MARCHING TOWARD THE MARKET – THE BUSINESS
POTENTIAL FOR AGRICULTURAL BIOTECHNOLOGY
IN TAIWAN
Pan-Chi Liou
Horticultural Division
Agricultural Research Institute
Council of Agriculture, Executive Yuan
Taichung Hsien 41301, Taiwan ROC
ABSTRACT
Biotechnology has become one of the most important issues in the world, due to its high value of
application in many different aspects. There is no doubt that this new science and technology will
have a strong impact on the agricultural sector worldwide. In Taiwan, agricultural biotechnology
has been included in the key areas of research funded by the government. Agricultural
biotechnology, by its broad definition, includes plant tissue culture, applied microbiology, and
applied molecular biology. The current situation of research, application, and commercialization
of biotechnology in Taiwan is briefly introduced in this report. Also included is the profile of
business strategy in agricultural biotechnology that the country is adopting. The main issues
affecting this newly developed industry in Taiwan, as well as the challenges that the country may
face in the near future, are also discussed.
Keywords: Taiwan, agricultural biotechnology, marketing, business
A REVIEW OF AGRICULTURAL
BIOTECHNOLOGY IN TAIWAN
Although the agricultural industry accounts for
only less than 3 percent of the annual national
revenue of Taiwan, it is very important in
sustaining the growth and development of the
country, prompting the need to continuously
improve and develop this sector. For this
reason, the application of biotechnology to
agriculture has become a very critical issue.
Based on the broad definition of
biotechnology, its scope in agriculture includes
tissue culture, applied microbiology, and
applied molecular biology.
Just like in many other countries, the
research and commercial application of plant
tissue culture and applied microbiology in
Taiwan have a longer history compared to
molecular biology. Research on molecular
biology in the field of agriculture can be traced
back to the early 1980s. At the very early
stage, it was merely restricted to some basic
applications, such as gene cloning,
transformation, and genetic marker analysis in
plants and animals. During that time, research
on biotechnology was mostly funded by the
government, mainly conducted in universities
and public research institutes. Due to its high
application potential, in 1982, biotechnology
was included as one of the eight key areas of
research by the government to accelerate the
country's development. At the same time, many
related education or training programs were
initiated. In 1984, the Development Center for
Biotechnology (DCB), the first autonomous and
nonprofit organization specifically focused on
biotechnology research, was established. After
nearly one decade’s effort, the research focus
gradually shifted to new items that were more
practical and important, including the
development of transgenic plants and animals,
DNA-based genotyping for breeding, and
development of biopesticides, biofertilizer, and
animal vaccines. With more private companies
becoming involved in the projects, it
significantly promoted the marketing aspect of
agricultural biotechnology.
In 1997, the National Science and
Technology Program for Agricultural
Biotechnology (NSTP/AB) was initiated. This
interagency program implemented and
coordinated by the National Science Council
(NSC), Council of Agriculture (COA), and the
Academia Sinica, is a milestone event in
Taiwan. The main scope of the NSTP/AG
includes flowers and ornamental plants, plant
bioprotection, aquaculture, livestock and animal
vaccines, utilization of plant genomes,
environmental biotechnology, and medicinal and
health plants.
From the late 1980s to the mid 1990s,
certain important regulations or guidelines
concerning biotechnology and biosafety were
established by the government.
The
Experimental Rule of Recombinant DNA was
issued by the NSC, as well as the guidelines
for risk assessment in genetically modified
(GM) plants and GM animals by COA. The
amendment of the most important law in
agriculture, the Plant Variety and Seed Act,
was promulgated by COA in 2003, which by
taking biotechnology into account has opened
the door to a new era. The creation of some
animal- and fish-related regulations and laws in
this field has also been ongoing. Today, a
framework
for
the
management
of
biotechnology and biosafety in this country
has been formed. During the past five years,
more efforts, whether from the government or
the society, have been made to promote
biotechnology for the development of
agriculture in Taiwan, including the setting up
of several biotech science parks. In 2005, the
total investment in biotechnology in the
country has reached the amount of 150 billion
NT (New Taiwan) dollars (USD 4.7 billion). All
these efforts have laid a good groundwork for
the further development and application of
agricultural biotechnology in Taiwan.
