MALAYSIA’S total private investments surged to a record RM139.5 billion last year.
This is 24.8 per cent up from 2011, according to Minister of International Trade and Industry Datuk Seri Mustapa Mohamed, during the Investment Performance 2012 Conference in February.
Equally remarkable was that 78 per cent of the total investments approved were domestic investments, and only 22 per cent were foreign direct investments (FDI).
The increase in domestic investments is in line with the Economic Transformation Programme (ETP), which is likely to be on the right track.
It is important to note that biotechnology was among new and emerging technologies that attracted FDI, contributing 70 per cent to the total investments in this sub-sector.
In contrast, the overall investment was only 22 per cent FDI. Leveraging on this solid performance, the 2015 target for investment was revised almost three-fold to RM26 billion from the earlier target of RM9 billion.
This was announced by BiotechCorp, an agency entrusted with, among others, the mandate to promote FDI in biotechnology.
Among last year’s major FDIs in biotechnology were the joint investments from CJ CheilJedang (CJ) of South Korea and Arkema of France for an RM2 billion plant in Terengganu for the manufacture of L-methionine, an amino acid commonly used in animal feed.
One of the possible feedstock for this is the petai belalang (Ieucaena leucocephala), a common legume grown by locals for feeding ruminants. Now with the CJ-Arkema investment, the humble petai belalang could move up the value chain, at least in the East Coast Economic Region (ECER).
In support of this investment, the Malaysian government has initiated a plan to grow 10,000ha of the crop. Local growers could also sell the plant to CJ-Arkema or other companies in the ECER. The cellulosic biomass of the plant could also be used in the manufacture of solvents, bio-plastic and other products.
What triggered the interest of CJ-Arkema in Malaysia might be the strategic location of the country since their target is the Asian animal feed market. The strong government initiatives to attract FDI and support offered to multinational companies may have contributed to their investment.
In Malaysia, biotechnology has come a long way since the formation of the National Biotechnology Directorate in 1995. The then prime minister, Tun Dr Mahathir Mohamad, saw biotechnology as a sector that could leverage the country’s diversified bio-resources.
Nonetheless, it was 10 years later that biotechnology was given the much needed boost when Tun Abdullah Ahmad Badawi announced that it would be the engine for economic growth. This was followed by the swift tabling of the National Biotechnology Policy and the establishment of the National Biotechnology Division and BiotechCorp in 2005 and BioNexus Malaysia the following year to provide financial assistance to biotechnology start-ups.
By 2011, with various FDIs established and more than 200 BioNexus companies in various stages of development, Prime Minister Datuk Seri Najib Tun Abdul Razak accentuated the role of biotechnology as a contributor to the nation’s economic output. The BioEconomy Transformation Programme was initiated to enhance and complement the ETP.
We should also note that other corridors in the country are having success too. Last year, the Sabah Development Corridor came up top with a total of RM5 billion in investments while the Sarawak Corridor of Renewable Energy (SCORE) was not far behind with RM4.7 billion, according to the Malaysian Investment Development Authority.
SCORE has at least 10 priority sectors and among them the palm oil, fishing and aquaculture, livestock and timber-based industries may have the potential in drawing biotechnology-related FDI.
In the first quarter of this year, there has already been at least one FDI in Malaysia. UK-based Biofuture International Plc was reported as having raised RM151 million to acquire Platinum NanoChem Sdn Bhd, a Malaysian biofuel specialist.
In this case, the focus is graphene, a nanotechnology product similar to graphite. Graphene could be produced from feedstock waste derived from biogas generated from palm oil mill effluents.
With the biotechnology sector looking set to sail further on a strong FDI wind and gathering momentum, let’s hope it will contribute to the re-structuring of the socioeconomic landscape of Malaysia by 2020.
Dr Daniel Tan is a lecturer with the Faculty of Engineering, Science and Computing at Swinburne University of Technology Sarawak Campus.