AEON, Malaysia - MyGFSI · Malaysia is a multi-ethnic, multicultural and multilingual society with...

The Global Food Safety Initiative is managed by The Consumer Goods Forum 1

CONTENTS

The Global Markets Programme 2

This case study… 3

Overview: Malaysian food industry, retailers and food safety 3

Who does what, and why? 3

What has happened so far? 6

Key learnings 7

Supplier case study: Wide Tropism Trading Sdn Bhd. 8

AEON, Malaysia


• An unaccredited entry point for small or less developed businesses that aspire to achieve certification, improve their market access or both.

• Considers both primary production and manufacturing.

• Capacity building in food safety is achieved.

• Access to local markets is facilitated.

• A system for mutual acceptance at this “entrance level.”

• Unaccredited, so is not a scheme or a standard.

If you are new to the Global Markets Programme, there is more information available at mygfsi.com

The Global Market Programme

GLOBAL MARKETS PROGRAMME: Case Study

AEON, Malaysia

http://www.mygfsi.com/market-access/global-markets-programme/overview.html





AEON, Malaysia

Overview: Malaysian food industry, retailers and food safety Malaysia is a multi-ethnic, multicultural and multilingual society with a population of 30,000,000. It is a competitive, middle income country, with low unemployment. The food processing industry is predominantly Malaysian owned and dominated by small and medium scale companies. The bulk of retail food sales are still channelled through traditional stores. In 2012, they had 60% of food sales while Supermarkets had 43%.

The legal framework for food safety in Malaysia is the Food Act 1983. Their regulatory effort is in line with the global trend for shifting from a focus on testing finished products towards a process based approach stressing the importance of quality management systems.

The leading national body responsible for delivering change is the Food Safety and Nutrition Council which brings together stakeholders to find a shared approach. They operate within a national food safety policy that seeks an integrated, science based approach that aims to build capacity, traceability and transparency.

This case study…

It will tell you about an ongoing project that started in Malaysia in 2013. You will read about how the Japanese retailer Aeon in a public-private partnership with UNIDO has used the Global Markets Programme as a capacity building tool to support the entry of new local suppliers into their supply chains. You will also find out how on conclusion of the project it became nationalised and in future will be coordinated by the Ministry of Health.

Who does what, and why? Implementation of the Global Markets Programme can be done individually by a single company. The information is free, service providers for assessment and training are available and there are many buying companies who would recognise and respect such an achievement. However, the Programme has mostly been introduced in collaborative public-private coalitions of organisations with shared aims. This has helped to overcome barriers such as funding, regulatory recognition and market

access. In January 2013 the Malaysian public-private partnership the “Sustainable Supplier Development Program” was formed. Its first objective was to implement food safety management systems that may lead to future certification. Their longer term aim was to nationalise the programme, working with the Ministry of Health. In February 2015, it has been confirmed that the future coordination of the Programme shall be by the Ministry of Health, Malaysia. As a result, all retailers in Malaysia will be participating.



AEON, Malaysia

• The Buying Company Aeon, Japan’s #1 retailer, entered the Malaysian market in 1984 and now has 29 shopping malls and four neighbourhood MaxValu Supermarkets. An early priority for them was to develop a network of local suppliers for their private label offer. Most manufacturers in Malaysia can be categorised as “small and/or less developed businesses.” When it comes to food safety, this means that because of their size, their lack of technical expertise and their economic resources they will encounter difficulties in implementing HACCP. As an active member of the Global Food Safety Initiative, Aeon had been involved in the development of the Global Markets Programme so were keen to put the concept of the “pathway to certification and market access” to the test. Their contribution was US$100,000. Their role was to work with their suppliers on product specifications, the logistics of supply and to deliver the actual assessments. • The International Organisation The United Nations Industrial Development Organisation (UNIDO) has a mission to promote and accelerate inclusive and sustainable industrial development. In particular, they aspire to reducing poverty, creating inclusive globalisation and building environmental sustainability.

They have already been involved in public-private partnerships for the Global Markets Programme with the international retailer METRO Group in Russia and with the Consumer Goods Council for South Africa in Zambia. Their contribution was US$500,000. Their role was to identify, recruit and pay for food safety specialists who would help with the capacity development at the suppliers. • The Malaysian Government SME Corp is a government agency dedicated to developing small and medium enterprises. Their aim was to establish a business model for food safety improvement that would be relevant to small and medium enterprises. Their role was to help introduce potential food manufacturers to Aeon and to provide financial assistance for the process of personal development and the achievement of compliance with the relevant food safety requirements. There has also been support and help from:

• The Ministry of Health - delivered local coordination with government employees.

• The Ministry of Education - provided a linkage with local Universities to place food safety graduates as interns into selective factories.

• The Department of Islamic Development - ensured a match with Halal food integrity issues.