STATUS OF AGRICULTURAL
BIOTECHNOLOGY PRODUCT BUSINESS
Profile of agricultural
biotechnology business
In the industrial circle, people are always
highly interested in adopting new technology,
2
which gives high potential of economic
benefits. Biotechnology, a relatively new
science born in the 1970s, is regarded as a
highly promising profit maker in the world.
However, the industry in Taiwan seemed to
respond to it rather late, especially in the
agricultural aspect. A study done by the
Taiwan Institute of Economic Research showed
that only 11.3 percent of companies related to
agricultural biotechnology business existed
before 1980. A few (16 percent) was
established during 1980-1995 (Figs. 1 and 2),
while more than two-thirds (66.9 percent) were
established after 1996. This indicates that, in
Taiwan, the industry entered the era of
agricultural biotechnology only about one
decade ago.
Most biotechnology companies (63.2
percent) are small in scale with less than 25
staff. Only 9.4 percent of them hire more than
100 employees. The turnover of most
companies (54.7 percent) is below 50 million
NT, and only 7.5 percent of them reach 500
million NT or more. In general, the main part
of their income comes from the manufacture
and sale of product. The top five categories of
products are as follows: 1) disease and pest
detection kits for plants or animals (28.8
percent); 2) functional foods (23.1 percent); 3)
biofertilizers (14.1 percent); 4) aquatic nursery
and its related products (12.2 percent); and 5)
plant tissue culture (7.7 percent). In 2003,
the agricultural biotechnology industry was
classified into the following categories: plant
tissue culture (39.8 percent); animal medicine
(24.6 percent; aquaculture biotech (24.4%);
biopesticides and biofertilizers (8.2 percent);
and others (2.8 percent) (Fig. 3). Many
companies still lack the capability to conduct
active research by themselves. About half (47.2
percent) of the techniques and know-how used
to build up the agricultural biotechnology
business were obtained from within Taiwan,
while 11.3 percent, 4.7 percent, and 9.4 percent
were introduced from America, Europe, and
Japan, respectively.
This report briefly
describes some current situation of the plant
tissue culture, biopesticides, and biofertilizers
business, as well as issues related to GM
products.
Supporting
•Industry
•••
Environmental
• Biotech
•••
18%
Medical Biotech
Medical Biotech
•-Medicine
• • • • •-Material
••
11%
3%
•Biotech
• • Chip
•
3%
8%
Medical
• • •Biotech
•
-Detection
16%
16%
Agricultural
Biotech
16%
•Medical
• • •Biotech
-Regeneration
2%2%
••••
16%
Food
• • Biotech
••
17%
• Others
•••
6%
6%
Fig. 1. Categories of biotechnolgy industry in Taiwan.
(Source: ITIS Project of DCB, 2005)
Time of Establishment
Before 1980 (12%)
1981-1985 (2%)
1986-1990 (7%)
After 2001 (33%)
1991-1995 (8%)
1996-2000 (38%)
>25 years
10–25 years
<10 years
12%
17%
71%
Fig. 2. Establishment of agricultural biotechnology companies.
(Source: ITIER 2004)
3
Biopesticides
& Biofertilizers
8.2%
Others
2.8%
2.8%
Animal medicine
24.6%
24.6%
8.2%
Aquacultural
Biotech
24.4%
24.4%
Plant tissue culture
39.8%
39.8%
Total value in 2003: 1.54 billion NT (about 51 million USD)
Fig. 3. Agricultural biotechnology industry in Taiwan, 2003.
Plant tissue culture
Plant tissue culture, which is the earliest form
of biotechnology research in the country, is
not only a mature technology now, but also
has grown into a flourishing industry in
Taiwan. Many tissue-culture products have
been traded domestically and internationally for
more than two decades. Since tissue culture is
a powerful technique for mass production in
many crops, and is also a useful method to
produce healthy plants, it has become an
important tool in the nursery industry. Many
plants are now propagated by tissue culture in
the world. In Taiwan, the orchid nursery has
been relying much on tissue culture for the
mass production of healthy young plant. The
orchid industry had as much as 51 percent and
85 percent tissue culture products in 1998 and
2002, respectively. This is very much different
from many other countries, where tissue culture
is mainly used to propagate ornamental foliage
plants. The main categories in orchid produced
by tissue culture in Taiwan include
Phalaenopsis,
Oncidium,
Cymbidium,
Dendrobium, and Paphiopedilum.
