Bioeconomy In Malaysia: From Inception to Global Player
INTRODUCTION
Fundamentally, Bioeconomy can be explained as the methodology of substituting the use of potentially finite and non-renewable resources with renewable resources, and is explored as a means of creating a sustainable economy.
However, Bioeconomy as a subject of discussion is complicated by variances of definitions. For instance, the White House Bioeconomy Blueprint’s definition has an utilitarian outlook, which focuses on its potential for public benefit; in which advancement on biological sciences can bring about. This lens sees Bioeconomy as a means for advancing the quality of life through substituting the use of potentially finite resources, rather than seeing it as an end in itself.
Meanwhile, the European Commission views Bioeconomy through a lens of insecurity, in which the subject is defined as an initiative to reduce humanity’s dependence on natural resources and to promote sustainable production from land, aquaculture, and fisheries; and their conversion to food, feed, fibre, bioenergy and bio-based-products, growing new jobs and industries.
Despite its divergence, the concept has repeatedly been painted with a sense of urgency and importance.
Being a relatively fresh concept in Malaysia, the first venture that the country did was to launch the National Bioeconomy Policy (NBP) in the year 2005, where renewable biological resources are converted into energy, food, livestock feed, healthcare wellness products, and chemicals via innovative technologies.
As a continuation, the Malaysian government swiftly launched the National Bioeconomy Programme 5 years later, becoming the first ever country in Southeast Asia, and the second Asian country to embrace the concept of Bioeconomy.
As part of the 2005 National Bioeconomy Policy (NBP), Agriculture Bioeconomy is identified as one of the focus areas; while also having identified critical areas for bio-business development, including government intervention and commitment, human capital development, R&D and technology acquisition, financial infrastructure, and legislative and regulatory framework.
Bioeconomy contributed around 106.7 billion Malaysian Ringgit (25.4 billion USD), or 13.4% of Malaysia’s Gross Domestic Product (GDP) in the year 2010; the value of which encompasses economic impact of various sectors that greatly benefited from the application of bio-based technology, such as agriculture, chemical production, and processing of fat and oil.
The domestic bioeconomy sector is projected to grow from 150 billion Malaysian Ringgit (35.7 billion USD) in 2020 to 181.2 billion Malaysian Ringgit (43.1 billion USD) in 2030, with a growth rate of 15% per annum.
BIOECONOMY BODIES IN MALAYSIA
Appointed the lead ministry, the Ministry Of Science, Technology, and Innovation (MOSTI) serves to enhance the domestic bioeconomy movement, spanning more than 10 derived organisations and agencies involved in biotechnology R&D, commercialisation, bio-business facilitation, industry standard development, project financing, and incubator/accelerator services.
IMPACT IN MALAYSIA
Paddy Industry
Being the staple food for Malaysians, and the 3rd most important domestic crop in terms of land usage, more than 2.4 million tonnes of paddies is produced annually, which converts to around 1.7 million tons of rice.
The paddy industry had experienced radical transformation from the early traditional practice from the 1950s, with the application of innovation and technologies increasing both the quality and productivity of rice.
With a gene bank holding over 15,000 entries consisting of traditional paddy seedlings, types by MARDI (Malaysia Agricultural Research and Development Institute), and varieties from abroad, MARDI is constantly looking to develop new varieties; with the diverse rice genetic resources enabling production of quality rice, and ensured supplies of paddy seeds to constantly meet the needs of farmers.
More than 90% of 350,000 hectares of paddy fields in Malaysia utilises paddy varieties produced by MARDI, almost all of which are produced by farmers through the technologies and methods introduced by MARDI. Through MARDI’s technology, the average yield of 2.50 tons per hectare in 1970 has been raised to 3.60 tons per hectare in 2010, and subsequently 4.60 tons in 2019.
Many farmers are capable of reaching the production quota of 12 tons per hectare, and netting a monthly salary of more than 2000.00 Malaysian Ringgit (around 476 USD) per month from paddy cultivation activities alone, and returns of the paddy industry towards the national economy is estimated to be more than 15 billion Malaysian Ringgit (around 3.5 billion USD) per annum.