AEON, Malaysia

• The Mentoring Provider UNIPEQ, a local contractor appointed by UNIDO, works together with industry and government agencies to continuously improve the quality and safety of food. Their business activities include laboratory analytical services, consultancy and training. Their role was originally to support the delivery of the assessment process and deliver capacity building through training and mentoring. As the project developed and the importance of a consistent assessment process was identified, UNIPEQ took the lead on all training and mentoring.

• The Suppliers The pilot programme started with 25 suppliers, involved in various types of grocery manufacturing including dairy, frozen, bakery, cooking oil and chocolate as well as poultry processing.

For the purpose of analysis, there are three segments:

• 16 are in processing

• 6 are in packing

• 3 are in poultry

Employee numbers were normally less than 50 people. In 2014 the aim was to increase the number of participating suppliers up to 75.



AEON, Malaysia

What has happened so far? Good progress towards compliance at Basic level has been achieved in processing and packing. In the poultry segment, progress has been slower driven by a lack of technical capacity and absence of food safety systems.



AEON, Malaysia

Key learnings

1. The close involvement with the Ministry of Health resulted in the Programme becoming nationalised in 2015. Now there is the potential for further adoption across Southeast Asia, thus facilitating regional trade as well as improving food safety management systems.

2. The frequency of assessment and mentoring needs to be relative to the needs of the Supplier. There will be some factories that need significantly more help than others.

3.The calibration and consistency of assessors is of fundamental importance. This should be done initially through training and subsequently through non-conformance workshops where they collectively review their decisions based on actual experiences.

4. In the first assessments there were two teams, one from Aeon and the other from UNIPEQ. Differences between these teams meant an inconsistent measurement of compliance. Once this was recognised, Aeon undertook all assessments while UNIPEQ undertook all training and mentoring.

5. The Intern Program with CUIC (Center of University – Industry Collaboration, Ministry of Education) provided a ‘win-win’ for the factories and individuals.

The factories got the support to develop their document systems, the graduates got real practical experience in the development of a process for food safety management that helped them to progress in their careers. In addition, the factories with interns clearly outperformed those without. This program has now been formalised.

6.The minimum period for the initial pilot should be six months to allow the development and implementation of a food safety system. When moving from Basic to Intermediate, most suppliers found the elements relating to traceability and hazard analysis took more than three months to implement. Six months is also required for this period of transition.

7. Challenges at Basic level: a. Food hazards control, including

allergens - the biggest challenge at Intermediate level due to capability, knowledge and time pressure.

b. Infrastructure - premises layout, conditions of buildings, process flow.

c. Lack of technical capability - key personnel without technical background in food science.

d. Documentation - incomplete systems, minimum documents available at start.

e. Time limitation - delay of mentoring for any reason leads directly to slippage on next steps.



AEON, Malaysia

Supplier case study: Wide Tropism Trading Sdn Bhd.

“This program has helped our operation to be more hygienic and systematic. Now all of our employees have a guideline for their work and rules to follow. They know clearly what their job scopes are and what they should and should not be doing. This means that our operations have become smoother with the result that we are more efficient. We’ve also managed to put traceability in place which is can be a real bonus when you are trying to find out about a particular issue. Our raw material suppliers are more careful to get things right for us because we are looking at the quality of their products more strictly and with more knowledge. The benefits of all of this are for our customers and I believe that they have more confidence in our company. With the standard operation procedures that we now have in place we are more confident about telling our customers that we can deliver.” Samantha Mah, Marketing Manager, Wide Tropism

Wide Tropism is a specialist importer, manufacturer, wholesaler, distributor and food trading company for condiments, ground nuts, and dried fruit. They have developed their own organic brand. There are 13 employees. They found out about the programme, applied to join and where accepted. Once they had achieved their Basic level, they started to supply Aeon in early 2014. Now they are working towards achieving their Intermediate level. On their first assessment, as with most of the 25 companies involved in the pilot, they were found to have a lack of documentation such as procedures, records and checklist. There was no member of the team concentrating on technical. However, the assessor concluded that they would be

likely to be able to comply with the Basic level requirements provided there is some commitment from the owner. Working closely with their consultant, Mr Prabhu from UNIPEQ, during 2013, they achieved Basic level. During 2014, with the ongoing support of both UNIPEQ and AEON they have been working towards Intermediate level. They described their main difficulty as being the number of different pieces of new work that had to be completed and implemented together. This meant they need to assign one person to look after the programme. The outcome of their investment in their systems for food safety management has had a significant knock-on effect on their day-to-day operations.



AEON, Malaysia

IMPROVEMENT

Better cleaning utensils

Specific area protective clothing

Improved labelling for raw materials

Photographs from various suppliers involved in the pilot project

AEON, Malaysia - MyGFSI · Malaysia is a multi-ethnic, multicultural and multilingual society with...

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