bioeconomy initiative in malaysia: lessons learnt and the way...
TRANSCRIPT
1BioE in Msia_Conference Paper_Biomass Asia_v8.pptx
Conference paper
Bioeconomy Initiative in Malaysia: Lessons learnt and the way forward
Kuala Lumpur, May 21, 2013
2BioE in Msia_Conference Paper_Biomass Asia_v8.pptx
Today, our world faces a confluence of very pressing challenges
Global challenges today
Population growth Food security Climate change1 2 3
Energy security Human disease Economic uncertainty4 5 6
Source: UN, FAO, BP Statistical Review, OECD, IPCC, Roland Berger analysis
1940 1960 1980 2000 2020 2040 2060
Low case
High case12
10
8
6
4
2
0
0.7
2.2
1.3
2030-20502007-20301961-2007
Crop production growth [%]Global population [bn]
2020
6%
81%
13%14.8
85%
11%5%
2011
12.6
87%
8% 5%
2030
16.8
FossilRenewablesNuclear
Energy consumption [bn toe]
Projected change in temperature [degC]
0.0
0.20.1
0.40.3
0.6
0.30.2
Q4Q3Q2Q1Q3 Q4Q2Q1
OECD countries quarterly growth of real GDP over previous quarter [%]
2011 2012
Infectious diseases globally
Ebola Cholera Nipah virus
Dengue HIV H5N1
SARS
Malaria
0
2
4
6
2000 2020 2040 2060 2080 2100
Global temperature change [oC]
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4321 5 29282726252423222120191817161514131211109876
10
9
8
7
6
5
4
3
2
1
030
An increasingly shared global view is that "living off the land" is the only way to secure long term human survival
"LIVING OFF THE LAND"
Population 9 - 10 billion
World population - from year 0 to year 3000 [in billions]
"LIVING OFF THE LAND"
Population < 1 billion
WE ARE HERE
"AGE OF HYDROCARBONS" CO2
Source: UN world Population Prospects; Population Reference Bureau; BP; Roland Berger analysis
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Sustainable bio-economy model and biotechnology innovations
A global bio-based economy is the way forward as it addresses key sustainable development challenges affecting the world
Economy> New industry innovations can drive economic growth
and create more jobs
Environment> Use of bio-based fuels can reduce the net
greenhouse emissions and combat climate change
Society> Focused efforts on agricultural biotechnology can lead
to improved food security for the growing global population
> New cures to infectious diseases can be found
POTENTIAL BIOTECHNOLOGY CONTRIBUTIONS TO SUSTAINABLE DEVELOPMENT CHALLENGES
Source: Roland Berger analysis
Viable Equitable
SUSTAINABLE
Economy
Environ-
ment
Society
Livable
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Concept of a bio-based economy
In a bio-based economy, sustainably produced biomass is converted into energy and bio-products in a closed natural cycle
Source: Innovation agenda for the BBE, Roland Berger
(Thermo) chemical
conversion
PRODUCE BIOMASS CONVERT BIOMASS PRODUCE BIO-BASED PRODUCTS
Biochemical
conversion
WASTE
Sustainable available (parts) of crops/plants
Algae
Primary residuals (road grass, wood trimmings, …)
Secondary residuals (beet pulp, beer brush)
Tertiary residuals (animal fat, dung, VFG)
Specialty chemicals
(Base) chemicals & materials
Fuels
Food & feed
Heat
Power
WASTE
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Pacific Ethanol
(Cellulose ethanol)
BioGasol
(Cellulose ethanol & gas)Force
(Cellulosic fibers & chemicals)
NExBTL Biorefinery
(Veg oil & animal fat biodiesel)
Ghent Bio-
energy Valley
(Biofuels, gas and
power)
Lignocellulosic Biorefiniery
(Cellulose ethanol and chemicals)
Green Biorefinery
(Chemicals, biofuels,
gas and power)
Green Biorefinery
(Chemicals, food, feed,
biofuels, gas and power)
Green Biorefinery
(Cellulose ethanol)
Mackay biorefinery
(Cellulose ethanol)
Waste Biorefinery
(Cellulose ethanol)
CHRISGAS
Large scale
ethanol
production
Forestry Biorefinery
(Chemicals)
Green Biorefinery
(Chemicals, biofuels,
gas and power)
Microalgea Biorefiniery
(Chemicals, feed, food)
Iogen
(Cellulose ethanol)
Lignol
(Cellulose ethanol)
Blue Fire
(Cellulose ethanol)
Abengoa
(Cellulose ethanol)
ICM
(Cellulose ethanol)
Poet
(Cellulose ethanol)NewPage
(Cellulose
ethanol)
Alico
(Cellulose ethanol)
Range fuels
(Cellulose
ethanol)
NExBTL Biorefinery
(world’s largest biorefinery)
(veg oil & animal fat biodiesel)
DSM-Roquette
(Chemicals)
Global bio-based initiatives (selection, non-exhaustive)Borregaard
(Cellulose
ethanol &
specialties)
BioHub
(Chemicals)
Braskem
(biopolymers)
VTT/Kemira
(Biomass R&D center)
Dedini/Novozymes
(Cellulose ethanol)
Source: Wageningen University Research Center, IEA , Department of Energy, Company websites
The global evolution towards a bio-based economy is on the way, facilitated by an increased commercialization of biotech research
