Halal Guide

Own Brand, OEM Factory or Repackaging: Who Applies?

OEM factory contracts, brand owner responsibilities, and the risks of repacking and certificate scope.

Last reviewed 5 November 2026

Many PKS (small and medium enterprise) operators do not own a factory. They develop a recipe and a brand, then hire an OEM factory to cook, fill bottles or pack. This model can reduce investment in machinery, but the halal risk does not disappear just because production is handed to another party.

Before signing an OEM contract

Make sure the manufacturer holds a valid SPHM (Sijil Pengesahan Halal Malaysia, the Malaysia Halal Certificate) under the Pengilangan Kontrak/OEM (Contract Manufacturing/OEM) scheme and a suitable scope of activities. The 2026 amendment to the MPPHM (Manual Prosedur Pensijilan Halal Malaysia, the Malaysia Halal Certification Procedure Manual) states that a party carrying out contract manufacturing must obtain an SPHM under the OEM scheme before it is eligible to offer that service, and an applicant who uses an OEM must first make sure that the manufacturer holds an OEM scheme SPHM.

Also check the actual place of production, whether work is passed on to subcontractors, who buys the ingredients, who keeps the lot records, who handles complaints and who has the right to use the artwork/brand. The certification status of the final product and the applying party must be confirmed for the actual contract arrangement; do not rely on a single copy of a certificate without checking its scope.

Responsibility chart

OEM responsibility chartThe brand owner sets the specification and recipe, then checks the OEM SPHM and the manufacturer contract. If the manufacturer and scope do not meet the requirements, find a manufacturer or correct the certification scope. If they do, specify the product certificate holder, ingredients and artwork. The OEM factory then buys or receives ingredients and produces the batch, followed by testing, documentation and product release, distribution by the brand, and joint complaint and recall management.NoYes

Brand owner sets the specification and recipe

Check the OEM SPHM and manufacturer contract

Manufacturer and scope meet the requirements?

Find a manufacturer or correct the certification scope

Specify the product certificate holder, ingredients and artwork

OEM factory buys/receives ingredients and produces the batch

Testing, documentation and product release

Distribution by the brand

Joint complaint/recall management
OEM responsibility chart

Ten things to state in the contract

  1. The entity and address of the production factory.
  2. The OEM halal scheme/certificate and validity checks.
  3. Product type and identity, SKU and formulation.
  4. Authority to change raw materials/suppliers.
  5. The right to approve labels and use of the halal logo.
  6. Access to raw material certificates, documents and audits.
  7. The method for lot numbers, batch records, samples and product release.
  8. Handling of waste, damaged products and returned products.
  9. Mechanisms for complaints, recalls and the cost of failures.
  10. Reporting of changes to the factory, process, certificate status and contract termination.

What about repackaging?

Buying 25 kg of chilli powder and dividing it into 100 g packets is a handling/repackaging activity, not merely a retail activity. The premises are still subject to KKM (Ministry of Health) food registration where relevant. The source of the original product, the risk of mixing, hygiene, labels and the scope of the halal application need to be confirmed. Do not assume that a bulk supplier's halal certificate allows the halal logo to be transferred automatically to the new packets.

Your action: complete templat-semak-oem.csv before paying the OEM deposit. Every change of manufacturer, or production at other premises, must be reassessed.

Official sources and editorial notes

Note: This ManaHalal article is an educational guide, not a verification, approval letter or official JAKIM service. It was prepared based on sources reviewed on 5 November 2026. Check the latest official circulars and decisions of JAKIM/MAIN/JAIN (Majlis/Jabatan Agama Islam Negeri, the state Islamic religious councils and departments) and KKM/PBT (local authority) legislation before acting. Special requirements may apply depending on the product, state and production model.