Malaysia to enhance partnerships with Indian Biotechnology and Life Sciences Companies

HYDERABAD, 10TH FEBRUARY 2009 - Malaysian Biotechnology Corporation (BiotechCorp), the lead development agency for the biotechnology industry in Malaysia kicked off their first business development engagement for 2009 in Hyderabad & Chennai with the Indian media members and industry participants. The latest updates on the Indian-Malaysian Investment initiatives were shared to address the current challenging economic climate.

Biotechnology has been identified as one of the key drivers for growth by the Malaysian government and will continue to be supported as one of the new sources of growth not only for the nation's economy, but as an enabler to move conventional sectors up the value chain. Kuala Lumpur-based BiotechCorp was established in 2005 to play the leading role in building the biotechnology business in Malaysia by creating a conductive environment and actively promote foreign direct investments in biotechnology.

"We currently have global investors from India, Britain, France, Germany, Italy, Belgium, the US, China, Japan, Taiwan, Hong Kong, Singapore, Thailand, Australia and New Zealand. All of these investors continue to take a very positive view of Malaysia as a rapidly developing biotechnology hub. Even in present circumstances – there is still a good measure of resilience from external shocks which the Malaysian economy still offer in comparison to our neighboring countries," said Mr Selvam Ramaraj, Senior Vice President, Industry Development Division (Healthcare), BiotechCorp.

The Malaysian government announced a RM13.7 billion (US$3 billion) allocation under the Budget 2009 to enhance healthcare, which included increasing the supply of medicine, intensifying research and enforcement activities as well as further strengthening the growth of healthcare biotechnology. This is in-line with BiotechCorp's BioNexus status which is given to companies to enjoy a set of incentives and privileges contained within the BioNexus Bill of Guarantee.

Some of the incentives offered via the BioNexus Status include:

- Freedom of ownership, to source funds globally and to bring in knowledge workers
- 100% income tax exemption for 10 years commencing from the first year the company derives profit OR Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of 5 years.
- Tax exemption on dividends distributed by a BioNexus company.
- Exemption of import duty and sales tax on raw materials/components and machinery/equipment.
- Double deduction on expenditure incurred for R&D.

"We do not foresee any significant claw back in terms of growth plans or expansion in the next 12 months. To-date we have a total of 97 BioNexus status companies with total approved investment of RM1.3 billion (US$360 million). These companies are actively involved in key areas in agriculture, healthcare and industrial biotechnology. 4 have international shareholders whilst 6 are wholly owned by international shareholders," he added.

Malaysia and India continue to collaborate in the field of biotechnology and life sciences with strategic partnerships forged with companies in India recently. Responsible for facilitating the investment into Malaysia, BiotechCorp and The Manipal Education and Medical Group of India (Manipal Group) first formalized their partnerships through a Memorandum Of Understanding (MOU) at the Boston BIO International Convention in May 2007. That beginning paved the way for Manipal Group to establish Stempeutics Research which became the first international company in stem cells research and therapeutics to be awarded a BioNexus status in Malaysia in October 2007. Stempeutics Research recently launched a RM20million (US$5 million) first-of-its-kind stem cell research facility in Malaysia to further strengthen its leadership position in such research.

At BioMalaysia 2008, Malladi Drugs & Pharmaceuticals Ltd (Malladi Drugs) handed over a business plan to BiotechCorp on the first day of the global conference and exhibition witnessed by Malaysian Prime Minister, Datuk Seri Abdullah Ahmad Badawi. Malladi Drugs is an API manufacturer based out of Chennai, India and committed to invest up to US$300 million in the next 3-5 years with aims to expand into other areas of service offering as a contract research organisation in Malaysia. This includes oncology and steroids, and beta-lactums. Malladi's activities will turn Malaysia into an outsourcing centre for pharmaceutical companies from US and Europe.

BiotechCorp's visit to India is expected to provide participants of the industry with a complete assessment of the business potential in Malaysia and strengthen Indian companies' ability to identify and exploit business opportunities. Further collaboration announcements are expected from the meetings scheduled with key players of the Indian biotechnology and life sciences companies.

Source : Equity Bulls

Keywords