News Straits Times Press, 17 July 2006

Biotech sector set to play bigger role in Malaysia's GDP growth
By Sharen Kaur sharen@nstp.com.my

MALAYSIAN Biotechnology Corp Sdn Bhd (Biotech Corp) has projected that the biotechnology industry will contribute at least 2.5 per cent to the country’s gross domestic product (GDP) by 2010.

Chief executive officer Iskandar Mizal Mahmood said the target is to contribute up to 4 per cent and 5 per cent by 2015 and 2020 respectively.

Biotech Corp is targeting a compounded annual growth rate of 23.7 per cent and total biotech output and direct biotech revenue of RM625 billion and RM270 billion respectively by 2020.

By 2020, close to RM30 billion would be invested in Malaysia’s biotechnology industry, creating almost 280,000 jobs, and establishing close to 100 biotech-based companies.

Biotech Corp was set up in April last year to to provide services that will ease the entry and setting up of companies locally, and the entry of foreign firms, for Malaysia’s biotechnology industry.

Its stakeholders comprise the Ministry of Science, Technology and Innovation; Ministry of Health; Ministry of Finance; Ministry of Agriculture and Agri-based Industries; Ministry of Natural Resources; and the Economic Planning Unit.

Iskandar said Biotech Corp expects the RM2 billion allocated by the Government to develop the biotechnology sector in Malaysia over the next five years will benefit the industry and companies that require assistance in technology and financing to develop the business.

From the RM2 billion allocated, RM463 million is for research and development, RM100 million for biotechnology programmes, RM529.80 million for biotechnology business development and RM928.50 million for infrastructure.

Under the Ninth Malaysia Plan, the Government talked about expanding the biotechnology industry covering the agriculture, healthcare and industrial biotech sectors, and to support existing and new biotechnology based companies in Malaysia by identifying value propositions and assisting them with financing packages.

“The Government realised the importance of the biotechnology industry under the Eight Malaysia Plan. As a result, the National Biotechnology Policy (NBP) was launched in April last year while a science and technology platform was built,” Iskandar told Business Times at an interview.

The role of NBP is to add value to the agriculture sector, to capitalise on Malaysia’s biodiversity to commercialise discoveries in natural products and bio-generics, to leverage on the country’s strong manufacturing sector and establish biotechnology centres.

The policy also aims at giving enough incentives and financial backing to encourage private sector and academia to get involved and to improve the country’s legal and regulatory framework.

Iskandar said there has been a RM4 billion value creation in terms of revenue generated by the 100 biotech-based companies already established in Malaysia. “We expect this to double with all the initiatives put in by Biotech Corp, the Government and the respective agencies, our stakeholders, financial institutions and the industry,” he said.

Iskandar said there are almost 5,000 biotech-based firms worldwide and it has been forecasted that there will be a value creation in terms of revenue generated globally, in the region of US$2 trillion (RM7.36 million) by 2010.

Biotech Corp is offering a five-year development programme, which includes RM100 million for commercialisation grant, RM100 million for technology acquisition programme, and RM50 million each for intellectual property research and management and biotech entrepreneur programmes to help companies kick-start certain initiatives.

“Biotech Corp aims to help companies develop their role in the industry. There is lot of potential here and we want to develop it,” said Iskandar.

He said Malaysia has the potential to be a biotechnology hub of significant presence and there are plans in the pipeline to establish a network of branches in worldwide hubs to promote the growth of biotechnology in Malaysia.

Biotechnology demands great skill and expertise in genetic sciences as well as engineering and processing technology and it requires deep financial resources and the capacity to create valuable partnerships that will span decades, diminish barriers and achieve breakthroughs.