Coconut Industry
Despite being one of the oldest agriculture-based industries in Malaysia, the coconut serves as the 4th most important domestic crop in terms of land usage, and serves as one of the traditional smallholder crops; carrying the weight of around 100,000 families as their main source of income.
MARDI has developed 6 varieties of hybrid coconuts capable of producing 25,000 coconuts per annum, a great advancement of progress when compared to Malaysia’s tall coconuts, which produces 7,000 coconuts per annum. The results from MARDI’s technology projects to be capable of boosting coconut production countrywide by more than 25 million nuts by 2029.
With the development of new coconut varieties, MARDI aims to reduce imports from neighbouring countries, which in turn further drives the economic value of the domestic agriculture sector up.
The domestic coconut industry is at a projected value at more than 650 million Malaysian Ringgit (around 152 million USD) per annum.
Fruits Industry
Being the essential commodity that nets the country income through the export market, the fruit market had reached more than 700 million Malaysian Ringgit (around 1.6 million USD) in 2020, with main markets being China and Singapore.
MARDI aims to increase fruit quality and productivity through research activities that establish an efficient and effective production system, along with systematic post-harvest handling. MARDI’s research also covers the development of new fruit varieties up to post-harvest handling for the export market.
As an example, more than 60% of 13,200 hectare of pineapple farms in Malaysia are planted with the MARDI produced Josephine pineapple variety, a significant export commodity to countries such as the United Arab Emirates, and Hong Kong. At the same time, the Exotica papaya, another production of MARDI, contributed more than 70% of the domestic papaya export value.
Fruit production that is based on MARDI’s technology is estimated to account for more than 30%, amounting to more than 650,000 tons and valued at more than 1.32 billion Malaysian Ringgit around 287 million USD).
Vegetables Industry
MARDI has dedicated efforts into R&D with the purpose of producing vegetable production technologies that can keep up with Malaysia’s climate; of which is achieved through methods both traditional and modern: Selection, Performance Evaluation, and Quality Improvement.
The current main focus is in researching tissue culture with the aim to improve production, and both the pre-harvest and post-harvest management for local and export markets; of which also includes research on efficiency improvement through agricultural inputs (productivity measure based on market value).
MARDI had also developed a vegetable production system under vertical farming, urban farming, and rain protection structure; such as plant factories, and mobile plant factories.
The technology contribution to the domestic vegetable industry is estimated at more than 100 million Malaysian Ringgit (around 21 million USD) per annum.
Tuber Industry
A label for the essential industry, which covers the sweet potato and cassava; both of which are widely consumed and cultivated across the globe as an annual crop, especially tropical and subtropical regions.
Based on their research findings, MARDI had developed many variants of sweet potatoes and cassava used as raw materials for the snack processing industry, such as chips and traditional cakes.
The sweet potato and cassava produced through MARDI’s technology had increased the income of farmers to more than 30 thousand Malaysian Ringgit (around 7142 USD) per season.
The value of the domestic tuber industry is estimated at more than 100 million Malaysian Ringgit (around 21 million USD) per annum.
Livestock Industry
As the main source of protein that holds up the entire country, research regarding the livestock industry carries the expectations of increasing the livestock quantity, which in turn translates into meat provision for the people. This includes quality livestock production through livestock care systems, and feed systems suitable for Malaysia's environment.
As part of their research, MARDI dedicated efforts to convert biowaste, such as oil palm kernel residue and oil palm fronds, into quality livestock feed.
MARDI had also commercialised its Omega-3 eggs to a local company, LTKM Berhad, gradually growing into the pioneer of the domestic Omega-3 eggs production market.
Through great lengths of research, MARDI accumulated a great portfolio of successful crossbreeds; such as cattles, goats, and chickens, all of which greatly contributed to the increase of both farmers’ income and meat production.
Kedah-Kelantan Elite Cattle
The Kedah-Kelantan (KK) cattle is an original crossbreed by MARDI. With a small and compact body, the Kedah-Kelantan is an all-rounded breed favoured by small local farmers and breeders, due to its small and compact body size and low maintenance requirements.
