“The Malaysian bioeconomy today is worth more than USD 4.4 billion (RM14 billion) and creates over 83,000 people. As you can see, bioeconomy is an important component in creating a more sustainable future where resources are used in the most efficient way. In 2020, Bioeconomy’s contribution towards Malaysia’s Gross Domestic Product (GDP) is targeted to contribute 8%-10% from the current 2%-3%”. To say this, in this long exclusive interview with Il Bioeconomista, is Zurina Che Dir, Senior Vice President Bioeconomy Development Division of the Malaysian Biotechnology Corporation. With Mrs. Zurina Che Dir we talk about bioeconomy in Malaysia, where “the Government has identified bioeconomy as one of the key strategic drivers to elevate the nation’s socio-economic development”.
Interview by Mario Bonaccorso
What is the state of the art of the bioeconomy in Malaysia?
To such an extent that many countries around the globe have launched and implemented its bioeconomy initiatives, the Malaysian government has the foresight on capitalising on its rich biodiversity and natural resources to develop the Bioeconomy Transformation Programme (BTP) as part of the nation’s economic transformation strategies. Announced by the Honourable Prime Minister in 2012, Malaysia has taken its early steps and is leading on the transition to a bio-based economy in the region. We were the second country in Asia and the first in ASEAN to do so by announcing a national Bioeconomy initiative.
The Malaysian bioeconomy today is worth more than USD 4.4 billion (RM14 billion) and creates over 83,000 people. As you can see, bioeconomy is an important component in creating a more sustainable future where resources are used in the most efficient way. In 2020, Bioeconomy’s contribution towards Malaysia’s Gross Domestic Product (GDP) is targeted to contribute 8%-10% from the current 2%-3%.
As the first country in Southeast Asia to launch a bioeconomy initiative, Malaysia is providing an effective and conducive platform for the bio-based industries to positively contribute to Malaysia’s sustainable development agenda, improve industry’s competitiveness, encourage public-private partnerships and bring socio-economic benefits to nation. Supported by public sector stakeholders such as universities and research centres, economic corridors, financial institutions and inter-ministerial coordination, Malaysia offers a world of possibilities for all participants throughout the bio-based value chains to create and develop commercial growth opportunities globally.
Spearheaded by the Malaysian Biotechnology Corporation (BiotechCorp), BTP will work towards the goal by accelerating Malaysia’s momentum into creating a conducive ecosystem that will attract foreign players. By doing this, the BTP will also secure the country’s passage to the ranks of high-income economies, and will contribute towards high Gross National Income (GNI) and job opportunities. The Bioeconomy agenda of the country is targeting investments amounting to USD 5 billion, creation of 160,000 new jobs and GNI contribution of USD 13.9 billion by 2020. The BTP is expected to promote a knowledge-based bioeconomy through the establishment of a sustainable ecosystem of R&D, commercialisation in the areas of agriculture, healthcare and industrial biotechnology and fostering public-private interactions in developing and exploring high impact opportunities. The benefits provided by BTP will support innovative companies, farmers and communities who are already working hard to boost the emerging bioeconomy.
BiotechCorp acts as the chief driver for bio-based industry development by providing strategic direction, operational assistance for businesses and developing specialised infrastructure. BiotechCorp also focuses on developing and enabling access to technologies via BioNexus Status companies and multinational companies and to link industrial value chains together, to achieve greater productivity and sustainable development. BiotechCorp intends to facilitate Malaysia’s transition from the old bio-based industry to a new bio-based industry, adding value through modern biotechnological techniques. BiotechCorp is working closely with the economic corridors and State development agencies to initiate collaborative biotechnology clusters for wealth creation and sharing the benefits of bioeconomy throughout the country.
The core strategies of Malaysia’s bioeconomy are through a complete value chain approach, and one of the core components we invest heavily is in developing the talent and entrepreneurship for the industry to thrive. Malaysia, through BiotechCorp, has also established strategic partnership and unique collaboration with institutions such as the San Francisco- based California Institute for Quantitative Bioscience (QB3) programme.
The QB3/Malaysia program offers promising Malaysian scientists the opportunity to expand their scientific training at QB3 and benefit from QB3’s entrepreneurial environment. To date, the programme has resulted in the formation of 2 spin-off companies, which have the option of operating at QB3’s research incubator space in the Bay Area. An aim of the new agreement between QB3 and Malaysia BiotechCorp is to provide a Malaysian Space, which would function as a research incubator located within the Mission Bay Area in close proximity to the University of California, San Francisco, and would be dedicated for Malaysian businesses to accelerate efforts in bringing scientific discoveries from bench to market. It would also offer Malaysian bio-entrepreneurs direct access to international capital and partnerships available and gain a solid foothold to directly enter the United States market in a capital-efficient manner.
How high are the investments realised by the government in this field?
The Malaysian Government has identified bioeconomy as one of the key strategic drivers to elevate the nation’s socio-economic development.
In order to bringing up bioeconomy to higher level, Our Prime Minister Dato’ Sri Mohd Najib Tun Razak announced an allocation of close to US$ 27 million (RM85 million) from the government for the Bioeconomy Transformation Programme (BTP) fund in effort to develop Bioeconomy agenda in Malaysia.
Verdezyne, one of the major industrial biotechnology firms will be investing nearly RM800 million in Malaysia, a clear demonstration of Malaysia’s on-going momentum in attracting bio-based investors. On the top of that, BiotechCorp had established links with the US biotech industry over the years and apart from Verdezyne, has also secured major investments by big global names such as GEVO, Biocon, Darden, CJ Bio, Arkema and others with a combined investments amounting to about USD 4.7 billion (RM14.8 billion).
