473

Tin Singapore LI-00.848-1 / ICP-MS

(single elements) 325

Total Arsenic Singapore LI-00.848-1 / ICP-MS (5

elements) 425 Lead Singapore

Mercury Singapore

Copper Shah Alam LI-SGRL-99.110 / ICP-MS 75

Zinc Shah Alam LI-SGRL-99.110 / ICP-MS 75

Courier Cost FEDEX

202

Total 1845

Requirement of COA for Custom Clearance

Starlink Certificate

(Chemistry

Department,

Malaysia)

Certificate for

Non-Genetically

Modified

Organism

Impact: - Cost, duplication of certification, resources

Standards

Different Tolerance Limit for Nutrients

Country Tolerance Limit for fortified nutrient (of

declared value)

Malaysia Min 80%

Thailand Min 100%

Indonesia Min 100%

Philippines Min 80%

Impact: Declared value of a fortified nutrient is different for a same product recipe

Different Tolerance Limit for Nutrients

Country Tolerance Limit for Sodium of the declared value

Malaysia Max 120%

Thailand Min 100%

Indonesia Max 120%

Philippines Min 80%

Sodium -

Desired or Undesired Nutrient?

Sodium (mg/100g)

Selling Country Declared Value

(mg/100g) Min Max

Malaysia 120 - 144

Thailand 100 100 -

Indonesia 120 - 144

Philippines 120 96

Operating norms tighten to 100 – 144 mg/100g in order to meet all market requirements

Illustration of a product with sodium declaration

Different Contaminant Limits

Vietnam Thailand Malaysia Indonesia

Tin 40 250 50 152

Arsenic 0.1 2 0.1 0.38

Lead 0.02 1 0.2 1.14

Mercury 0.05 0.5 0.05 0.05

Copper 5 20 - 5

Zinc - 100 - -

Contaminant or Nutrient? Heavy Metal Limits (in ppm) for Infant Cereals

Impact: - Restriction to cross border trade

Updated 25 Mar

2011

Old 2010 NEW

MicrobiologicalsTotal Plate Counts (TPC) 1 x 10 2 10 < 10 colony/ 0.1ml

Old:unit = col/ml.

New:unit = col/0.1 ml

MPN coliform /ml < 3 - -

S. Aureus /ml 0 - -

Clostridium Perfringens /ml 0 - -

APM E. Coli < 3 /g

Salmonella sp. Negative /25g

Yeast & Mould 1x102 colony/g

Heavy Metals Arsenic (As) ppm 0.1 0.1* 0.1*

Cadmium (Cd) ppm 0.2 0.2

Mercury (Hg) ppm 0.03 0.03

Tin (Sn) ppm 250 (tin) 250 (tin) 250 (tin)

40 40 40

Lead (Pb) ppm 0.2 0.02* 0.02*

Copper (Cu) ppm 2.0 - -

Zinc (Zn) ppm 5.0 - -

Mycotoxin Aflatoxin M1 ppb 0.5 0.5

* based on ready to consumed products

CONTAMINANTS PARAMETERLimits

Unit Remarks

Ever-changing & Stringent Microbiology &

Chemical Contaminant Limits

Impact: - Disruption to operation

Labelling

Labelling

– local languages, different NIP format & NRV

One recipe, 4 different labels

Thailand Malaysia Indonesia Philippines

Impact: - No shared packaging - Not being able to maximise economies of scale

Opportunities?

Harmonisation

1. Harmonised system for Product Registration, Import & Export Certification

2. Uniform standard of Food Safety & Nutrition limits across Asean aligned to international standards

3. A uniform standard on Labelling

Industry’s Role

1. Active interaction between industry associations across Asia

2. Share experiences of trade and regulatory priorities

3. Seek appropriate platform to shape Asia regulatory landscape

Thank You