herbal industry potential in malaysia : issues and challenges ... - NRE

HERBAL INDUSTRY
POTENTIAL IN MALAYSIA :
ISSUES
PO
AND CHALLENGES
TO BE A MARKET PLAYER
Ramlan Aziz, Harisun Yaakob, Rohaizan Khairul Anuar,
Jeffrey Samsulbahrin, Mariani bt Abdul Hamid
Institute of Bioproduct Development
Universiti Teknologi Malaysia
www.ibd.utm.my
RAMLAN AZIZ : Director of IBD and Member of Malaysia Herbal Development Board
BIOTECHCORP
BNP LABS

HERBAL INDUSTRY
GROWTH DRIVERS
Health concerns
• Major markets are looking for new ingredients
• Increasing appreciation towards maintaining health with natural products versus curing disease with
chemical drugs
Side effects of drug
• Increasing awareness about side effects of synthetic drugs, e.g. anti-biotic, pain killers
• Increasing cost of drugs and hospitalisation
Higher confidence
• Upward trend of time tested traditional healing
• Scientific validation and quality products of traditional medicines
Competitive pricing
• Herbal extracts and powders are comparatively cheaper than synthetic drugs and formulations
• Act as an alternate for those who cannot afford the synthetic drugs
Demographics
• Growing middle income class
• Increasing aging population and related demands for health solutions: anti-aging, weight control, joint and
bone health, cognition
Source: Burrill & Co 2007; Malaysian Herbal Industry Outlook 2004

Source: WHO

Pulled from the Market
Date
Approved Drug Name Use Risks
Date
Withdrawn
2004
Tysabri
Multiple Sclerosis
Rare, frequently fatal demyleinating disease of CNS
2005
2001
Bextra
Pain reliever
Heart attack/stroke; fatal skin reactions
2005
1999 Vioxx Pain reliever Heart attack/stroke 2004
1997 Baycol Cholesterol Severe damage to muscle, that is
sometimes fatal
2001
1999 Raplon Anesthesia An inability to breathe normally 2001
1993 Propulsid Heartburn Fatal heart rhythm abnormalities 2000
1997 Rezulin Type 2 diabetes Severe liver toxicity 2000
1988 Hismanal Antihistamine Fatal heart rhythm abnormalities 1999
1997 Raxar Antibiotic Fatal heart rhythm abnormalities 1999
1997 Posicor High blood pressure Dangerous interactions with other drugs 1998
1997 Duract Pain reliever Severe liver damage 1998
1985 Seldane Antihistamine Fatal heart rhythm abnormalities 1998
1973 Pondimin Obesity Heart valve abnormalities 1997
1996 Redux Obesity Heart valve abnormalities 1997

UNHEALTHY DIET

Year Government Spent Usage
1995 RM 300 million to procure drugs in
public hospitals (Lek, 2005)
2004 RM 800 million to subsidize 97% of
healthcare cost (NST, 2004)
2010 RM 1200 million to pay for effective drugs ( Hill S,
2010)

BIODIVERSITYOFMALAYSIA
One of the World’s
OLDEST rainforest
One of the 17
Megadiversity
countries
Home to about
12% of all the
plant species on
earth, which has
not been fully
exploited and
cultivated
Estimated
15,000 known
plant species,
3,700 are
known to be
useful, 2,000
species with
medicinal
value and the
balance
remain largely
unexploited

MALAYSIAFORESTHERITAGE
BIODIVERSITY
10 th
In the World
4 th
In Asia
165sp
amphibian
300sp
fish
700sp
birds
350sp
reptiles
300sp
mammals
1200
spesies
with
medicinal
values
15,000
flowering
plants
MICRO
organism
MILLIONS
invertebrate

ESTIMATED GLOBAL MARKET
FOR WELLNESS PRODUCTS
Total market value
>USD1.9 trillion
Value in USD billions
ADAPTED From Dr.John W,Travis’s
Wellness Illness Continuum
Ref: Spas and the Wellness Market: Synergies and Opportunities May 2010
11
, SRI International

