Industrial Biotechnology

in Malaysia
Mohd Ali Hassan
Dean, BioTech
University Putra Malaysia

Wan Abdul Rahaman Wan Yaacob

Chief Operating Officer
BiotechCorp,, Malaysia
BiotechCorp

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 Malaysian Biotechnology Corporation Sdn Bhd
(BiotechCorp) was established to spearhead the
development of biotechnology and life sciences.

Key objectives :

►Act as a one-stop-centre for biotech in Malaysia

►Nurture and accelerate growth of Malaysian

biotechnology companies

►Create conducive environment for biotechnology

►Actively promote foreign direct investments in

biotechnology

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Oversight & Direction

International Advisory Panel Prime Minister

Implementation Council “Cabinet Level”

Ministry of Science
Ministry of Finance Technology & Innovation
(MOSTI)

Khazanah Nasional Board of Directors

Berhad

Cluster Working Groups “Officials Level”

 Bio-
Bio-Technology
• Biology = study of living systems (life sciences)
• Technology = application of science to produce useful products and/or services
• Biotechnology = technology which utilizes living organisms and their biological
processes for the production of products and services
• Traditional biotech – enzyme, fermentation, bioprocess engineering
• Modern biotech – application of molecular techniques as tools for new/improved
products and services
The Circles of Biotechnology

Bioprocess Engineering

Enzyme Fermentation

Biotechnology

Biochemistry Microbiology
Molecular Biology
 Colours of Biotechnology

• Red Biology : medical /biomedical / healthcare

• Green Biotechnology : agriculture / crop production

• Blue Biotechnology : marine

• White Biotechnology : industrial / environmental / microbial

Industrial (White) Biotechnology
• screening and isolation of useful microbes
• improved fermentation processes
• bioreactors, process control
• sterility, aeration, mixing
• biosensors, online monitoring
• scaling up, modelling, simulation
• improved recovery processes
• biosubstitution
• bioremediation
• waste and wastewater treatment
National Biotechnology Policy (2005)

>>> “Biotechnology for wealth creation and social well-being” <<<

well-being
biotechnology as a new engine of growth!
• 9 thrusts – leveraging on our areas of strength
» agriculture biotechnology
» healthcare biotechnology
» industrial biotechnology

• The national biotech road map..

Phase 1 Phase 2 Phase 3
2005-2010 2011-2015 2016-2020
Capacity Building Science to Business Global Presence

BiotechCorp Products Licensing

BioNexus Technology Innovation
R&D&C Funds Industry/Jobs Global Companies
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www.mosti.gov.my
N ational Biotechnology Policy

NBP launched in 2005 Thrust 1

Agriculture Biotech
D evelopm ent

Thrust 9 Thrust 2

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Governm ent Support H ealthcare Biotech
and Com m itm ent D evelopm ent

Thrust 3
Thrust 8 Industrial Biotech
Strategic D evelopm ent Developm ent

Thrust 7
Legislative and Regulatory
Fram ework D evelopm ent
Thrusts Thrust 4
R& D and Technology \
Acquisition Developm ent

Thrust 6 Thrust 5
Financial Infrastructure Hum an Capital
Developm ent Developm ent

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BioNexus companies enjoy a set of privileges
contained within the BioNexus Bill of
Guarantees (BoG)

With BioNexus status comes:

Support and assistance (BNP)

Funding support (BCG)

Programmes designed to build capacity

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Biotechnology Focus Areas
 BIOFUEL FINE & SPECIALTY CHEMICAL BIOREMEDIATION

BIODIESEL BIOETHANOL
Chemicals Municipal Hydrocarbon
BIOGAS
Nutraceuticals Pharma Industrial
product
Food
BIOMATERIAL BIOCATALYST

Poly HydroxyAlkanoates
(PHA) New discovery
Biodegradable polymer
from agri-biomass Industrial Feed & Food

Poly Lactic Acid

Compounding/moulding (PLA)
1

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Malaysia (2008), the manufacturing sector contributes
35% of GDP, 70% of exports and 1 million jobs.