Seeking further improvements on the original, MARDI’s research led to the refinement of the KK breed through selective feed choice and breeding, known locally as the “KK Elit”.
The Kedah-Kelantan Elite cattle seeks to break traditional livestock cattle limitations, such as live weight gain as great as 350~800 grams per day, and capable of reaching the maximum weight of 500 kilograms. It has a gestation period of 90%, with mortality rates brought down to a mere 2%.
Brakmas Cattle
A cross between Kedah-Kelantan cattle and Brahman attempted in 1999 through intensive R&D, of which produced offspring of superior quality, which greatly improved upon Kedah-Kelantan purebred cattle’s low growth rate.
At the age of 2, cattles of this breed are capable of reaching 300~350 kg in weight. The Brakmas Cattle also possesses a strong immune system, which is especially resistant against diseases and parasites.
The Brakmas Cattle has a low upkeep cost, and strives especially well in palm oil mills.
Charoke Cattle
A cross between Kedah-Kelantan cattle and Charloais cattle, with attempts tracing back to the year 1970. This new variant seeks to combine the Charloais cattle’s efficient feedlot gains, growth ability, ease of calving, and superior live weight gain to improve upon the preexisting genetic qualities of the Kedah-Kelantan Cattle.
The Charoke Cattle is known amongst small breeders and farmers as “lembu baka ”, a local terminology referring to breeds that can live with Malaysia’s climate.
Katjang Boer Goat
A cross undertaken by MARDI through breeding male Katjang goats (Malaysia) with female Boer goats (South Africa), resulting in a semi-large hybrid, capable of maximising land usage, while reducing feed costs; which in turn is capable of meeting the domestic demand for mutton, while increasing the income of farmers.
The breed has a 93% gestation rate, and 42% of producing twin offspring, with mortality rates dropping to as low as 6~8%.
Village Chicken
Affectionately referred to as “Ayam Kampung” by the locals, of which produces meat generally of a higher commercial price and quality compared to commercial breeds, but greatly stunted performance as an egg producer due to the breed’s tendency to broodiness.
MARDI’s research seeks to preserve the best qualities of the village chicken, namely the superior meat quality and low upkeep cost through traditional free range production, while seeking to improve on inferior aspects such as low egg productivity, and high mortality rates due to low immunity against viral avian diseases.
This is achieved through selectively breeding multiple local village chicken breeds through at multiple stages, which allows the inheriting of more desirable traits onto the offspring.
CHALLENGES FACED BY LOCAL FARMERS
Throughout its existence, MARDI has been providing cost-effective and efficient solutions through innovative and technological approaches to the target group consisting of farmers, breeders, and entrepreneurs.
One of the greatest challenges faced by the target group surrounds the topic of designing machinery and mechanisation tools with local characteristics. Automation & mechanisation is recognised as an important requirement for the agricultural sector, as it not only reduces dependency on manual labour, but also produces products of better quality and maintaining farm management efficiency.
To that end, MARDI has been working closely with the target group to produce automation and mechanisation technologies of original design, capable of doubling productivity and improving the quality of products circulating the market.
MARDI has also modified many existing machinery tools from abroad with the purpose of better suiting Malaysia's environment and plantation system; while also developed original designs to better cater to the large portion of the farmer population, who operate on a small medium scale basis.
In general, the improvement of agricultural technology has greatly improved productivity, and thus increasing the national income and socio-economy of farmers. For example, more than 50,000 tons of paddy lost during the process of harvesting, transporting to processing and manufacturing plants can be salvaged with MARDI’s research, reclaiming lost value worth more than 750 million Malaysian Ringgit (around 177 million USD) per annum.
Another prevalent issue that MARDI took upon to solve is in response to problematic soil quality. To date, there are over 2.5 million hectares of problematic soil in Malaysia, which includes but not limited to land-mines, land contaminated with sulfuric acid, and peat-land. These lands are only capable of producing infertile crops, and poor quality yields.
