Supportive Village Needed

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It takes a village to raise a child,” says Datuk Iskandar Mizal Mahmood, CEO of Malaysian BioTech Corp (BioTech Corp), an agency under the Ministry of Science,Technology and Innovation (Mosti). This analogy was used to describe Malaysia’s biotechnology industry, which is still in its infancy. The children in this village are local biotechnology companies while the other inhabitants are Mosti, the policymakers of the National Biotechnology Policy, venture capitalists, universities, research institutes and, of course, BioTech Corp. Phase One of the National Biotechnology Policy started in 2005, focusing on capacity-building and the establishment of other important elements in the village, such as knowledge workers, legal framework, intellectual property (IP) protection, grants and funds, advisory councils and implementation agencies. However, with the economic slowdown, the government is focusing on stimulus plans, job retention and retraining the unemployed. In this scenario, biotech, with its long gestation period, could become sidelined. Iskandar is hoping that this does not happen to the industry. With this is mind, BioTech Corp gathered three Bio Nexus-status companies that are still confident of the future to share their thoughts with the media two weeks ago. Tan Kim Sing, managing director of Mesdaq Market-listed Sunzen Lifesciences, a company that specialises in livestock health products, says the demand is still there. “Sure, the cost of raw materials that has gone up will hurt our profit margins while people’s consumption of meat and eggs may be reduced, but it (demand) is still there. In terms of sales, we still did well last year,” he says. In fact, Tan is looking at regional expansion this year and has obtained registration for the company’s products to be sold in Indonesia. It is already exporting its products to South Korea and Taiwan. China will be its next target. Meanwhile, Success Nexus is betting on the future of clean technologies with non-edible oils as the raw material. Its executive chairman, Datuk Ramly Ahmad, shares the same positive outlook. He believes that the company has an advantage in the business of biodiesel production, a technology that has been used in Europe for the last 25 years, because the feedstocks used for biodiesel production, such as palm oil, palm fatty acid and other inedible oils, are readily available in Malaysia. “In Europe, they use edible oils which hinge on the food industry, such as soyabean and corn oil that not only cost more but also suffer during winter when there is no production. This is the beauty of Malaysia, where palm oil and its waste are produced every day of the year. There is no difference to the end-product whether you use inedible oil or edible oil. The cheaper the feedstock, the better,” says Ramly. Currently, Success Nexus has a fully operational mobile plant for biodiesel production, with a daily output capacity of 1.2 tonnes. It is working with Italian Engineering Company (IEC), an Italian company that specialises in biodiesel, to build a commercial plant in Lumut, which will have an annual production capacity of 90,000 tonnes. This plant is 25% completed and will be ready by the end of 1Q2010. “Our first oil production will start in the first half of 2010. IEC is going to buy 80% of our production for the next five years. It wanted 100% but I said no, 80% is enough. At 80%, I can still pay back the bank loan in 2½ years. Just recently, I had a Taiwanese company enquiring about 40,000 tonnes per month. That’s almost half of our yearly production. The point is, I have a lot of demand,” says Ramly. He also has plans to use the glycerol by-product from the company’s biodiesel production to make dicholohydrin, a main ingredient in bioplastics and polymers. Mosti has seen the potential in this area and is supportive of Ramly’s efforts. It awarded Success Nexus a RM3.3 million grant in August last year for the setting-up of a prototype mobile dichlorohydrin plant. Of this, RM1.25 million was used to buy the basic IP for the process from Italy. The rest of the money is being used to build on the IP to refine it into a process that converts glycerol into dicholohydrin. Ramly says the team of scientists who developed the basic IP is working on this with his engineers now, and that the IP that comes out of this will be shared with the Malaysian government. Derrick Khoo, CEO of Asiatic Centre for Genome Technology (ACGT),says the ministry and BioTech Corp have been very supportive of its biotechnology ventures too. “Our parent company, Genting Group Bhd, is a visionary. We have an excellent working relationship with BioTech Corp. We were granted Bio Nexus status in November 2006, but our lab operations started in December 2007. They have supported us without any results from us, with only our commitment. And I think we have exceeded that expectation,” he says. That expectation was to sequence the genomes of oil palm and jathropha. ACGT has formed a 50:50 joint venture for R&D with biotech company Synthetics Genomic Institute (SGI), started by Craig Venter. It also invested RM34.7 million in a 5% stake, which has since been diluted to 4.4%. Venter is known for his efforts to sequence the human genome. Genome sequencing involves the manipulation of genes; in this case, the genes of oil palm and jathropha to produce a superior seed with high oil yield, low fertilisation requirements and higher resistance to disease. The research is slated for completion by the end of this year. Highlighting the importance of this focus on palm oil, Khoo says, “Last year, Malaysia’s total export revenue for palm oil was RM60 billion. With this project, we will be able to improve the oil yield and oil composition to meet food and non-food demands.” ACGT has invested RM171 million to date, with RM50 million committed for this year and another RM50 million for 2010. Those are big numbers but then, biotech R&D is not for the faint-hearted, and there is no denying the immense potential in this field. The high-value proposition it offers makes it even more important that there is a supportive village for the local biotechnology industry.