Strategy for Biotechnology:

>> provide value addition, moving up the value chain
>>>> expanding opportunities in bioprocesing and biomanufacturing
>>>>>> for bio-based products, green chemicals and renewable energy.

In Malaysia, industrial biotechnology can be applied in the production of 10-20% of

all chemicals sold by the year 2010.
(McKinsey and Company)

Malaysia’s export value of chemicals and chemical

products is valued at RM 40 billion in 2008

which means

the potential value of industrial biotechnology

in Malaysia is estimated at RM 4 billion
or US$1.3 billion

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 Industrial Biotechnology in Malaysia is at early stage, but developing fast

Strength #1

1. Mega biodiversity
250,000 flora species in which
1,230 contain medicinal
properties

Herbal extract and bioactive Source of useful

compound markets microbes, enzymes
US$11 billion per year and bioremediation
globally (2009 estimate) system

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 Strength #2
2. Feedstock availability

Palm Oil Palm Biomass

Types % of Fresh Fruit Production (million

Bunches (FFB) tonnes
in 2008)

POME 65 52
EFB 23 18.4
Fiber 13 10.4
Shell 6 4.8
Total 85.6

plus fronds (13 MT) and old trunks (8MT) at the plantation 16
 Strength #3

3. Economic and Political stability

Government Vision & Support Strong Economic Structure

(pro-business) “Strong FDI Growth at 53.4%
in 2008” - UNCTAD

Ministry of Energy, Green Technology and Water

National Green Technology Policy (2009) 17

Empty fruit bunch (EFB) has the highest commercial potential
(no collection cost, currently very much under-utilised)

Total EFB estimated to be 7.6 million tonnes (dry weight)

Can generate 1.2 billion liters of bioethanol

Total volume of gasoline sold was 11.4 billion liters in 2008

Potential demand of 1.14 billion liters of bioethanol (for E10)

By 2010, Malaysia will be 1st country to produce bioethanol from sago

- Foreign company and local university initiative (demonstration plant)
- New Century Fermentation Research Ltd, Japan

Main barriers are enzyme cost and gasoline subsidy (USD 0.5 per liter)

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 Primarily an export-oriented industry, using RBDPO and CPO (later jatropha oil)
Palm methyl ester, as blends in transport fuel
low demand
Production has slowed down in 2009 due to
higher price than crude oil *

4.48 million hectares

feedstock diversification
of oil palm land
Strategies multiple-feedstock processing
new uses of biodiesel by-product
Biodiesel producing
500,000 tons CPO yearly commitment for B5, from 2010
capability is 10.2
million tons/year
Currently – 12 biodiesel (90 companies
plants with 1.5 million licensed)
tons capacity

* Note: CPO is ~USD 580/tonne; crude oil is ~USD 440/tonne @ USD 60/barrel 19
POME or MSW CH4 electricity

Green and Renewable!

Future Potential

POME or MSW H2 home type fuel cells, automobiles

CDM as incentive..

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TNB Jana Landfill Project (2 MW)

The 1st grid-connected

renewable energy
project in Malaysia
2 MW installed
capacity
Fuel is biogas
captured from the
landfill area
Commissioned 2004
TSH Bio Energy Project

Located in Kunak, Sabah

Generation Capacity 14 MW
(10 MW sold to SESB)
Fuel to be used – oil palm residues
(EFB, shell and mesocarp fibre)
50,000 tonnes CO2 mitigation annually
 Current Bioremediation in Malaysia

solid soil
waste treatment remediation

water, river and sewerage removal of

treatment toxic metals

Potential New Industries

hydrocarbon-degrading microbes phytoremediation

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Exports of plastics increased by 11.6%, from RM8.3 billion (2007) to RM9.3 billion (2008)

Malaysia is one of the world’s

biggest manufacturers and
exporters of plastic products,
with 1,500 manufacturers PHA PHBV
feedstocks from palm currently conducting
oil, POME and Current feasibility study
jatropha oil Focus
Malaysia, China and Thailand
account for 80% of all plastic
bags exported to Europe

PHBHX
PLA
feedstock from
CPKO feedstock from starch

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 Malaysia is a net enzyme importer
2008 – US$14 million
Value (RM million)