Global Market Value of Herbal Industry
USD 5 trillion
USD 160b
USD 200b
USD 60b
Source: World Bank

LOCAL MARKET VALUE
The total value of the domestic market for herbal and medicinal plants is
now estimated to reach up to RM4.55 billion.
TYPE
Flavour & Fragrance
Pharmaceuticals/Nutraceuticals
T/CM and Herbal Rremedies
TOTAL
VALUE (RM)
1.60 billion
0.95 billion
2.00 billion *
4.55 billion
* Based on local T/CM and herbal industry growth rate at 10% annually, it was
estimated that the value of the industry was at RM 7.97 billion in 2006
( Source: MARDI, 1999 )

This is due to concentrated efforts in the primary processing, cultivation and extraction,
but not in other high-value add activities
Value
Level of
activities
in
Malaysia
Ideal curve
Current Malaysia‘s
scenario
+
Increase in value
Increase in value
+
Discovery &
Identification of
Herbal Targets
and IP
Devt of Pre &
Post Clinical
Testing
Primary
Processing of
Herbs
Cultivation
Extract & Product
Development
Special
Formulation &
GMP
Manufacturing
Internationall
Marketing
&
Distribution

In the last 10 years, we have seen an increase in local products registration, but our
products remain in the lower-end of the value chain
Products registered with NPCB, MOH
Percent
100% = 5,019 20,071
Imported
Local
GMP
manufacturers
55
45
40
60
1998 2009
88
175
Status of the
current
Malaysian
herbal industry
Botanical Drugs
Nutraceuticals
Cosmeceuticals
1 month
consumption
RM150 /
bottle
RM120 /
bottle
RM120 /
bottle
Malaysian natural products industry, 2007
Percent
Pharmaceutical
s/
Nutraceuticals
*
Flavor and
fragrances
100% = USD 2.5 billion
35%
19%
46%
Herbal
remedies
Dietary supplements
E.g. pegaga capsule,
garlic, ginseng
Functional foods
E.g. pegaga tea, noni
juice, energy drink
Cosmetics and personal care
E.g. pegaga soap, shampoo
RM80 /
bottle
RM30 /
box
RM10 /
box
* Nutraceutical products not based on Malaysian herbs

ottlenecks.
EPP1:
High value
herbal
products
"The NKEAs will have dedicated focus from the Prime Minister and will have fast-track
mechanisms to resolve disputes or bottlenecks”

•To achieve GNI of RM2.2 billion by
2020
•To produce safe, high quality and
efficacious high-end herbal
products
•To strengthen the supplies across
the value chain
•To enhance R&D in herbs and to
secure the IPR from local herbs

5 Herbal Plants of Focus
Tongkat Ali
Kacip Fatimah
Misai Kucing
Dukung Anak
Hempedu Bumi
Plus 5 Additional Herbal Plants
Pegaga
Ginger
Mengkudu
Roselle
Mas Cotek
Latest addition - BELALAI GAJAH or SABAH SNAKE GRASS

TARGETS
3 herbal
cultivation parks
to produce
herbs on a
commercial
scale
5 botanical
drugs launched
in 2015
5 nutraceuticals
with pre-clinical
claim launched
in 2012

