Industrial BiotechnologyIndustrial Biotechnology

in Malaysiain Malaysia

1

MohdMohd Ali HassanAli HassanDean, Dean, BioTechBioTech

University Putra MalaysiaUniversity Putra Malaysia

Wan Abdul Wan Abdul RahamanRahaman Wan Wan YaacobYaacobChief Operating OfficerChief Operating OfficerBiotechCorpBiotechCorp, Malaysia, Malaysia

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

3

►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

Oversight & Direction

International Advisory Panel

Implementation Council

Prime Minister

“Cabinet Level”

Ministry of ScienceTechnology & Innovation

(MOSTI)

Board of Directors

Ministry of FinanceMinistry of Finance

Khazanah NasionalKhazanah NasionalBerhadBerhad

Cluster Working Groups “Officials Level”

BioBio--TechnologyTechnology

•• BiologyBiology = study of living systems (life sciences)

•• TechnologyTechnology = application of science to produce useful products and/or services

•• BiotechnologyBiotechnology = technology which utilizes living organisms and their biological processes for the production of products and services

•• Traditional biotechTraditional biotech – enzyme, fermentation, bioprocess engineering

•• Modern biotechModern biotech – application of molecular techniques as tools for new/improved products and servicesproducts and services

The Circles of BiotechnologyThe Circles of Biotechnology

Bioprocess EngineeringBioprocess Engineering

EnzymeEnzyme FermentationFermentationEnzymeEnzyme FermentationFermentation

BiotechnologyBiotechnology

BiochemistryBiochemistry MicrobiologyMicrobiology

Molecular BiologyMolecular Biology

Colours of BiotechnologyColours of Biotechnology

•• Red Biology Red Biology : : medical /biomedical / healthcaremedical /biomedical / healthcare

•• Green Biotechnology Green Biotechnology : : agriculture / crop productionagriculture / crop production

•• Blue Biotechnology Blue Biotechnology : : marinemarine•• Blue Biotechnology Blue Biotechnology : : marinemarine

•• White Biotechnology White Biotechnology : industrial / environmental / microbial : industrial / environmental / microbial

Industrial Industrial (White) (White) BiotechnologyBiotechnology

• 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• improved recovery processes

• biosubstitution

• bioremediation

• waste and wastewater treatment

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

biotechnology as a new engine of growth!biotechnology as a new engine of growth!

• 9 thrusts – leveraging on our areas of strength»» agriculture biotechnologyagriculture biotechnology

»» healthcare biotechnologyhealthcare biotechnology

»» industrial biotechnologyindustrial biotechnology

National Biotechnology Policy (2005)

9

»» industrial biotechnologyindustrial biotechnology

• The national biotech road map..

Phase 2Phase 22011-2015

Science to Business

Phase 1Phase 12005-2010

Capacity Building

Phase 3Phase 32016-2020

Global Presence

BiotechCorp BioNexus

R&D&C Funds

ProductsTechnologyIndustry/Jobs

LicensingInnovation

Global Companies

www.mosti.gov.my

Thrust 1Agriculture BiotechDevelopment

Thrust 2Healthcare BiotechDevelopment

Thrust 9Government Supportand Commitment

99

National Biotechnology Policy

NBP launched in 2005

10

3

Thrust 3Industrial BiotechDevelopment

Thrust 4R&D and Technology \Acquisition Development

Thrust 5Human CapitalDevelopment

Thrust 6Financial Infrastructure

Development

Thrust 7Legislative and RegulatoryFramework Development

Thrust 8Strategic Development 99

ThrustsThrusts

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

With BioNexus status comes:

11

With BioNexus status comes:

� Support and assistance (BNP)

� Funding support (BCG)

� Programmes designed to build capacity

Biotechnology Focus Areas

BIOETHANOL

BIOFUEL

HydrocarbonMunicipal

BIOREMEDIATION

BIODIESEL

BIOGASIndustrial

FINE & SPECIALTY CHEMICAL

Chemicals

Nutraceuticals Pharma product

13

1

BIOMATERIAL

Compounding/moulding

Poly HydroxyAlkanoates

(PHA)

Biodegradable polymer

from agri-biomass Industrial

BIOCATALYST

New discovery

Feed & Food

Food

Poly Lactic Acid

(PLA)

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)

14

(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

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

15

Herbal extract and bioactive compound markets US$11 billion per year

globally (2009 estimate)

Source of usefulmicrobes, enzymesand bioremediation

system

Strength #2

Palm Oil

2. Feedstock availability

Palm Biomass

Types % of Fresh Fruit Production (million

16

Types % of Fresh Fruit

Bunches (FFB)

Production (million

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

Strength #3

3. Economic and Political stability

17

Government Vision & Support(pro-business)

Strong Economic Structure “Strong FDI Growth at 53.4%

in 2008” - UNCTAD

Ministry of Energy, Green Technology and Water

National Green Technology Policy (2009)

Empty fruit bunch (EFB) has the highest commercial potential

(no collection cost, currently very much under-utilised)

Can generate 1.2 billion liters of bioethanol

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

Total volume of gasoline sold was 11.4 billion liters in 2008

18

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)

Primarily an export-oriented industry, using RBDPO and CPO (later jatropha oil)

Palm methyl ester, as blends in transport fuel

Production has slowed down in 2009 due to

low demand

higher price than crude oil *

Strategies

feedstock diversification

multiple-feedstock processing

4.48 million hectares of oil palm land

19

Strategies multiple-feedstock processing

new uses of biodiesel by-product

Biodiesel producing capability is 10.2 million tons/year(90 companies

licensed)Currently – 12 biodiesel plants with 1.5 million

tons capacity

500,000 tons CPO yearly commitment for B5, from 2010

* Note: CPO is ~USD 580/tonne; crude oil is ~USD 440/tonne @ USD 60/barrel

POME or MSW CH4 electricity

Green and Renewable!Green and Renewable!