Another very important application of
tissue culture technique is in the banana
industry. The Fusarium wilt of banana,
4
commonly known as Panama disease, has
become a major limiting factor in the
commercial production of Cavendish banana on
this island since the late 1970s. In order to
prevent the spread of this catastrophic disease
by infected planting material, the Taiwan
Banana Research Institute (TBRI) started using
tissue culture to produce healthy plantlets for
commercial planting in 1984. Since then, there
were more than one million Cavendish banana
plantlets produced by tissue culture each year.
Today most of the bananas planted on this
island are from tissue culture. The application
of tissue culture accompanied with other
strategies has successfully prevented the
Taiwan banana industry from decline.
Moreover, in 1984, a project was initiated at
TBRI to screen tissue-cultured Cavendish
plantlets for resistance to Fusarium wilt, based
on somaclonal variation. As the search for
resistant clones continued, the birth of some
commercially acceptable resistant cultivars has
been realized. The first resistant cultivar
acceptable for commercial planting was
obtained within only 6 years. This has
demonstrated the feasibility of using tissue
culture to generate variation for selection of
commercially acceptable wilt resistant cultivars
in banana.
than 50 percent of the companies (58 percent)
were considered small producers, i.e., with a
yearly production of less than 500 thousand
plantlets, and only 12 percent with a yearly
production of 5000 thousands plantlets or
more. However, in 2002, 25 percent of the
companies had the capacity to produce yearly
up to 1-5 million plantlets, and 17 percent of
companies produced even more than 5 million
plantlets yearly.
Many nurseries had expanded as a result
of severe competition. It was estimated that,
during the past several years, 10-15 percent of
small nurseries had either discontinued their
business or merged with other partners, and
10-12 percent simply expanded the business
themselves. There were also 15 new large
nurseries established recently. Beside the
expansion in scale, recently the specialization
of the production has also become a new
characteristic in the tissue culture industry.
This change will be beneficial for future
competition.
During the past decade, the tissue culture
business keeps growing steadily, and recently
the trading activity is quite prosperous both in
local and international markets. In 2003, its
total export value reached 0.272 billion NT,
which is 27 percent more than that of 2002
(Table 1). About 95 percent of the export value
came from orchids, especially Phalaenopsis.
However, a very large amount (72 percent) of
Phalaenopsis is for domestic consumption. For
export, the major trading partners come from
the USA (30.1 percent), Japan (28.8 percent),
South Korea (13.4 percent), Netherlands (7.4
percent), and China (4.0 percent).
The number of nursery companies
engaged in tissue culture ranges from 100 to
120 during the past decade. The investigation
showed that about 94 percent of these
nurseries are located in the western part of
Taiwan, while only 6 percent are in the eastern
part. In the western part, more than half (54
percent) of them are in the central region (Fig.
4). This is also the most important agricultural
area on this island. The investigation also
revealed that there were some significant
changes in the scale of nursery companies
during the past several years. In 1998, more
Biopesticide and biofertilizer
In the area of aphid microbiology, biopesticides
and biofertilizers are two major concerns. Due
Table 1. Value of TC plantlets exported in 2002 and 2003
2003
Export value
Item
2002
Million NT
Order
Million NT
Order
Phalaenopsis
183.0
1
125.4
1
Orchids plantlets in
bottle
74.8
2
49.7
2
Cymbidium
6.9
3
21.7
3
Oncidium
6.2
4
4.4
4
Dendrobium
0.8
5
0.9
5
Others
0.1
¢ w
Total
0.272
Billion NT
(about 10 million USD)
0
¢ w
0.202
Billion NT
(about 6.7 million USD)
5
Eastern Taiwan
ªF
³¡
¦a
°6%
Ï
6%
Southern Taiwan
23%
« n
³ ¡
¦ a
° Ï
23%
°Ï
a
54%
Central Taiwan
¥ ³
_ ¡
¦
17%
Northern Taiwan
17%
Fig. 4. Location of plant tissue companies in Taiwan.
(Source: Chen & Liau 2005)
to environmental and ecological safety
considerations, farmers and consumers have
become more and more aware of biological
control. Research on biopesticides began early
at public institutes and universities, and some
important results have been obtained in
different laboratories. The fungi Trichoderma
spp. can be used to control many pathogens,
including Rhizoctonia solani, Sclerotium rolfsii,
Sclerotinia
sclerotium,
and
Pythium
aphanidermatum. They can also reduce the
damage caused by Botrytis cinerea,
Pseuperonospora
cubensis,
Sclerotinia
sclerotinia, and Sphaerotheca fusca, and
therefore are valuable for protecting the crop.
