PO

Ramlan Aziz, Harisun Yaakob, Rohaizan Khairul Anuar,

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




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

Drug Name

Use

Risks
Date
Withdrawn
2004
2001
Tysabri
Bextra
Multiple Sclerosis
Pain reliever
Rare, frequently fatal demyleinating disease of CNS

Heart attack/stroke; fatal skin reactions
2005
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
Pulled from the Market

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 Worlds
OLDEST rainforest
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
Home to about
12% of all the
plant species on
earth, which has
not been fully
exploited and
cultivated
One of the 17
Megadiversity
countries
MALAYSIAFORESTHERITAGE
B
I
O
D
I
V
E
R
S
I
T
Y

10
th

In the World
4
th

In Asia
1200
spesies
with
medicinal
values
15,000
flowering
plants
300sp
mammals
700sp
birds
350sp
reptiles
165sp
amphibian
300sp
fish
MILLIONS
invertebrate
MICRO
organism
11

1
ADAPTED From Dr.John W,Traviss
Wellness Illness Continuum
Value in USD billions
ESTIMATED GLOBAL MARKET
FOR WELLNESS PRODUCTS
Total market value
>USD1.9 trillion

Ref: Spas and the Wellness Market: Synergies and Opportunities May 2010
, SRI International
USD 60b
USD 160b
USD 200b
USD 5 trillion
Source: World Bank
Global Market Value of Herbal Industry
The total value of the domestic market for herbal and medicinal plants is
now estimated to reach up to RM4.55 billion.
TYPE VALUE (RM)
Flavour & Fragrance 1.60 billion
Pharmaceuticals/Nutraceuticals 0.95 billion
T/CM and Herbal Rremedies 2.00 billion
TOTAL 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
*
*
LOCAL MARKET VALUE
( Source: MARDI, 1999 )
+
Discovery &
Identification of
Herbal Targets
and IP
Devt of Pre &
Post Clinical
Testing
Cultivation Primary
Processing of
Herbs
Extract & Product
Development
Internationall
Marketing
&
Distribution
Special
Formulation &
GMP
Manufacturing
Increase in value Increase in value
+
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
Current Malaysias
scenario
Ideal curve
19%
46%
35%
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
Local
1998 2009
45
60
55
40
Imported
100%= 5,019 20,071
Products registered with NPCB, MOH
Percent
88
GMP
manufac-
turers
175
Cosmeceuticals
Botanical Drugs
E.g. pegaga soap, shampoo
E.g. pegaga tea, noni
juice, energy drink
E.g. pegaga capsule,
garlic, ginseng
Nutraceuticals
Dietary supplements
Functional foods
Cosmetics and personal care
RM150 /
bottle
RM120 /
bottle
RM120 /
bottle
RM10 /
box
RM30 /
box
RM80 /
bottle
Malaysian natural products industry, 2007
Percent
Flavor and
fragrances
Pharmaceutical
s/
Nutraceuticals
*
Herbal
remedies
100%=USD 2.5 billion
* Nutraceutical products not based on Malaysian herbs
1 month
consumption
Status of the
current
Malaysian
herbal industry
bottlenecks.
EPP1:
High value
herbal
products
"The NKEAs will have dedicated focus fromthe 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
Tongkat Ali
Mas Cotek
Hempedu Bumi Misai Kucing
Dukung Anak
Kacip Fatimah
Roselle
Mengkudu Ginger
Pegaga
Plus 5 Additional Herbal Plants
5 Herbal Plants of Focus
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




Strengths Weaknesses
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
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
Opportunities Threats
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

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
Malaysia is well positioned to
promote the growth and
competitiveness of the herbal
industry




Raw material
production
Processing/
Formulation
Manufacturing g
Distribution/
Marketing/
Retailing
/
Consumers
QUALI TY CONTROL
CONTI NUOUS R& D & HUMAN CAPI TAL DEVELOPMENT
GLP
HALAL
GMP ISO GMP
HALAL
GCP GAP
SALM HALAL
VALUE CHAIN OF
HERBAL BUSINESS
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
ISO

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
Key Enabler
Establishment of Herbal Development Council / Office
THE CONCEPT: FROM SEED TO SHELF
FARMING
PROCESSING
PRODUCT FORMULATION
PRODUCT MARKETING
1
4
3
2
PRODUCT DEVELOPMENT
THE
CHALLENGES
PLANTATION
RAW
MATERIAL
SOURCING
SAFETY
QUALITY
STANDARD
EFFICACY
PRODUCT
FORMULATION
PRODUCT
MARKETING
HARVESTING
AND
PROCESSING
MANUFACTURING
www.ibd.utm.my
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
ISSUE : RESEARCH AND DEVELOPMENT, ANALYSIS AND
TESTING RELIABILITY
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
1