Malaysia is well positioned to
promote the growth and
competitiveness of the herbal
industry
Strengths
• Rich bio-diversity and associated traditional
knowledge of herbs
• Unique and yet to be explored
• Strong research and scientific expertise; good
botanists, biochemists, biologists
• GMP capabilities
• Strong government to drive growth
Opportunities
• Growing international demand; trend for
new/novel/natural healthy products
• Undiscovered herbs potentials
• Alliances/networks with international partners
for better control of supply chain
• Create a unique Malaysia positioning through
geographic indication protection
• Major player of tropical natural product
Weaknesses
• Poor industrial infrastructure (extraction,
monograph, toxicology labs)
• Low sustainability of production
• Low innovation capacities due to scattered funds
and lack of facilities for clinical validation
• Consumer cynicism; lack of information on the
benefits of Malaysian herbs
• Multiple competing stakeholders e.g. government
and regulatory bodies
• Cumbersome and unfriendly regulations and
policies
Threats
• Tainted products (heavy metals & spiked with
illegal ingredients)
• Commoditisation of the functional food,
cosmetics and personal care markets
• Increased regulations in target markets
• Lack of validation tests are threatening
sustainability of production
• Biopiracy limits local innovation and exports
• Competitive from other established traditions e.g.
India and China
• Malaysia has vast
untapped potential in
herbal products
discovery and
development
• The industry is still at
its early stages; the
Health & Wellness
multi-sectorial
segments have not
been fully exploited
• Drug discovery
program using the
herbal products
research and
development platform
has great potential

VALUE CHAIN OF
HERBAL BUSINESS
QUALITY CONTROL
GAP GCP
SALM HALAL
GMP
GLP
HALAL
ISO GMP
HALAL
ISO
Raw material
production
Processing/
Formulation
Manufacturing
Distribution/
Marketing/
Retailing
Consumers
• Consistent quality,
quantity and reliability
• Advanced market
information and outlet
• Increase of
production
technologies
• Selection of herbs
for highest content of
bioactive compounds
•Etc…….
• Standardised materials
•Know ledge in
processing technologies
•Production with high
quality
•Low cost of investment
• New development in
product formulation
•Awareness on new
types of packaging &
labelling technique
•Knowledge on
standardized extracts
•Comprehensive
pharmacopoeia
• Market survey
•Packaging production
design
•Attractive
advertisement
•Product certification
•Franchise modern
retailers
•Partnership
• Education
•Awareness on local
and international
products
CONTINUOUS R&D & HUMAN CAPITAL DEVELOPMENT

Key Enabler
Establishment of Herbal Development Council / Office
▪Empowered to spearhead initiatives
▪One-stop-centre on matters related to
herbal industry
▪Coordinate across all relevant ministries and
agencies
▪Promote smart partnerships between
government and herbal industry
stakeholders

THE CONCEPT: FROM SEED TO SHELF
FARMING
PROCESSING
1
2
PRODUCT MARKETING
PRODUCT FORMULATION
4 3

PRODUCT DEVELOPMENT
PRODUCT
MARKETING
RAW
MATERIAL
SOURCING
PLANTATION
SAFETY
QUALITY
STANDARD
EFFICACY
THE
CHALLENGES
HARVESTING
AND
PROCESSING
MANUFACTURING
PRODUCT
FORMULATION

1
www.ibd.utm.my
ISSUE : RESEARCH AND DEVELOPMENT, ANALYSIS AND
TESTING RELIABILITY
• Continuous and focus, upstream and downstream or
from planting to applications
• To discover novel compounds, to make exact
standardized extracts and to develop pure analytical
standards
• By researchers of high scientific standings
NKEA RESEARCH GRANT
SCHEME (NRGS)
• Identified research gaps
• A more coordinated R&D
work amongst IPTAs/RIs in
partnership with INDUSTRY
or must be MARKET DRIVEN
• Enriched the scientific
contents and literature
especially for local herbs
• Grants are available for
researchers with specific
focus on the scope of
research

5 research clusters setup by
HERBAL DEVELOPMENT
OFFICE (HDO)
HDO provides research grant under NKEA Research Grant Scheme
Discovery Crop Production &
Agronomy
Toxicology / Preclinical
Studies
Standardization
Processing
• Discovery and
identification of new
bioactive compounds as
a result of process of
manipulation in
technique used
• New technique for
discovery of biomarker
• IP on molecules,
indications and genetic
source
• New production and
extraction technology
c/w mechanization and
computerization
• Efficient storage and
post harvest handling
• New Pest and Disease
prevention technique,
• New elite planting
materials, protocols, etc.
• New technique /
process in toxicity
testing or herbal extract
• New technique to
evaluate toxicity or
therapeutic potential of
bioresource;
• Optimize and diversify
related bioassay
protocols
• Establish new standards
of toxicity
• New techniques in
screening and
separation system for
biological entity
• Identification of active
molecular structure
• New purification
technique, etc.
• Novel product
formulation
• Process scaling up and
optimisation
• New technique for
efficient/ optimized
extraction and chemical
analysis of essential oils
• Proprietary extracts and
formulation
IPRs at all level of research and development activities