*US$1.00 = RM3.50

Year

lack of experience on scale-up operations

No large scale manufacture due to limited fermentation infrastructure
high cost of setting up commercial scale facility

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 Enzymes Microorganisms
Lipase, lipoprotein lipase Humicola lanuginosa, Aspergillus niger Aspergillus flavus, Mucor
miehei, Bacillus sp., B. megaterium, Cunninghamella echinulata
Corynebacterium sp., Pseudomonas sp., Geobacillus
thermodenitrificans, Pseudomonas paucimobilis
Protease Bacillus megaterium, Trichoderma sp., Cellulomicrobium sp.,
Aspergillus niger

Cellulase, β-glucosidase Aspergillus niger, A. niger subsp. awamori, Trichoderma reesei

Xylanase Aspergillus niger

Lignin degrading enzymes, Phanerochaete chrysosporium, Humicola grisea

(lignin peroxidase, manganese
peroxidase, and laccase)
Tannase Aspergilus niger

Mannanase Aspergilus niger

Phytase Aspergilus niger

Chitinase Fusarium sp.

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 Structure of Malaysia’s Chemical Industry

Malaysia’s
Chemical
Industry

Petroleum
Products & Chemicals
& Chemical Rubber Plastic
Natural Products Products
Gas Products

Soap
Agricultural
detergent Natural
chemetic: Inorganic Industrial Oleo- Latex Plastic
cosmetic & Rubber
pesticides Chemicals Gases chemicals Threads Resins
toiletry Latex
fertilizers
preparation

consists of bulk chemicals, specialty chemicals

and fine chemicals industries

Bio--based and green chemicals?

Bio
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 Common Technologies

thermochemical treatment of
conversion plant materials

extraction and
purification

Use of biomass?

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 Malaysia’s Strength

Herbal extraction & Oleo-chemicals

whole extracts
Herbal products types
pure phytochemicals

Local nutraceuticals are highly dependent on imports, but now over 100 active local players

Acquisition of SFE enhanced manufacturer’s capability to produce standardized extracts

Herbal-based medicines
Frost & Sullivan – market size could reach
“Nutraceuticals market between RM 4.5-5
in Malaysia is forecast billion/year and to double by
to reach US$ 2 billion 2010, and expected to
in 2020” reach RM 12 billion in 2012

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 Oleo-chemical
Oleo-
Products

ester manufacturing

glycerine fatty alcohol

fatty acids methyl ester

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 Special Case Study
- THE PALM OIL INDUSTRY -

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The 3 Ps – Profit, People and Planet

• Merging the 3Ps Profit

• Towards sustainability
>>> win-win-win strategy
Sustainable
Development

People Planet

“ Biotechnology for Sustainable Development ”

 Palm Oil Industry
and Malaysian Socio-Economy
Facts and figures..
• Now 4 million hectares (~10% of Malaysia)
(more than 50% of Malaysia is rainforest)
(Malaysia is net carbon absorber/sink)
(oil palm canopy is similar to rainforest)
(oil palm is perennial crop, 25-30 years)
• 400 mills throughout Malaysia
• Highest oil yielding crop in the world
• Palm oil - Malaysia’s gift to the world!
• Palm oil is the cheapest cooking oil
• Palm kernel oil is source for oleochemicals
• USD15 billion export in 2008
• More than 500,000 people employed
• Poverty alleviation
>> land ownership & stable income
>>>> FELDA’s success story (50 years!)

• Sustainable Development
- 3Ps: Profit, People and Planet
- challenge: “win-win-win” strategy
- need to address the bigger picture
 Malaysian Palm Oil Industry

Fresh Fruit Bunch

70 million tonnes

Palm Kernel Oil Crude Palm Oil

2 million tonnes Oil Extraction 16 million tonnes

Renewable Resources

Fiber Shell Palm Oil Mill Effluent

9 million tonnes 4 million tonnes 50 million tonnes

Empty Fruit Bunches

16 million tonnes Fronds Trunks
13 million tonnes 8 million tonnes
Adding Value to Palm Biomass
• Paradigm shift towards biomass
– Not waste
– Renewable
– Sustainable
– Under-utilised resource