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Global revenues in the biotechnology sector will breach RM 1 trillion this year with Asia Pacific displaying above average growth
Global biotech revenue evolution [RM bn] Biotechnology revenue breakdown by geography
1,386
1,261
1,1461,040
945861
800735
666590
+10%
+10%
1615141312111009082007
364325291260234215209198185153
+12%+9%
1615141312111009082007
Asia Pacific biotech revenue evolution [RM bn]
Rest of the world
13%Asia-Pacific
21%
Europe
23%
US
43%
Rest of Asia Pacific
16%South Korea
5%India9%
China
17%
Japan
53%
WORLD ASIA PACIFIC
Source: Assessment of Phase I and Review of the National Biotechnology Policy
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Launch of Malaysia's National Biotechnology Policy
Recognizing biotech as a driver for economic growth, Malaysia launched the National Biotechnology Policy (NBP) in 2005
2005 2010 2015
LAUNCH OF NATIONAL BIOTECHNOLOGY POLICY
2020
Source: Desktop research, Roland Berger analysis
The National Biotechnology Plan is separated into three phases with specific strategies for each phase:
Phase I – Capacity builting (2005-2010); Phase II – Science to business (2011-2015); Phase III – Global presence (2016-2020)
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The NBP set a target for biotech to grow to 5% of Malaysia's GDP and create 280,000 jobs by 2020 through nine policy thrusts
2020 objectives
5% of GDP
in 2020
280,000 jobs
1 Agriculture biotechnology development
2 Healthcare biotechnology development
3 Industrial biotechnology development
4 R&D and technology acquisition
5 Human capital development
6 Financial infrastructure development
7Legislative and regulatory framework development
8 Strategic positioning
9 Government commitment
1Establishment of Biotechnology Corporation Malaysia
2
Industrial technology development3
Agricultural development4
Skills development5
Job creation6
Business and corporate development through accelerator programmes
7
Capacity building in R&D8
Bioinformatics9
Adoption of policies, plan and strategies10
Establishment of advisory and implementation councils
9 NBP POLICY THRUSTS PHASE I IMPLEMENTATION STRATEGIES TARGETS
Source: National Biotechnology Policy, Assessment of Phase I and Review of the NBP
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Timeline of developments/national plans surrounding bioeconomy sector
Since 2005, many other policies and initiatives have been launched including the Biotechnology Transformation Program, laying the foundation for a bio-based economy
Formation of BiotechCorp
> Formation of AgensiInnovasi Malaysia (AIM)
> Launch of National Biomass Strategy (NBS)
> Launch of 1Malaysia Biomass Alternative Strategy (1MBAS)
> Conclusion of BTP lab sessions
> Formation of the Sustainable Energy Development Authority Malaysia (SEDA)
> PM Datuk Seri Najib Tun Abdul Razakannounces plans to cut Malaysia's carbon emissions by 40% by 2020
Launch of National Green Tech Policy
> Renewable Energy Act
> 10th Malaysia Plan (10MP)
> Economic Transformation plan - PEMANDU NKEALabs
Source: Desktop research, Roland Berger analysis
BTP EPPs and trigger projects announced by the Prime Minister Oct '12
2005 2006 2010 2011 20122009
LAUNCH OF NATIONAL BIOTECHNOLOGY POLICY
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Key developments/national plans surrounding bioeconomy sector
But the lack of alignment of the numerous policies, strategies and initiatives makes it a challenge to coordinate implementation
National Biotechnology Policy
10th Malaysia Plan (10MP)
Source: Desktop research, Roland Berger analysis
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Biotechnology Transformation Program
We were engaged to conduct a lab to develop the Biotechnology Transformation Program
BTP CONTEXT AND OBJECTIVES
Projects under BIM are not exhaustive and must be revisited and prioritized to meet overall BIM objectives
Context:
> Need for much better consolidation and coordination of strategies and initiatives
> The Bio-economy Initiative Malaysia (BIM) seeked to align these efforts; was later re-named as the Biotechnology Transformation Program (BTP)
Objectives:
> Foster full participation of the private sector through monetizable projects
> Ensure coordination, consistency and sustainability of all national biotechnology policies in parallel with the ETP
> Reap long term benefits for Malaysia
> Contribute to the country's economy, welfare, productivity, health and environment
BIM OPPORTUNITIES (2012)
PRIVATE SECTOR INITIATIVES
Projects Projects Projects
Projects Projects Projects
BIOTECHNOLOGY
TRANSFORMATION PROGRAM
Source: MOSTI, BiotechCorp
