Bernama.com (Malaysian National News Agency), 29 July 2006 17:18 PM

Leverage On Msia's Biodiversity To Export Herbal Products, SMEs Told

KUALA LUMPUR, July 29 (Bernama) -- Small and Medium Enterprises (SMEs) must leverage on Malaysia's extensive biodiversity to develop the herbal industry into an export sector, Deputy Minister of International Trade and Industry, Ng Lip Yong said Saturday.

This would help to curtail foreign exchange outflows as Malaysia currently imports almost RM6 billion of these products annually because SMEs were only engaged in low value-added activities, he told reporters at the "Industry Programme" organised in conjunction with the second International Conference on Women's Health and Asian Traditional (WHAT) medicine, here.

He said the local market for herb-based products, including health supplements, traditional herbals, cosmetics and fragrances, is estimated at RM6.2 billion a year, but "the irony is that more than 85 percent of it is imported."

With herb-based products worldwide estimated at a staggering US$80 billion (RM303 billion), Ng said that there was a huge potential for Malaysia to become a bigger player in this market.

"In Malaysia, the production of traditional medicine and herbs, mainly undertaken by SMEs, is limited to the processing of dried plant material to herbal powder or in fermentation to produce medicinal tonics," he said.

Ng said the government has identified the industry as a potential growth area for SMES under the Third Industrial Master Plan (IMP3).

"I wish to see the SMEs involved in this industry upgrade to a higher level of technology in order to maximise the potential value of the products," he said.

"By upgrading their expertise and technology, it will result in the growth of an export industry which could lead to significant import substitution," he said.

He said SMEs also need to leverage on local knowledge in traditional and complementary medicine in efforts to develop leads for the pharmaceutical and nutraceutical industries.

"This means there has to concerted efforts by all relevant ministries and agencies to carry out relevant research and development with a view to commercialise" their operations, he said.

Ng also said the government encourages Malaysian companies to utilise biotechnology in the innovation and development of better healthcare products and treatments.

However, he said that given the large investments required to undertake the entire process of innovation to commercialisation, Malaysian companies were advised to develop niches in strategic areas in this industry value chain.

In this regard, he said various government agencies, such as the Small & Medium Industries Development Corporation (SMIDEC), Standards and Industrial Research Institute of Malaysia (SIRIM) and Malaysia Technology Development Corporation (MTDC) will help the local players in terms of providing tax incentives and grants.