Among the solutions MARDI proposed involves the utilisation of both organic matter and fertilisers, which serves to improve the physical condition of the soil; along with the use of machinery tools suitable to work within the area.
New Technology Development
As MARDI resumes with developing novel technologies to foster the domestic bioeconomy development, the following are successful cases ready to be commercialised:
Nitro Humic Acid (NHA): Alternative source of Humic Acid
Long utilised as a chelating ingredient in liquid fertiliser formulations and soil conditioners, Humic Acid is well known by those within the industry as the means of improving soil fertility, increasing plant nutrient absorption, stimulating soil biological activity, and increasing soil water holding capacity.
Nitro Humic Acid (NHA), a biochemically active macro-molecule with high molecular weight similar to Humic Acid, is derived from lignite coal. It is discovered that NHA is capable of increasing crop yield through boosting enzymatic activity, which increases the foliage’s photosynthetic efficiency.
Malaysia has not been known to produce neither Humic Acid nor NHA in any capacity, and its discovery is timely as a solution towards calcium deficiency faced by crops such as tomato and capsicum (Blossom-End Rot, BER), chilli (fruit end rot), lettuce (leaf burn), cabbage (internal rot), and mango (fruit heart rot and fruit split).
At the same time, the utilisation of NHA has yielded positive effects in improving saline-alkali soil, and continuous use can restore saline-alkali land back to fertile. It may also boost fruit firmness, hence more resistant to fruit bruising, which is a prevalent issue that causes loss in revenue.
The potential domestic market is estimated at around 3 million Malaysian Ringgit (around 600,000 USD), and approximately 30 million Malaysian Ringgit (around 6 million USD) at global markets.
Health Supplement from Terung Asam
Terung Asam- Otherwise known as the Indian Nightshade, is a plant that can be found in the wild, and is of great interest for botanists.
While crowned the name “Golden Vegetable”, the Terung Asam remains a largely underutilised crop in Malaysia. Containing high levels of natural phytochemicals, which is largely beneficial to combating obesity, MARDI provided a standard manufacturing approach and formulation for producing health supplement products.
The potential domestic market is estimated at around 5 million Malaysian Ringgit (around 1.08 million USD), and approximately 50 million Malaysian Ringgit (around 10.8 million USD) at global markets.
Just Great Drink: Health Product from Agriculture
The health benefits of flavonoids, also known as plant antioxidants, is determined by bioavailability, which contributes to health benefits. For humans, flavonoids appear to be absorbed by the stomach and small intestines at very modest levels, which unfortunately take 5 to 24 hours after intake. Flavonoid absorption can also be reduced as it comes into contact with dietary matrices, such as protein and lipid.
To tackle the issue, MARDI developed Just Great, a juice that consists of tropical fruits, edible enzymes, and honey, with high concentration of free phenolic acids. This supplement has the capability to boost antioxidant enzymes, lower cholesterol, and keep white blood cells and liver enzymes in check.
The potential domestic market is estimated at around 3 million Malaysian Ringgit (around 600,000 USD), and approximately 10 million Malaysian Ringgit (around 2 million USD) at global markets.
GROWPINE: Slow Release Fertiliser
In traditional methods, three to four times of pineapple fertilisers is applied with each cropping cycle to suit the need of varied types and plant growth needs. Leached fertilisers in the soil, and labour issues remain as typical occurrences in the industry.
To that end, MARDI developed GROWPINE, a controlled-release nugget sized fertiliser. It is one-time use only, during the plantation phase, and is capable of assuring fertilisation without wastage or nutrient shortage.
Suitable for high density pineapple plantation systems, it is a valid option to reduce labour in fertiliser application, while also preventing the fertiliser from leaching into the soil.
The potential domestic market is estimated at around 20 million Malaysian Ringgit (around 4 million USD), and approximately 30 million Malaysian Ringgit (around 6 million USD) at global markets.
FUTURE ROADMAP
With the government driving the sector in full force, this current trend serves as a huge impetus for those involved in the area.