• Uncertainties of biomass
– Technological proven ?
– Economically feasible ?
– Quality and quantity ?
– Availability & distribution ?

 value chain
fine chemicals
food
fiber
feed
fuel
Palm Biomass Refinery - New Business & Products

Standardised biomass available

“business as usual” Empty Fruit Bunch Palm Oil Mill Effluent
15 million t/yr 50 million t/yr

Bioplastic (PLA) “zero

zero emission”
emission
and Bioethanol
waste--to
waste to--wealth
Compost
+ water recycling Pre-treatment and
K recycle ↓ water footprint Saccharification
Bio-acids

Sugars

Fermentation in
bioreactors Bioplastic
Biomass Energy Biogas, CH4 (+ Biohydrogen) (PHA)
 Bioplastics from Palm Biomass

Concentration Oil
of biomass Extraction

Plastic Palm Oil Mill Effluent

pellets

Bioplastics
Consumer (PHA)
products Bio-acids Plant
 CO2, H2O

Photosynthesis
CHO
Biodegradation
Carbon cycle of POME acids
bioplastics

PHA Biomass
(fermentation)
Copolymers
Depolymerisation Chemical recycling
of PHA
Others
Monomer
 Renewable Energy (1 MW) to Grid
Estimated Costs, RM (million)

Biogas capture (ponds or tanks) 1.8

Downstream processing (gas scrubber & gas storage) 2.0

Gas engine @ 1000 kW 1.2

Total plant cost 5.0

Yearly maintenance and operation cost 0.5

Benefits and revenues generated :

• Internal office use and external lighting (“24/7”)
>>> reduce diesel cost/usage during mill’s non-operating hours
• Sale of green electricity to TNB @ RM0.25/kWh ~ RM 1 million/yr
• Aeration system to remove remaining BOD
increased POME treatment efficiency >>> water re-use >>> zero emission!
+ reduced land requirement (~70% of total mill area)
• Estimated sale of CER @ € 10 per tonne CO2 ~ RM 1 million/yr
(Assumption: mill capacity of 60t FFB/hr and 320 days of operation)
Bioenergy and Steam Co-Generation

Estimated Costs, RM (million)

Biogas capture (ponds or tanks) 1.8

Downstream processing, gas storage & boiler modifications 2.2

Total plant cost 4.0

Yearly maintenance and operation cost 0.4

Benefits and revenues generated :

• Additional income from palm kernel shell @ RM100/tonne
>>> reduce 50% shell usage inside the boilers
>>> potential revenue ~ RM 1 million/yr
• Reduce black smoke emission from boilers
>>> increase air quality/environmental benefits
• Estimated sale of CER @ € 10 per tonne CO2 ~ RM 1 million/yr

(Assumption: mill capacity of 60t FFB/hr and 320 days of operation)

 Towards Sustainable Development of Palm Oil Industry in Malaysia

CDM provides profitable

area for new business to
which biomass energy
can be supplied from
palm oil industry at a
reasonable price

for new biomass business

CDM provides a complete methane

fermentation system and change
lagoon area into a profitable area.
CDM provides electricity from methane
fermentation system for new business
>>> towards zero emission and w2w!
1. Reduction of greenhouse gases
emission by sealing the lagoons.
2. Prevention of undesirable smell
and water pollution by modern
treatment ( + water recycling).
3. Local employment can be
encouraged from new business.

For sustainable economic growth in Malaysia, the development of new oil palm
plantations in the tropical rainforest will soon be no longer feasible.
In order to meet the increasing demand for palm oil in the future, palm oil industry
must co-exist with nature, environment and people… >>> 3P (Profit, People, Planet)
• Industrial biotechnology is still at the development stage in Malaysia

• Opportunities from bioresources and biodiversity in the country

• Abundant raw materials but need to develop or acquire technology to create value

• Will largely depend on the value creation and participation of global biotech players

• Appropriate technologies to be developed and adapted to local situation

• Urgent need to re-think and introduce new innovation to traditional processes

• Concerted effort crucial to achieve targets set in the national biotechnology road map..
 THANK YOU
alihas@biotech.upm.edu.my

www.biotechcorp.com.my

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