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VISION
To become a global high income bio-economy through a sustainable ecosystem of R&D and
commercialization in the areas of agriculture, healthcare and industrial biotechnology by
2020, leveraging upon:-
Three key focus areas were identified to support national aspirations to become a high income bio-economy
Tropical agro-biotechnology
Renewable bio-resources
Innovative healthcare products and
services
1
2
3
Source: BIM Workshop
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Filtering process to identify initiatives under the BTP
A series of lab and workshop sessions identified ten entry point projects in agriculture, healthcare and industrial biotechnology
Start with a
long list of
biotechnology
opportunities
Industrial bio
Inputs
Bio-based farm
inputs
Biochemicals
Biomaterials
High value
bioingredients
High value food
varieties
Biosimilars
Drug discovery
Molecular
screening
Stem cells
> >200 participants over a 3 day workshop
> Identification of potential EPPs
> 87 participants over a 6 week lab
> Identify suitable EPPs, action plans, owners, KPIs and project impact
> Participants from public & private sector, academia
BIM WORKSHOP LAB SESSIONS 10 PROJECTS
Industrial biotechnology Agriculture biotechnology Healthcare biotechnology
Source: BIM Workshop
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TRIGGER PROJECTS
The 10 PROJECTS translate into 20 catalytic trigger projects …
1
2
3
4
5
6
7
8
9
10
11
12
13
15
16
14
17
18
19
Establishment of an energy crop plantation
Production of syngas for steam generation from solid bimass
Production and utilization of compressed biomethane gas (CBG) for transportation and industrial sectors
Production of isobutanol from cellulosic feedstocks
Bioethanol and biomethanol production from solid biomass
Production of cellulosic sugars from woody biomass produced by energy crop plantations
Establishment of commercial production of PHBH from palm oil and its by-products & derivatives
Production of bioplastics resin
Production of Biopolyols for Biopolyurethanes from Palm Oil derived Oleic Acid
Scale up production and promote usage of biodegradable & compostable packaging products from sustainable agro-waste
Converting agriwaste to bio fertilizers through implementation of integrated waste treatments plants
Scale up of production and commercialization of bio-feed for livestock industry
Scale up plantation, extraction & commercialization of Stevia as an alternative sweetener for food & beverage products
Develop, produce and commercialise indigenous hybrid paddy seed
Scale up production of high value mushroom products
Develop plantation, extraction and commercialization of mangosteen
Accelerate development, production and commercialization of Malaysian-made biotech drugs (biosimilars/biologics)
Develop drug discovery services and IP development around natural products
Scale up innovative molecular screening and diagnostics (MSD) products and services
To promote, encourage and ensure progress of stem cell therapeutics and regenerative medicine in Malaysia20
INDUSTRIAL BIO INPUTS
BIO-BASED FARM INPUTS
BIOCHEMICALS
BIOMATERIALS
HIGH VALUE BIOINGREDIENTS
HIGH VALUE FOOD VARIETIES
BIOSIMILARS
DRUG DISCOVERY
MOLECULAR SCREENING
STEM CELLS
EPPS
Industrial biotechnology Agriculture biotechnology Healthcare biotechnology
Source: BIM Workshop
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Value creation of trigger projects
… delivering a GNI contribution of RM 3.6 bn and creating 13,600 new jobs by 2020
Jobs created by 2020
13,600RM 3.6 bnGNI contribution in 2020
1.4
1.5
0.7
5.4
1.8
Agriculture 2020HealthcareIndustrialCurrent (2011)
GNI IMPACT [RM BN] JOBS CREATION
TRIGGER PROJECTS
Source: BIM Workshop
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Key challenges for the Malaysian biotechnology industry (1/3)
Our internal analysis and conversations with industry players reveal 6 key challenges for the Malaysian biotechnology industry
Source: BIM Workshop, Roland Berger analysis
SECURITY OF FEEDSTOCK SUPPLY
EFFICIENCY OF FUNDING AND INCENTIVES
> Uncertainty of reliable feedstock supply domestically (e.g. EFB, RSPO, woodchip)
> High dependency on limited number of players for supply
> Lack of land to cultivate energy crops – in competition with more profitable crops
> Certain industry sectors lack of tax incentives to spur investments (e.g. biopolyols & biopolyurethanes from palm oil derivatives)
> Some ventures are not cost competitive and rely on direct/indirect subsidies to improve economics (e.g. subsidized natural gas)
> Recipients of grants and investments made by the government should be monitored closely to track performance