Malaysia’s bio based industries in the biomedical space is also gaining strength and the country has successfully attracted international giants. Notable international biomedical industry players such as Biocon Ltd, Stelis Biopharma, and Haemonetics Corporation have established their regional hubs in Malaysia, further strengthening the biomedical ecosystem.
By 2015, Malaysia will be home to Asia’s largest integrated insulin production plant (Biocon Ltd) to serve global needs of diabetic patients for affordable insulin and insulin analogs. Meanwhile, Stelis Biopharma has invested in a next-generation biomanufacturing facility in Malaysia. American blood management solutions provider, Haemonetics Corporation has selected Malaysian as the first Asia-Pacific location for the establishment of their high tech medical devices manufacturing facility. Malaysia offers these investors proximity to customers in its fastest growing markets, ready access to technically skilled and educated workforce, as well as an advantageous cost position in a stable economy.
Which are the policies you have to boost the sector?
The National Biotechnology Policy (NBP) was launched in 2005 to oversee this emerging sector, and the Malaysian Biotechnology Corporation Sdn Bhd (BiotechCorp) was set up as a dedicated agency to drive its development. NBP consists of three phases including Capacity Building (2005-2010), Science to Business (2011-2015) and Global Business (2016-2020). Now, in the second phase of the NBP, BiotechCorp is promoting the transition of Science to Business by providing a facilitative environment for the private sector to drive the nation’s bioeconomy. This is encapsulated in the Bioeconomy Transformation Programme, launched in October 2012.
BTP implementation envisaged to boost up national development through breakthrough in agricultural productivity, discoveries in healthcare and the adoption of sustainable industrial processes. Aimed at encouraging greater private sector participation in developing a bioeconomy, the programme is estimated to result in an increased Gross National Income (GNI) nearly USD 13.9 billion (RM43 billion) by the year 2020, the creation of 160,000 high-quality job opportunities, and the cumulative attraction of USD 5 billion (RM15 billion) in foreign and domestic direct investments, largely to be privately sourced. This estimation is made based on the current bioeconomy and pipeline projects added with on-going engagement with private sector involvement over the period of 2013-2020.
How strategic is the presence of biomass in your country?
Malaysia, being one of the world’s 17 megadiverse countries, has a rich source of biodiversity to tap into in support of a bioeconomy. Agriculture sector in Malaysia generates about 12% of GNI. In the process of creating this value, a significant amount of biomass is generated every year across a variety of crops such as palm oil, rubber and rice. Within this sector, by far the largest contributor to GNI is palm oil, not to mention Malaysia is the world’s second largest producer and exporter of palm oil, contributing about 8% or almost USD 25.5 billion (RM 80 billion) to the national income. Assessing the enormous opportunity in agri-biomass, the National Biomass Strategy 2020 (NBS 2020) was launched in November 2011 with a focus on palm oil biomass as a starting point. Vast majority of palm oil biomass is returned back to the field as organic fertiliser to replenish and provide nutrients to the soil. While the opportunity is immense, palm oil biomass is also utilized for a variety of additional higher value uses including wood products, energy pellets, bioenergy, biofuel and bio-based chemicals (sourced from Agensi Inovasi Malaysia).
Leveraging on the existing strength of one of the country’s most robust sector, the Malaysian palm oil industry is positioned to be a major player in the BTP initiative. The palm oil sector has the capability to produce significant amounts of biomass, extracted from the tree trunks, empty fruit bunches (EFB) and fronds. Through strategic partnerships and collaborations, palm oil industry players can profit from its biomass resources by moving it up the value chain through processing into value added products in order to extract the maximum benefits from it. The range of products from oil palm biomass is vast; from liquid bio-fuels to biochemicals, food applications and cosmetics. The challenge would be to make Malaysia attractive to foreign chemical technology companies to come and invest in the country.
What kind of biomass do you have in Malaysia?
By year 2020, Malaysia’s palm oil industry is expected to generate about 100 million dry tonnes of biomass. This includes empty fruit bunches (EFB), mesocarp fibres (MF) and palm kernel shells (PKS) as well as oil palm fronds and trunks. Moreover, the dynamic potentials of biomass brought up various industries besides oil palm from the utilisation of renewable organic matters including timber waste, paddy waste, coconut trunk fibre, sugarcane waste, kenaf fibre and many others.
From your point of view, how is the bioeconomy in Europe, US, South America and Asia? How is the competitiveness in this world? And how important is the logistics to develop the bioeconomy?
The Organisation for Economic Cooperation and Development (OECD) has estimated that by 2030, the global bioeconomy will contribute an average of 2.7% to the world’s Gross Domestic Product (GDP). Recognising the significance of the bioeconomy to national growth and strength, major world economies such as the United States, the European Union, Canada, China, Australia, Finland and Russia have embarked on national bioeconomy strategies and policies that offer attractive incentives along with programmes and significant investments to boost the sector. European Union as the first international organisation to put forward bio-economic strategies and policies.
At 6th position among 189 economies in the latest World Bank Doing Business Report 2014, Malaysia has been placed in the same league as developed nations. From being 18th in 2012 to the 12th position in 2013 and recently 6th for 2014, the ranking reflects real improvements made to facilitate business and investments in Malaysia.
The Malaysian Government has provided strong support and commitment to bio-based industries through pro-business policies, infrastructure building and Human Resource Development (HRD). Besides providing attractive commercial incentives, the Government has also invested extensively in building infrastructure, logistics and technology to bring the industry on par with advanced economies.