2
RAW MATERIAL SOURCING
AND PLANTATION

RAW MATERIALS SOURCING
www.ibd.utm.my
8,000,000 handpicked flower for 1kg
of oil
60,000 of flowers = 1 ounce of oil
5,000 kg of petals = 1 kg of essential oil
30kg of roots = 1 kg extract
15 kg of dried leaves = 1 kg extract

RAW MATERIALS SOURCING
www.ibd.utm.my
Issue: Raw Materials : Quantity, Quality, Reliability

PLANTLETS DERIVED FROM TISSUE CULTURE
USING GENETIC ENGINEERING TO PRODUCE FAST GROWING PLANTS
THAT CONTAIN HIGH AMOUNT OF BENEFICIAL PHYTOCHEMICALS ETC.

GOOD AGRICULTURAL AND
COLLECTION PRACTICE
FLOW OF ACTIVITY
1.Plant
identification:
species, variety or
hybrid
2.Locality
identification:
suitability of soil and
climate conditions
3. Propagation
technique
4. Pests and weeds
control and other
contaminants
5. Harvesting
technique
6. Cleaning
(Wash)
technique
7. Drying Method; sun
or oven dry
8. Pack and
storage
Source: Prof Zhari Bin Ismail

Organic Farming
• Horticultural research in the
growing of herbal plants will
emphasize organic farming in
view of consumer demand.
• Quality control, safety and
efficacy issues are vital to the
long-term success of the
herbal products industry.
• In the current industry trend
towards natural ingredients,
organic farming is gaining its
prestige.
(FLAVOURS, March-May 2001)

HIGH VALUE HERBAL PLANTATIONS
GOVERNMENT INITIATIVES

CONTRACT FARMING
FARMER FARMER FARMER FARMER FARMER FARMER
COLLECTION CENTRE COLLECTION CENTRE COLLECTION CENTRE
DISTRIBUTION CENTRE

3
HERBAL AND PHYTOCHEMICAL
PROCESSING

ISSUE : PROCESSING : EXTRACTION AND PURIFICATION
• Utilizing latest and custom design extraction
procedures (no two botanicals are exactly the same)
• Spray, freeze, fluid bed or vacuum dryer
• Extract must match the botanical profile of the
original plants, so that final products are truly as
nature intended

Extraction plant (Perfume Oil)
(2x100ltr)

technology used must be able to produce…
MAXIMUM QUANTITY OF PRODUCTS OF
HIGHEST QUALITY (eg. ACTIVITY) AT THE
LOWEST POSSIBLE COST

4
PRODUCT FORMULATION
AND
MANUFACTURING
QUALITY, STANDARDISATION(EFFICACY), SAFETY AND TRACEABILITY ARE
THE KEY PLATFORMS FOR GLOBAL MARKET ACCEPTANCE

STANDARDIZATION
PROCESS OF PRODUCING HERBAL EXTRACTS OR
PHYTOCHEMICALS IN WHICH PRODUCT POTENCY
IS GUARANTEED THROUGH CONSISTENCY IN
ACTIVE COMPOUND CONTENT LEVEL

CHEMICAL PROFILE FOR STANDARDISATION
Tongkat Ali
High Perfomance Liquid
Chromatography (HPLC)
Pegaga
HPLC Profile

www.ibd.utm.my
ISSUE : PRODUCT FORMULATIONS FOR DOWNSTREAM APPLICATIONS
• Extracts (solid, fluid or powdered) can be used as ingredients for vitamin,
pharmaceutical, cosmetic, food and beverages companies locally and
worldwide
• Promoting consumer products formulated from these extracts ; higher added
value