Discovery Crop Production &
Agronomy
Toxicology / Pre-
clinical 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
5 r esear ch cl ust er s set up by
HERBAL DEVELOPMENT
OFFI CE (HDO)
HDO provides research grant under NKEA Research Grant Scheme
RAW MATERIAL SOURCING
AND PLANTATION
2
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
RAW MATERIALS SOURCING
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)
GOVERNMENT INITIATIVES
HIGH VALUE HERBAL PLANTATIONS

CONTRACT FARMING
DISTRIBUTION CENTRE
COLLECTION CENTRE COLLECTION CENTRE COLLECTION CENTRE
FARMER FARMER FARMER FARMER FARMER FARMER
HERBAL AND PHYTOCHEMICAL
PROCESSING
3
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)
MAXIMUM QUANTITY OF PRODUCTS OF
HIGHEST QUALITY (eg. ACTIVITY) AT THE
LOWEST POSSIBLE COST
technology used must be able to produce
PRODUCT FORMULATION
AND
MANUFACTURING
4
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
High Perfomance Liquid
Chromatography (HPLC)
HPLC Profile
Tongkat Ali Pegaga
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 Types of certification & its recognized bodies
Australia -GMP (for anti-perspirant and sunscreen only) by TGA ( Therapeutic Goods
Administration)
- License to Manufacture by TGA
Austria Self issued CFS endorsed by F.C.I.O- Fachverband der Chemischen Industrie
Osterreich
Belgium -GMP by Belgium Ministry of Public Health
- self-issued GMP endorsed by Ministere Des Affaires Sociales De la Sante Et De
DEnvironnement and Inspection des Denrees Alinmentaires
Malaysia -Ministry of Health
-National Pharmaceutical Control Bureau
PRODUCT MARKETING
5
HERBAL PRODUCTS IN MALAYSIAN MARKET
MODERN HERBAL OUTLET
HIMALAYA, KLCC
GOVERNMENT INVESTMENTS IN
PRECLINICAL AND CLINICAL TRIALS BY
ANCHOR COMPANIES (2011)
Ref : ETP ANNUAL REPORT 2011
HIGH VALUE
HERBAL
PRODUCTS
NKEA AGRICULTURE NKEA AGRIC RICULTURRE CU RIC RE
HERBS SUB-SECTOR
has approved a grant
of RM9.8 million.
PHYTO BIZNET
SDN BHD
(651345-K)
PROPOSAL
WHITENING
MASCOTEK
SERUM
ANTI-AGING
KACIPFATIMAH
from
SERUM
CLINICAL TRIALS FOR
CURRENT KACIP FATIMAH EXTRACT BASED PRODUCT
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
BENEFITS
HALAL NON-TOXIC NATURAL
Water-based Formulation
Liposome Delivery System
UVB / UVA Protected
FEATURES
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
GNI CONTRIBUTION
2010 - 2020
GNI CONTRIBUTION
USD 10.9 millions
by the year 2020
INVESTMENT REQUIRED :
(Private & Public)
EXPECTED JOBS CREATED : 412
Total GNI 2010 2020 =USD 41.619




INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
Copyright of IBD
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.

ACTUAL DOSAGE NEEDED
INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
Copyright of IBD
Summary
Antiaging Novel Cosmetic Actives
- Labisia pumila water extract
- Ficus deltoidea water extract

Whitening Novel Cosmetic Actives
- Ficus deltoidea water extract
--mangostin

Melanogenic Cosmetic Active
- Mangosteen leaf water extract

CONTINUOUS ACTIONS
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

BY THE GOVERNMENT

CONTINUOUS ACTIONS
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
BY THE INDUSTRY

CONTINUOUS ACTIONS
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

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

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.

CONCLUSION
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
Copyright of IBD
IBDs Technological Platform
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h fIBD
Fermentation, microbiology,
downstream
processing, cell culture
Extraction, purification,
steam distillation
Metabolites profiling and
safety & efficacy
assessment
INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
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Equipments & Facilities
INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
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Toexploreyour research and commercial opportunities pleasecontact :
INSTITUTE OF BIOPRODUCT DEVELOPMENT
Universiti Teknologi Malaysia
81310 UTM Skudai
Johor Darul Takzim.
Tel : 07-5532499 Fax : 07-5569706
E-mail : ramlan@ibd.utm.my / marketing@ibd.utm.my
T h a n k Y o u
N22
N23a
65
THANK YOU , TERIMA KASIH
ramlan@lojipandu.utm.my