Malaysian biotechnology industry expected to grow by revenue at an average rate of 15 percent per year

Aug 25 2009

Malaysia's plans for its biotechnology sector remain ambitious even with the recent global meltdown. By 2020 the government envisages this sector will employ up to 160,000 people and will contribute to 5% of Malaysia's GDP.

The current economic crisis and it's impact on the Malaysian economy has highlighted the need for Malaysia to focus on the development of a sector that is diverse and downturn resilient like the biotechnology sector, that can help support an economy during economic downturns. The rich biodiversity, multi-ethnic population, lower cost, regulatory support and financial incentives, such as tax incentives and funding schemes, are Malaysia's favorable attributes in promoting the country as a biotechnology hub.

"The biotechnology industry in Malaysia is expected to grow by revenue at an average rate of 15 percent per year (CAGR). Healthcare revenue will experience the highest growth with CAGR of 20 percent, followed by agriculture 15 percent and industrial 10 percent. By the year 2013 the industry is expected to generate RM45 Billion in revenue," says Frost & Sullivan's Global Vice President for Pharmaceuticals, Ms. Rhenu Bhuller.

Biotechnology is expected to drive the economic corridors in further developing the healthcare sector. Malaysia has launched 5 Regional Economic Growth Corridors; i.e.: the Northern Corridor Economic Region (NCER), East Coast Economic Region (ECER), Sarawak Corridor of Renewable Energy (SCORE), Sabah Development Corridor (SDC) and Iskandar Malaysia. The corridors aim to encourage companies seeking new growth opportunities in the area of healthcare biotechnology and its implementation.

The Government and BiotechCorp is working towards meeting the challenges that the nascent Malaysian biotech industry faces in terms of technology - moving from lab based research to commercialisation, as well as meeting human resource needs. In the short term, these represent restraints for the sector, and programs like technology acquisition and transfer as well as educational needs are being looked into to meet these challenges.

BiotechCorp was established by the Malaysian government to support the development of Malaysian companies in the biotechnology space. One of Biotech Corp's key mandates is to facilitate the inflow of foreign capital into the sector. A key focus for BiotechCorp in moving forward is commercialisation. This may come in the form of technology transfer and licensing. This will ensure that rights of parties involved, including IP, are fully protected in collaborations and partnerships that seek to commercialise R&D.

"This is the time to strengthen the private-public sector partnership and scientific collaborations between Malaysian centres of excellence and global companies that could further grow the biotech business when things turn around," adds Bhuller.

The Malaysian biotech industry deal making remained brisk in 2008. It was also an active year in the Malaysian biotechnology industry with acquisitions and collaborations across all key areas. In the Industrial Biotechnology Sector, Enzyme Technology Sdn Bhd and Insect Biotech of Korea entered into a partnership to establish an industrial enzyme manufacturing facility in Malaysia. BiotechCorp acquired technology for the supercritical fluid extraction of natural substances that occur in plants from Dutch company, FeyeCon. Agricultural biotechnology saw the largest number of partnerships between local and foreign companies, ranging from Genome Technology to microbial research.

Hovid Berhad is another example of Malaysia's healthcare biotechnology success story. Starting out as a single product company in 1945, Hovid today has 12 global patents and a presence in 40 countries worldwide. The company set up another unit, Carotech Bhd. which commenced production in 1995 and has since successfully carved a niche to become a leading supplier of phytonutrients throughout the world, with the US, Europe, Japan and Australia making up the main markets. In January 2008, Hovid bought a controlling stake in Biodeal Pharmaceuticals. For the financial year ended June 30 last year, the company recorded RM214.7 million revenue and RM15.3 million net profit.

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