GOOD MANUFACTURING PRACTICE (GMP)
Good Manufacturing Practice ( GMP ) guidelines is to ensure that
products are consistently manufactured and controlled to the specified
quality. It is concerned with all aspects of production and quality
control.
Countries
Australia
Austria
Belgium
Malaysia
Types of certification & its recognized bodies
-GMP (for anti-perspirant and sunscreen only) by TGA ( Therapeutic Goods
Administration)
- License to Manufacture by TGA
Self issued CFS endorsed by F.C.I.O- Fachverband der Chemischen Industrie
Osterreich
-GMP by Belgium Ministry of Public Health
- self-issued GMP endorsed by Ministere Des Affaires Sociales De la Sante Et De
D’Environnement and Inspection des Denrees Alinmentaires
-Ministry of Health
-National Pharmaceutical Control Bureau

5
PRODUCT MARKETING

HERBAL PRODUCTS IN MALAYSIAN MARKET

MODERN HERBAL OUTLET
HIMALAYA, KLCC

Ref : ETP ANNUAL REPORT 2011
GOVERNMENT INVESTMENTS IN
PRECLINICAL AND CLINICAL TRIALS BY
ANCHOR COMPANIES (2011)

HIGH VALUE
HERBAL
PRODUCTS
NKEA AGRICULTURE
RE
HERBS SUB-SECTOR
has approved a grant
of RM9.8 million.
PROPOSAL
CLINICAL TRIALS FOR
ANTI-AGING SERUM
from
KACIPFATIMAH
PHYTO BIZNET
SDN BHD
(651345-K)
MASCOTEK
WHITENING SERUM

CURRENT KACIP FATIMAH EXTRACT BASED PRODUCT
NATURAL
NON-TOXIC
HALAL
FEATURES
Water-based Formulation
Liposome Delivery System
UVB / UVA Protected
BENEFITS
70% more effective in preventing
skin aging compared to vitamin C
7% increase in elasticity in 7 days
17% increase in elasticity in 28 days

GNI CONTRIBUTION
2010 - 2020
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
GNI/
USD
- 0.297 0.424 0.625 0.837 2.384 4.296 5.854 7.142 8.870 10.89
Total GNI 2010 – 2020 = USD 41.619
GNI CONTRIBUTION
USD 10.9 millions
by the year 2020
INVESTMENT REQUIRED :
(Private & Public)
EXPECTED JOBS CREATED : 412

INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
ACTUAL DOSAGE NEEDED
• Based on this in-vitro data, if we want to produce 1 kg of L.
pumila serum/cream or any cosmeceutical skin care product,
the amount of L. pumila standardize extract needed is only
about 0.01 g.
• For F. deltoidea, the highest concentration (dosage) that can
be used for the production of 1 kg of any cosmeceutical
formulation is about 1 g standardize extract.
• To produce the same amount of cosmeceutical formulation,
only 0.005 g pure extract alpha mangostin from mangosteen
pericarp needed.
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INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
Summary
Antiaging Novel Cosmetic Actives
- Labisia pumila water extract
- Ficus deltoidea water extract
Whitening Novel Cosmetic Actives
- Ficus deltoidea water extract
-α-mangostin
Melanogenic Cosmetic Active
- Mangosteen leaf water extract
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CONTINUOUS ACTIONS
BY THE GOVERNMENT
•CONTINUOUS R&D PROMOTION AT IHLs and RIs
•DEVELOPING RELEVANT HUMAN CAPITAL
•PROVIDING PROBUSINESS ENVIRONMENT WITH APPROPRIATE
INFRASTRUCTURE SUPPORTS AND INCENTIVES FROM
‘SEED TO SHELF’
•CREATE ONE STOP CENTRE TO DEAL ALL ISSUES PERTAINING
TO THE INDUSTRY
•DYNAMIC REGULATORY BODY TO PROMOTE HIGH STANDARD TO
LOCAL INDUSTRY IN FACING GLOBAL CHALLENGES. AND BETTER
ENFORCEMENT TO WEEDOUT THE BLACK SHEEP

