KUALA LUMPUR: Sales from the ongoing Food and Drinks Malaysia (FDM) exhibition here are set to exceed last year’s figure of US$265 million or RM1.081 billion, despite challenges such as supply chain impediments and rising costs.
Henri Tan, managing director of SIAL Network ASEAN & India, is confident in beating the target due to increased demand for food products and ingredients, brisk business matching deals and a spike in exhibitors and visitors.
He said this clearly reflects the optimism in Malaysia’s food and beverage (F&B) industry’s growth despite rising food prices due to higher transport costs.
Food costs have risen due to geopolitical tensions, which have disrupted food shipments through the Strait of Hormuz amid the conflict in West Asia, he told Bernama in an interview on Tuesday.
Visitor traffic to the expo, held at the Malaysia International Trade and Exhibition Centre, is projected to increase by 20 per cent to 18,000 from 15,184 recorded last year.
Tan attributed the expected increase to stronger international participation, noting that 60 per cent of the more than 450 exhibitors are international companies, including those from South Korea, Brazil and Turkiye.
SIAL -- which stands for Salon International de l'Alimentation, the world's largest food innovation network -- is the organiser for the three-day event which kicked off yesterday.
The SIAL network partners with local organisers to host FDM, connecting ASEAN and Malaysian F&B markets with global suppliers, distributors and industry leaders.
F&B INDUSTRY LOOKING FOR GOVT’S SUPPORT UNDER 2027 BUDGET
Amid fears that the on-off conflict in West Asia could escalate further, Tan said F&B manufacturers, producers as well as retailers are looking for the government’s support to help with the rising costs.
He said under the 2027 Budget, the government could help F&B entrepreneurs through technological funding support to train F&B industry human resource personnel in embracing digitalisation and pursue innovation.
He also urged the government to assist small and medium enterprises in the F&B business to expand their operations by way of tax incentives or subsidies to enable them to adapt to new technologies and enhance their business skills.
They could also be given financial support to learn the intricacies of artificial intelligence (AI), which they can utilise to increase the efficiency of their business operations, said Tan.
"With AI, they could catch up with the ever-changing dynamics of food technologies. We need to upgrade ourselves,” he said.
PROTECTIONIST TENDENCIES HAMPERING ASEAN’S FOOD SUPPLY CHAIN COOPERATION
On food security and overcoming food chain supply obstacles, Tan said greater regulatory cooperation among ASEAN member countries is needed to facilitate cross-border sourcing of food products and raw ingredients, which could help reduce costs and strengthen regional food security.
He said closer collaboration between neighbouring countries such as Malaysia, Thailand and Indonesia could enable manufacturers to source supplies efficiently within the region instead of relying on imports from Europe and the Middle East, where logistical impediments have raised costs due to the United States-Iran war, which doesn’t seem to be ending anytime soon.
"Local suppliers have to get up to speed to increase their production sufficiently, (and) then you can cut down the food import bill,” he said.
"Locals are not producing enough, so naturally we have to import. Moreover, export quotas imposed by our neighbouring countries have forced us to source F&B products from India," he said.
He said protectionist tendencies in the form of regulatory barriers and export restrictions remain as challenges, as many countries are prioritising domestic food security and supply needs amid the ongoing global geopolitical uncertainties.
INNOVATION KEY TO MITIGATE RISING FOOD COSTS
To mitigate these challenges, Tan urged the industry to increasingly focus on food innovation, which is already being driven by a combination of geopolitical instability, rising input costs and the need for food security.
Food innovation could improve resource efficiency, reduce food waste and develop value-added products using locally sourced ingredients.
He cited oyster farming in Johor, new downstream durian products and innovative uses of local ingredients, including pepper-based products, as steps in the right direction.
Such initiatives demonstrate the industry's efforts to reduce import dependence while creating higher-value offerings, he said.
Despite mounting cost pressures and an uncertain global environment, Tan believes the F&B industry will continue to adapt, pointing to its resilience during previous crises such as the devastating SARS outbreak in 2002 and the COVID-19 pandemic.
"The food industry has always adapted with consumers adjusting their spending habits while businesses continue to innovate and improve efficiency.
"Human beings have an instinct to survive, which is why the industry will continue to evolve," he said. - Bernama