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Key challenges for the Malaysian biotechnology industry (2/3)
Our internal analysis and conversations with industry players reveal 6 key challenges for the Malaysian biotechnology industry
Source: BIM Workshop, Roland Berger analysis
INADEQUATE LOCAL EXPERTISE
COMPETITION
> Limited number of local & skilled manpower for bio-manufacturing e.g., for biopharmaceuticals
> Limited number of experienced personnel on the side of regulators to assist in reviewing documents/dossier
> Need for targeted development program for SMEs involved in the biotechnology sector
> Established multinationals could constrict the growth of domestic biotechnology ventures with their scale, technology leadership and resources
> Stiff competition with existing manufacturers who do not rely on bio-based input (e.g. bio-plastics)
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Key challenges for the Malaysian biotechnology industry (3/3)
Our internal analysis and conversations with industry players reveal 6 key challenges for the Malaysian biotechnology industry
Source: BIM Workshop, Roland Berger analysis
MARKET EDUCATION
CHALLENGES IN POLICY & REGULATION
> Building customer awareness with those who are unfamiliar with bio-based product substitutes and their inherent benefits
> Educating customers about the usage of new therapy programs and bio-pharmaceuticals in the field of medicine, healthcare and pharmaceuticals
> Some industry players have noted that government bureaucracy has resulted in a long waiting period to receive the necessary approvals
> The process for clinical trials of bio-pharmaceutical products needs to be reviewed to expedite product development and commercialization
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Key priorities (1/2)
Going forward, some key focus priorities are needed to propel Malaysia's bio-based economy towards further growth
Develop a clear roadmap for implementationDefining what needs to be done and how we set out doing it will set us up for success. Alignment, execution, performance
monitoring and regular strategic reviews are all necessary for success.
Engrain sustainability in people's mindsetMalaysia has inherent advantages to 'win' in the bio-economy. But the mindset of sustainability and living off the land
must first be a way of life – not easy; given that we always have 'enough' resources, there is hardly any incentive to be
efficient.
Further invest downstreamExtract maximum value from our natural resources by making sustainable investments further downstream the value
chain in new application areas (e.g. biochemicals, bioplastics, bio-based pharmaceuticals etc)
Develop biotechnology innovation clustersThe biotechnology industry requires a diverse supporting ecosystem of interconnected companies, suppliers, service
providers, research institutions and other related organizations located within geographic concentrations to promote
effective collaboration.
Build solid policy and governance structuresIt is often observed that the more successful bio-based economy models in the world have solid policy setting and strong
governance structures, providing the necessary environment for growth
Source: Roland Berger analysis
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Key priorities (2/2)
Going forward, some key focus priorities are needed to propel Malaysia's bio-based economy towards further growth
Attract and develop talentsQuality supply of engineers, scientists, biotechnologists from the local talent pool required; attracting global experts and
leading biotech firms; providing a conducive environment for innovative research
Engage the peoplePublic education and communication is necessary to seek buy in and also to overcome skepticism and negative feelings
over novel bio-based products & technologies
Foster cross-industry integrationBio-based value chains cut across different sectors and require multi-industry collaboration to develop new applications
closer to the needs of consumers
Focus on commercializationThriving collaboration amongst the government, business entities and research initiatives must translate into increased
numbers of successful commercialization of biotechnological innovations
Anticipate future trendsThe biotechnology sector is today probably where the IT sector was in the 1980s. Trends may still be volatile and the end
game is still unclear. Need to keep up with the latest industry trends and developments. Recalculate plans when the facts
change.
Source: Roland Berger analysis
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