CONTINUOUS ACTIONS
BY THE INDUSTRY
•CONTINUOUS R&D EFFORT TO ADD VALUE TO THE PRODUCTS
AND TO COMPLY WITH INTERNATIONAL STANDARDS
•CONTINUOUS HUMAN CAPITAL DEVELOPMENT
•PROMOTE GLOBAL BRANDING AND MARKETING STRATEGY
•HALAL AND EFFECTIVE PRODUCTS FOR
THE VAST MUSLIM MARKET
•PROMOTE IHLS AND RIs – INDUSTRY COLLABORATION
•USE LOCAL RAW MATERIALS AND EXPERTISE
•PROMOTE ETHICAL BUSINESS AND WEEDOUT THE BLACK SHEEP
periodic negative press or concern regarding safety & efficacy
of herbal medicine largely because of fraudulent claims
& unscrupulous manufacturers

CONTINUOUS ACTIONS
BY THE CONSUMERS
•CONTINUOUS AWARENESS ON PLANT BASED HEALTH AND BEAUTY PRODUCTS THROUGH
EDUCATION
•NOT TO BE TAKEN FOR A RIDE BY SALES GIMMICK
•BE EYES AND EARS FOR THE REGULATORY AUTHORITIES
•USE HALAL AND EFFECTIVE PRODUCTS
•AVOID ‘FAST SYNDROME’: ANYTHING FAST, FAST TO THE GRAVE
•BUY LOCAL PRODUCTS IF YOU CAN IN ORDER TO SUPPORT THEIR GROWTH AND HOPE TO
BECOME A GLOBAL PLAYER

www.cepp.utm.my
Institute of Bioproduct Development
Universiti Teknologi Malaysia
(formerly known as CEPP)

CONCLUSION
PHYTOCHEMICAL (HERBAL) INDUSTRY WILL BE THE NEXT
MULTIBILLION INDUSTRY. EVERY EFFORT MUST BE FOCUSSED IN
TURNING INDUSTRY UNIQUE TO THIS BIODIVERSE COUNTRY OF OURS.
THIS INDUSTRY WILL PROMOTE WELLNESS PRODUCTS UTILISING
OUR BEAUTIFUL AND RICH FLORA AND FAUNA, AND ENSURE
OUR FUTURE GENERATIONS WILL HAVE THE SAME OR BETTER
OPPORTUNITIES TO LIVE IN A PEACEFUL, HEALTHY AND SUSTAINABLE
ENVIRONMENT.

INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
Our Vision
To be an innovative leader in bioproduct
research and development.
Our Mission
To develop innovative market driven
bioproduct to promote and enhance
wellness and healthy living deriving from
natural resources through
sustainable processes and creating
wealth for the nation.
Research Theme
Biotechnology for Wellness Industry
www.ibd.utm.my
BIOTECHCORP ISO/IEC 17025
INSPIRING CREATIVE & INNOVATIVE MINDS

INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
IBD’s Technological Platform
BIOPROCESSING
HERBAL & PHYTOCHEMICAL
BIOVALIDATION
Fermentation, microbiology,
downstream
processing, cell culture
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Extraction, purification,
steam distillation
Metabolites profiling and
safety & efficacy
assessment

INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
Equipments & Facilities
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INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
T h a n k Y o u
N23a
N22
To explore your research and commercial opportunities please contact :
INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
81310 UTM Skudai
Johor Darul Takzim.
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Tel : 07-5532499 Fax : 07-5569706
E-mail : ramlan@ibd.utm.my /marketing@ibd.utm.my

THANK YOU , TERIMA KASIH
ramlan@lojipandu.utm.my
65