Malaysian country bakery hits on halal-OEM for Japan market to weather retail storm

By RJ Whitehead

- Last updated on GMT

One Japanese company is using this halal-OEM strategy, though Nani’s is currently in midst of negotiations for offering the same service to another business from the same country. ©Nani's Frozen Food
One Japanese company is using this halal-OEM strategy, though Nani’s is currently in midst of negotiations for offering the same service to another business from the same country. ©Nani's Frozen Food

Related tags: Confectionery, Malaysia, Halal

Faced with falling retail sales, the chief executive of Nani’s Frozen Foods - a small baked confectionery business in northern Malaysia - changed tack and is now achieving success in the halal-OEM market, with Japan her main focus.

Instead of weathering the drop and hoping for an upturn in a difficult Malaysian economy while being challenged by a more health-conscious consumer base, Wani Aznan took the OEM route with a Japanese customer who was determined to have the Malaysian halal seal on their mochi, or traditional rice cakes.

It’s a Hokkaido-based company, they manufacture confectionery in Japan and are looking to expand their market into Malaysia and Indonesia. The markets here mostly consist of Muslims so they want to put on our halal logo​,” said Wani, from her base in Kedah.

They have certification bodies in Japan, but to export from Japan to Indonesia or Malaysia would cost so much more, so they do it through a manufacturing partner like us​.”

Wani’s approach seems appears to be novel within her segment, and she says it has helped her business temper difficulties caused by falling confectionery sales in Malaysia.

For now, just one Japanese company is using this halal-OEM strategy, though Nani’s is currently in the middle of negotiations for offering the same service to another business from the same country.

They want to have a piece of the cake​,” she said, probably not meaning to pun. “The halal market is so big, yet there aren’t many players around here. They saw the opportunity there to get a slice of it​.

From what I know, not many of our competitors are doing the same. But there is potential in doing this​.”

The business has a capacity of up to 40,000 pieces a day at its plant in the small town of Jeniang, which operates new machines. While retail sales have been heading south, Nani’s has seen growth in its manufacturing due to the Japanese OEM deal.

We like to promote more on our manufacturing capabilities and halal products now. We have seen a lot of interest in halal products, even companies wanting to put the halal logo on their donuts. We are keen to collaborate with that​,” Wani added.

At the same time, to account for increasingly health-aware Malaysians, the company has been promoting its healthier products, though these are not new for the company, which was founded in the mid-Nineties.

All our products we produce using fresh ingredients, and we don’t use additives or preservatives​,” Wani said.

We are marketing products like our mochi and steam buns to health-conscious consumers. We had them before but we weren’t promoting them like this until now, with the market being into more health-conscious things​.”

With production going strong there is still capacity left for the company’s latest initiative: expanding its own market into Saudi Arabia, having last week taken an order from a customer there to send a trial shipment of Nani-branded products there.

Now Malaysia will have another brand in the Saudi retail market, so I hope that goes well for us. We have a trial order of around 100 cartons, but we project it will go to a container in one or two months. It will hopefully open up new GCC markets for us​,” Wani said.

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