Use of biomass, herbal, cosmetic and wellness products
Aquaculture
Agriculture transformation through molecular and conventional breeding
Halal food and pharmaceutical ingredients
Stem cell research & therapies
Bioinformatics
Next-generation sequencing services
As Malaysia has implemented all the biosafety regulations in place, outstanding projects with high commercialization value could be identified and brought for contained commercial production through excellent facilities present in most universities, which also possesses the expertise required to bring these projects to commercialisation.
Malaysia also remains a great destination for foreign expansion and manufacturing activities, as operation costs are competitive, and the government incentives offered are largely considerable. These are the foreign bioeconomy companies with businesses in Malaysia to date:
Mitsui, Japan
Verdezyne and Glycos, USA
Arkema and Metabolic Explorer, France
CJ Bio, South Korea
AJ Pharma, Saudi Arabia
Biocon, India
While Malaysia had successfully established its initial footprints in the global bioeconomy ecosystem, it remains a tall order for Malaysia to step up and achieve its targets.
Innovation is key due to the potential, need, and impact of affordable biotechnologies on a society like Malaysia.
In the hype for biotechnology development, Malaysia currently suffers from a loose definition of biotechnology, where a rush is presented for many companies to grab the low-hanging fruits, and are not strictly involved in the real bio businesses. The system suffers from the following bottlenecks and weaknesses:
Insufficient Biotechnology R&D
It is known that biotechnology has a long gestation period, and funding must remain continuous until the research achieves commercial maturity. The appetite for basic research is diluted in the pursuit of companies rushing premature products into the market.
Meanwhile, the present research priorities for Malaysia’s bioeconomy ecosystem follow the trend of funding mechanisms, and priorities shift to where funding is available.
And with the current economic downturn on a global level, the government has made the decision to reduce the national budget for the bioeconomy sector.
Political Interests & Chase For University Ranking
Appointment of bioeconomy companies is politically based for top positions at government agencies and research institutes.
As an indirect result, there is an ongoing competition between local universities for rankings through academic publications, which greatly dilutes industry engagement.
Furthermore, the Malaysian bioeconomy sector deals with duplication issues, as there is minimal collaboration between all local research institutes and universities.
Mismatch Of Talent Development And Market Needs
There is a lack of understanding in regards to the value chain of commercialisation by the local research community.
Many local researchers remain unaware of technology transfer procedures, market validation, IP issues, and fund raising mechanisms, which pushes entrepreneurs and researchers to disregard talent development, and to chase after low hanging fruits, stifling the country’s bioeconomic sector’s potential to go global.
An inherent need is present to bring about drastic changes to the local bioeconomy research culture, and the mindset on commercialisation.
For the plans from the year 2021 to 2025, the Malaysian Government has launched the 12th Malaysian Development Plan.
The Plan emphasises on accelerating the development of the 8 strategic & high impact industries, which includes the bioeconomy industry. The objectives of the Plan is:
To eradicate hard poverty;
To build a peaceful, fair and inclusive society;
To create a sustainable environment with sustainable and inclusive economic growth;
To provide employment opportunities for all;
To protect the environment and natural resources;
To achieve mutual prosperity.
In addition, efforts will be dedicated to strengthen participation from small and medium enterprises within the domestic economy, and enhance entrepreneurial capacity.
As part of the agenda of the Development Plan, adoption of technology to realise new opportunities will be accelerated. The Plan is expected to propel the local agriculture technology (AgriTech) to new heights, and as a catalyst to achieve inclusive socioeconomic growth in Malaysia.
CONCLUSION
While Malaysia remains a powerhouse in regards to development potential in the bioeconomy sector, the need to reevaluate the current system and practices is present.
Biotechnology innovation should be based on future needs instead of the present, and should not remain government nor researcher-centric.
With Malaysia’s rapid modernisation and growth as a country, bioeconomy market needs are inherently versatile, and will change at a rapid pace.
For bioeconomy to remain sustainable for the country, better implementation of attributes such as funding accessibility, government policies, market needs, industry collaboration, talent development, and other relevant attributes should be implemented.
