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Palm Oil and Government Funds Boost Malaysian Pharma Sector

Many attendees at this year's Pharma+Bio Asia 2016 event confessed themselves somewhat disappointed with the overall slowdown in the sector, a situation only alleviated slightly by government incentives and the flourishing palm oil sector.

Photo: Palm fruits: The last, best hope for Malaysia’s pharmaceutical sector.
Palm fruits: The last, best hope for Malaysia's pharmaceutical sector.
Photo: Palm fruits: The last, best hope for Malaysia’s pharmaceutical sector.
Palm fruits: The last, best hope for Malaysia's pharmaceutical sector.

According to exhibitors at Pharma+Bio Asia 2016, sluggish growth within energy-exporting Malaysia has hit the country's pharmaceutical market particularly hard. For many, low attendance by both exhibitors and delegates at this year's event was symptomatic of the general despondency within the industry.

This year's two-day event saw four previously standalone exhibitions combined into one – Lab Tech Asia 2016, Natural Products & Herbs Asia 2016, Pharma+Bio Manufacturing Asia 2016 and PharmaTech 2016. Despite the comprehensive scope of this amalgamated show, a number of attendees confessed themselves disappointed by the relatively poor showing of pharmaceutical companies and international visitors.

Albert Lim is the Sales Manager for Anton Paar Malaysia, the local subsidiary of an Austrian company specialising in laboratory instruments, process measuring systems and automation technology. Voicing the concerns of many, Lim said: "We expected more delegates, more visitors and more exhibitors."

These sentiments were echoed by Francis Chan, Sales Account Manager for Agilent Technologies, a California-based life sciences and applied chemical markets specialist. Chen said: "Frankly, we were surprised by just how few exhibitors turned up. With business slowing down, though, exhibitors are probably scaling down their expenses."

For most exhibitors, the root cause of the low turn-out was clear – the industry is facing tough times, with Malaysia struggling more than most. Expanding on the current problems facing the sector, Lim said: "The industry is being badly hit by the current situation with regard to Malaysian oil-and-gas production. Back in 2001, we started distributing instruments, targeting the country's major pharmaceutical companies. As a result, every big pharmaceutical company in Malaysia now uses our equipment.

"Now that the oil price is low, the government has cut spending, with industry players subsequently postponing their own expansion plans. It's become a tough market for everyone."

Business for Anton Paar's Malaysian subsidiary has not been as strong this year as it has been previously. Nevertheless, the company has chosen not to cut back on its own marketing and promotional efforts. Lim said: "We believe that this is the right time to increase our marketing activities. When the good times come, we want to be well-positioned. That's why we're exhibiting here today".

A number of attendees at the event also believed that the current slowdown within the industry is only a temporary setback. Taking a long-term view, Francis Chan said: "At Agilent, we manufacture life sciences and chemical analysis instruments for pharmaceutical manufacturing firms. We established our first factory in northern Malaysia in the 1970s. Now we focus on six key sectors – food, environmental and forensics, pharmaceutical, diagnostics, chemical and energy, and research.

"Although the market has slowed down, we still believe that it will catch up and everything will get back on track. There are a number of new industry developments and investments on the horizon, so I feel confident that there are still a lot of opportunities out there."

Overall, while optimism may have been in rather short supply at the event, one attendee was notably upbeat – Thomas Pui, General Manager for Sales and Marketing with Algaetech International, a 100% Malaysian-owned micro algal research, development and consultancy business. On the first day of the show, Algaetech received a firm confirmation of interest from a Philippine-based investor with regard to the company's latest product, premium eggs infused with natural astaxanthin. For Pui, this alone made attending the show worthwhile.

Photo: Agilent: Confident of new opportunities.
Agilent: Confident of new opportunities.
Photo: Agilent: Confident of new opportunities.
Agilent: Confident of new opportunities.
Photo: The NPRA: Committed to raising standards.
The NPRA: Committed to raising standards.
Photo: The NPRA: Committed to raising standards.
The NPRA: Committed to raising standards.

Pui said: "We are already talking about the terms of the investment. These treated eggs offer an alternative method of supplementing diets and deliver the antioxidative properties of astaxanthin, which improves nutrition. They offer improved yolk strength, yolk coloration and nutrient composition. Also, they have benefits for those who are suffering from eye problems and cardiovascular diseases."

Despite this good news for his own business, Pui concurred that the current market in Malaysia has certainly slowed down. He does, however, believe that this should not deter companies when it comes to innovation and the launch of new products. He said: "If you introduce something genuinely new, the market will come to you. People are naturally curious. For our part, we are looking to expand during this year and not just in Malaysia. We are also looking to Indonesia, Hong Kong and China".

The industry has also long benefited from government support, a factor that a number of exhibitors said had been a real lifeline. This was confirmed by Jaez Lee, Sales Manager for BÜCHI Malaysia, a supplier of high-tech laboratory equipment. Lee believes that the government incentives on offer to SMEs and pharmaceutical manufacturing firms are helping many companies in the sector to survive. In some cases, it's even fuelling their growth. Lee said: "The industry is getting bigger, but it's still far from huge. It needs government support if it is to continue to grow."

Lee's company is a local subsidiary of Switzerland-headquartered BÜCHI Labortechnik, a provider of laboratory technology for research and development, quality control and production. At present, it serves a wide range of industries, including pharmaceuticals, chemicals, food and beverage, feed, environmental analysis and academic institutions.

This year, BÜCHI Malaysia was showcasing its laboratory/industrial evaporation, evaporation, spray drying and encapsulation products in the hope of securing orders from the pharmaceutical sector. Maintaining that the event had not quite lived up to expectations, Lee said: "From the list of attendees, it seemed there would be a lot of overseas and local companies participating, but only a few are actually here. This is frustrating, especially as this is the first time we have exhibited at this particular event."

As well as providing incentives, the Malaysian government is also offering support in a number of other ways, including professional training. Stressing the importance of this particular form of support, Carol Ling, Principal Assistant Director at the industry regulator National Pharmaceutical Regulatory Agency (NPRA), said: "We offer workshops and training to ensure industry players have the required competence to maintain standards, one of the major challenges facing certain companies.

"A number of pharma companies still need to do better in terms of adopting good manufacturing practices and making sure that every product they produce meets the required standards. They will not survive unless they produce quality products."

Amongst the overall downbeat sentiment, one specific sector seemed to be thriving, attracting widespread interest and investment – Malaysia's palm oil industry. Highlighting the sector's continuing success, Wong Fu Shun, a Research Assistant with the Malaysia Palm Oil Board, said: "This particular sector continues to grow as palm oil is highly considered by the general public in comparison to other types of oil. At the same time, it's one of the essential ingredients used in the production of pharmaceuticals in this country.

"At present, further applications for palm oil are also being researched. Right now, we're studying the Vitamin E content of palm oil and looking at ways to turn it into supplements and thus commercialising it. There is also encouraging research into the use of tocotrienols – a member of the Vitamin E family – as an alternative to chemotherapy."

Photo: Algaetech: Securing new investment and looking to move ahead.
Algaetech: Securing new investment and looking to move ahead.
Photo: Algaetech: Securing new investment and looking to move ahead.
Algaetech: Securing new investment and looking to move ahead.

Pharma+Bio Asia 2016 was held from 28-29 September at the Kuala Lumpur Convention Centre.

Geoff de Freitas, Special Correspondent, Kuala Lumpur

Content provided by Picture: HKTDC Research
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