20

POME or MSW H2 home type fuel cells, automobiles

Future Potential

CDM as incentive..CDM as incentive..

TNB Jana Landfill Project (2 MW)

The 1st grid-connected renewable energy project in Malaysia

2 MW installed 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 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

soil

remediation

water, river and sewerage

treatment

solid

waste treatment

removal of

toxic metals

23

hydrocarbon-degrading microbes phytoremediation

Potential New Industries

Current

Focus

feedstocks from palm

oil, POME and

currently conducting

feasibility study

PHA PHBV

Malaysia is one of the world’s biggest manufacturers and

exporters of plastic products, with 1,500 manufacturers

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

24

Focusoil, POME and

jatropha oil

feasibility study

feedstock from starchfeedstock from

CPKO

PLAPHBHX

Malaysia, China and Thailand account for 80% of all plastic

bags exported to Europe

Malaysia is a net enzyme importer

2008 – US$14 million

Va

lue

(R

M m

illi

on

)

*US$1.00 = RM3.50

25

No large scale manufacture due to

lack of experience on scale-up operations

limited fermentation infrastructure

high cost of setting up commercial scale facility

Year

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

26

Xylanase Aspergillus niger

Lignin degrading enzymes, (lignin peroxidase, manganese peroxidase, and laccase)

Phanerochaete chrysosporium, Humicola grisea

Tannase Aspergilus niger

Mannanase Aspergilus niger

Phytase Aspergilus niger

Chitinase Fusarium sp.

Malaysia’s Chemical Industry

Petroleum Products &

Natural

Chemicals& Chemical

Rubber Products

Plastic Products

Structure of Malaysia’s Chemical Industry

27

Natural Gas

& Chemical Products

Agricultural chemetic: pesticides fertilizers

Soap detergent

cosmetic & toiletry

preparation

Inorganic Chemicals

Industrial Gases

Oleo-chemicals

Products

Natural Rubber Latex

Latex Threads

Products

Plastic Resins

consists of bulk chemicals, specialty chemicals

and fine chemicals industries

BioBio--based and green chemicals?based and green chemicals?

Common Technologies

thermochemical

conversion

extraction and

treatment of

plant materials

28

extraction and

purification

Use of biomass?Use of biomass?

Herbal products types whole extracts

pure phytochemicals

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

Malaysia’s Strength

Herbal extraction & Oleo-chemicals

29

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

Frost & Sullivan –“Nutraceuticals market in Malaysia is forecast to reach US$ 2 billion

in 2020”

Herbal-based medicines market size could reach

between RM 4.5-5 billion/year and to double by

2010, and expected to reach RM 12 billion in 2012

OleoOleo--chemical chemical

ProductsProducts

glycerine

methyl ester

fatty alcohol

fatty acids

ester manufacturing

30

methyl esterfatty acids

Special Case Study

-- THE PALM OIL INDUSTRY THE PALM OIL INDUSTRY --

31

-- THE PALM OIL INDUSTRY THE PALM OIL INDUSTRY --

• Merging the 3Ps

• Towards sustainability

>>> win-win-win strategy

The 3 Ps – Profit, People and Planet

Profit

People Planet

Sustainable

Development

“ Biotechnology for Sustainable Development ”“ 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 - 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

Oil ExtractionCrude Palm Oil

16 million tonnes

Palm Kernel Oil

2 million tonnes 16 million tonnes2 million tonnes

Palm Oil Mill Effluent

50 million tonnes

Empty Fruit Bunches

16 million tonnes

Fiber

9 million tonnes

Shell

4 million tonnes

Renewable Resources

Trunks8 million tonnes

Fronds13 million tonnes

Adding Value to Palm Biomass

• Paradigm shift towards biomass– Not waste

– Renewable

– Sustainable

– Under-utilised resource

• Uncertainties of biomass– Technological proven ?– Technological proven ?

– Economically feasible ?

– Quality and quantity ?

– Availability & distribution ?

� value chainfine chemicals

food

fiber

feed

fuel

Palm Biomass Refinery - New Business & Products

Empty Fruit Bunch

15 million t/yrPalm Oil Mill Effluent

50 million t/yr

Standardised biomass available

“business as usual”

Bioplastic (PLA) “zero emissionzero emission”

Sugars

and Bioethanol

Pre-treatment and

Saccharification

Fermentation in bioreactors

Biomass Energy

Bio-acids

Bioplastic

(PHA) Biogas, CH4 (+ Biohydrogen)

wastewaste--toto--wealthwealth

++ water recyclingwater recycling↓↓↓↓↓↓↓↓ water footprintwater footprint

Compost

K recycleK recycle

Bioplastics from Palm Biomass

Concentrationof biomass

Oil Extraction

Palm Oil Mill Effluent

Bio-acids Plant

Bioplastics(PHA)

Plastic pellets

Consumerproducts

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Biodegradation

CO2, H2O

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Photosynthesis

Biodegradation

CO2, H2O

Carbon cycle of bioplastics

CHO

Photosynthesis

Biodegradation

CO2, H2O

POME acids

Chemical recycling of PHA

Monomer

CopolymersCopolymers

OthersOthers

Biomass

(fermentation)

Depolymerisation

Biomass

(fermentation)

Biomass

(fermentation)

Biomass

(fermentation)

Biomass

(fermentation)PHA

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 5.0Total 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 0.4Yearly 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 new biomass 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 YOUalihas@biotech.upm.edu.myalihas@biotech.upm.edu.my

43

alihas@biotech.upm.edu.myalihas@biotech.upm.edu.my

www.biotechcorp.com.mywww.biotechcorp.com.my