Going global in nutraceuticals
Dr. Fadhlullah Suhaimi Abdul Malek, Director, Agriculture National Key Economic Area (NKEA)
(Advertorial)
The next time you reach for a teabag of Tongkat Ali, are you sure that you will be getting the full benefit of the vitality-boosting supplement? Or are you at risk of drinking something made from a teabag full of flavoured sawdust?
As one of just 12 centres of mega-bioversity in the world, it’s no surprise that Malaysia boasts as many as 1,099 businesses selling herbal products. And it’s also no surprise that the vast majority of these businesses have not had their product health claims scientifically backed and tested.
From the aphrodisiac Tongkat Ali, whose fame has already reached Western shores, to the potential cancer-fighting properties of Misai Kuching, local herbal products have traditionally been sold as teas and drinks.
The real commercial potential however lies in the fast growing global natural healthcare space which includes botanical drugs. The global nutraceutical market is expected to expand from US$142.1 billion in 2010 to US$204.8 billion by 2017, growing at CAGR (Compound Annual Growth Rate) of 6.3 per cent (Source: Transparency Market Research, USA).
Countries that are best positioned to take advantage of the interest in natural health products are those that have adopted and promoted industry standards that make it easy for businesses to develop and certify herbal products as pharmaceutical grade products that can find worldwide acceptance.
It would be a shame if Malaysia, with its ancient rainforests and biodiversity, is unable to capitalise on the opportunity to tap into the growing global interest in the healing properties of plants.
To this end, as part of the Economic Transformation Programme’s (ETP) Agriculture National Key Economic Area, there is an Entry Point Project (EPP) that aims to turn Malaysia into a leading supplier of world-class, high-quality nutraceutical products.
The scope of the EPP includes taking local herbal supplement companies to the stage where their products have gone through pre-clinical and clinical trials and their benefits can be scientifically substantiated.
The EPP is focused on 10 herbs and targets to successfully bring to market 10 nutraceuticals and 5 botanical drugs by 2020. Currently, 12 Malaysian companies are participating in the EPP to achieve this end and aiming higher.
The financial upside for businesses to move from mere herbal teas to pharmaceutical grade supplements can be massive. Customers are willing to pay over a hundred ringgit for a bottle of scientifically tested nutraceuticals as opposed to as little as RM5 for a box of herbal tea.
Generally speaking, the raw material for herbal supplements costs an average of RM1-2 per kg while the going rate for standardised herbal extracts is about RM2,800 per kg. Highest up the value chain however, is the nutraceutical, which can retail for well over a hundred ringgit per bottle. Botanical drugs are expected to retail at over RM500 per bottle.
The ETP therefore has mapped out a path to take Malaysian companies further up the value chain from mere growers and purveyors of herbals teas to global suppliers of high value pharmaceutical grade herbal products where they can derive the most economic benefit.
In terms of progress, since the start of Economic Transformation Programme in late 2010, there have been 11 pre-clinical trials and 4 clinical trials undertaken as at the end of 2013 while 2014 will see 2 pre-clinical trials and 6 clinical trials.
In 2012, our pre-clinical trial laboratories at Institute of Medical Research, SIRIM and Malacca Biotech were officially certified as OECD accredited Labs. What this means for the industry is that by doing the test here in Malaysia, the results will be recognised by OECD countries making it much easier to penetrate such markets.
To support the EPP, an integrated value chain approach has been undertaken. On the supply side fourteen herbal clusters and two large-scale herbal cultivation parks have also been identified to ensure the consistent supply of herbal raw material. The discovery phase is covered by R&D clusters formed to cover the areas of discovery, crop production and agronomy, standardisation and product development, toxicology/pre-clinical and clinical studies, and processing technology. Whilst on marketing, close relationships with marketing agencies like MATRADE help facilitate and support introduction of such products overseas.
If all goes smoothly, the High-Value Herbal Products EPP is expected to generate some RM2.2 billion in additional gross national income (GNI) by 2020 while providing the marketplace with quality botanically derived products that have had their safety and efficacy tested.
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