Bioeconomy to focus on renewable resources
By Karamjit Singh August 9, 2012
- Not just oil palm biomass but forestry-based biomass focus too
- Technology gap overcome by partnering with and investing in right players
WITH Malaysian Biotechnology Corporation (Biotech Corp) predicting that there will be a fossil fuel shortage in 50 years time, its CEO Datuk Dr Mohd Nazlee Kamal wants to make sure Malaysia is prepared for such an eventuality.
The first step is to look in our own backyard to see what resources we can tap. Fortunately Malaysia has an abundance of biomass which can be converted into higher value added products, ranging from biofuels to sugars to biochemicals.
Biomass is defined as the fibrous, woody, and generally inedible portions of plants that make up 75% or more of all plant material. And in Malaysia, this does not come more than in the form of oil palm with almost 5 million hectares of planted corps. But also Malaysia has timber. So, think oil palm trunks, think empty fruit bunches and think wood chips.
To sharpen the focus on renewable resources, Biotech Corp has coined the term BioEconomy, which was introduced last year at BioMalaysia 2011. In Economic Transformation Plan (ETP) style, a series of workshops, labs, 3-feet brainstorming programmes were held with various industry programs. The outcome? A series of Entry Point Projects (EPPs) are expected to be announced this November at BioMalaysia 2012.
EPPs are projects conceived by the government’s transformation agency, Pemandu (Performance Management & Delivery Unit), and forms part of what is touted to be the country's overall ETP. The EPPs are aimed at catapulting Malaysia into developed status by 2020.
There is no concern over the duplication or overlap of initiatives as Nazlee says 10 EPPs and 20 projects within the areas of agriculture, healthcare and industrial have been submitted for Pemandu's consideration.
One key gap that was highlighted during the various sessions was technology. The conversion of Malaysia’s oil palm and timber-based biomass to biofuels, bioplastics and high value sugar demands complex technology that unfortunately Malaysia does not have.
This is where it gets interesting because working to solve this technology gap sees a number of initiatives coming together.
We are not starting from scratch to solve this problem as this gap was recognised years ago and hence another initiative was formed in 2006 called The Malaysian Life Sciences Capital Fund (MLSCF) which specializes in early stage investments in the areas of agriculture, industrial and healthcare biotechnology. The areas were identified as either those Malaysia had a competitive advantage in or wanted to develop competitive advantages in.
Co-managed by Malaysian Technology Development Corporation (MTDC) and Burrill & Company, a US-based merchant bank that specialises in the life sciences and biotech area, a sum of US$150 million was committed to the fund.
One of the strategic investments made was in Gevo in 2009. Gevo is a Denver, Colorado-based company specializing in the effective production of renewable hydrocarbons such as gasoline blendstocks, renewable jet fuel and renewable diesel blendstocks. Gevo already has the US Airforce as its customer.
The link to Biotech Corp is that Gevo has announced a RM1.65 billion (US$532 million) investment for the setting-up of the world’s first commercial bioisobutanol from wood-based biomass in a manufacturing plant in Kertih, Terengganu. Gevo has adapted its process technology to work with wood-based biomass that is abundant in Malaysia. One thousand hectares of land has been set aside to grow trees that will be harvested as raw material for the plant.
There is also a similar initiative with South Korea’s CJ CheilJedang Corporation and France’s Arkema SA to set up the world’s first bio-methionine plant and Asia’s first thiochemical platform in the East Coast Economic Region (ECER).
“A total of 36,000 ha of land has been set aside to grow a particular tree that is fast growing so that it can be harvested in two years. The Koreans and French will use the biomass from this to convert it into fermentable sugar,” notes Nazlee. This too will be in Terengganu.
Nazlee (pic) calls these forest-based activities industrial forestry and our Forest Research Institute of Malaysia (FRIM) is playing a role to assist the foreign companies. “FRIM are experts in the area of forestry and will help with their knowhow,” he says.
Farmers will enjoy the benefits of the projects with Nazlee estimating that they can earn RM40,000 (US$12,900) a year from a single hectare of forest grown with the particular tree identified.
But beyond oil palm and forestry, there is also marine-based projects announced. He talks about a recent offer extended to US-based Darden Restaurant Inc to set up the world's first lobster hatchery with an investment of over US$600 million (RM1.86 billion).
“Due to suitable marine environment, particularly within the coastal area of Sabah and its surrounding coastal waters, the company has identified Malaysia for the establishment of its proposed hatchery and lobster grow-out sea space,” he says.
While these investment type deals are being made, Biotech Corp is continuing in its activities to promote the local ecosystem to further build capacity.
“BiotechCorp is hosting Germany’s Cluster for Industrial Biotechnology (CLIB2021) South East Asia office. CLIB2021 is an open innovation cluster for bioeconomy with a focus on industrial biotechnology,” notes Nazlee.
“We have also initiated a lecture series as a platform for discourse between industry stakeholders and key players. Regulators, academicians, researchers as well as representatives from the financial institutions have been participating.”
Biotech Corp also recently organized a networking lunch with the foreign diplomatic corps to provide them with the latest highlights pertaining to Malaysia’s biotechnology industry. The idea is to provide opportunities for both parties to explore the scope for collaboration opportunities in Malaysia and their home countries.
There have also been numerous visits overseas by Nazlee over the past year. Too many, say some in the industry but Nazlee the trips have been necessary for him to get a feel and understanding of what other countries, their universities and their companies are working on and map that to what Malaysia is doing, and needs to do.
For instance he says, “Biotech Corp together with the Minister Datuk Seri Dr Maximus Johnity Ongkili made an official visit to France to facilitate and strengthen potential collaboration for the transfer of technology and experience with French-based companies.”
All these are valuable industry building and marketing initiatives that need to be done and are part of the efforts to build the biotech ecosystem in Malaysia, he believes.