These well-studied biocontrol agents have
become an ideal subject of commercialization.
Other well-studied antagonistic microorganisms
include Bacillus bustilis and Streptomyces.
Further studies have showed that these natural
resources are easy to use in agricultural
practice. The Taiwan Agricultural Research
6
Institute (TARI) has made some important
contribution in this aspect, including the effort
for commercialization and marketing. To date,
several big companies, such as the YuenFoongyu Paper Co., Tai-En Co., and Biontech
Inc., have started to produce and merchandise
these products by using their own brands
(Table 2). Although at present, the total value
of this new industry is only about 0.5-1
percent of the traditional pesticides, it is
growing by the rate of 10-15 percent yearly.
Recently, a brand called “Biowork” (Bacillus
bustilis) has just been introduced in the market
in Japan, and some products of Streptomyces
have created a yearly value of 10-20 million NT
in the domestic market.
As potted plants become popular in
modern horticultural industry, the use of
biofertilizers has also become more acceptable
to growers. The use of the culture medium
made of vermiculite, peat moss, and pearlite, is
quite suitable for the application of
Table 2. Biopesticides produced in Taiwan
Company
Sinon Corporation (
Main Products
)
Bacillus
Yuen Foong YuBio-Tech Co.(
King Car Food Industry Co. (
COA/NCHU (
Bacillus Streptomyces
COA/NCHU
NCHU
)
Gene Agri-Aqua Ecosystem Biotech Co.
( )
Trichoderma
Self-developed
Self-developed
Huikwang Cporporation (
Syngen Biotech Co. (
)
COA/NCHU
)
Streptomyces
Bacillus Streptomyces
Taiyen Biotech Factory (
Technique Source
Bion Tech Inc. (
)
(
)
)
Nantex Industry Co. (
)
(NPV)
)
Analytica Therapeutics
DCB /Guang-Hua Co.(
Bacillus Streptomyces
COA/NCHU
)
Bacillus
Taiwan Fertilizer Co. (
Self-developed
)
Biopestides
COA/NCHU
Bacillus Streptomyces
)
Taiwan Biological Corporation ( / DCB (
BT
Self-developed
BT
NCHU
GMOs and other products
Other categories in agricultural biotechnology
with high marketing potential will come from
)
Self-developed
BT
biofertilizers, since it requires fewer amounts of
microorganisms and gives better plant growth.
Several fungi and bacteria have been studied
for use as biofertilizer, including species of
Pseudomonas,
Bacillus,
Thiobacillus,
Penicillium, and Aspergillus, etc. There have
been some good products marketed by
different companies, which are quite well
accepted by farmers. Based on long-term
experiments, TARI has also transferred some of
their know-how in this aspect to different
companies. Now they are being marketed in
different names, such as “Dr. Root” (Vesiculararbuscular mycorrhizal fungi, VAMF) by Tai-En
Co.; “Mycovam” (VAMF) by the Taiwan
Biological Research Co.; “Ai-gen-how” in
Chinese) (VAMF) by the Lei-ju Co., and
“Agroguard” (Bacillus) by the Taiwan
Biological Research Co. At present, the yearly
value of the biofertilizer industry is estimated
as being slightly less than the biopesticides.
)
NTHU (
)
COA
applied molecular biology, also known as
genetic engineering. Its products include
genetically modified organisms (GMO) for
producing specific bioproducts, detection kits
derived from recombinant DNA technique,
transgenic plants and animals, etc. It is
believed that applied molecular biology will
create much higher value than ever before to
the agricultural industries.
In Taiwan, much effort has been made to
promote the development in this field of
research, and many researches are going quite
well. Using recombinant DNA technique to
produce highly sensitive and accurate detection
kits for disease diagnosis is one of the
important achievements in TARI. This kind of
product started to be used in the nursery
several years ago, and has been proven very
helpful for the quality control of tissue culture
plants. The transgenic papaya resistant to
papaya ringspot virus was developed by the
National Chung-Hsing University about 10
years ago, and has passed the environmental
risk assessment in 2000. It still needs to go
through the food safety assessment before
marketing. Several transgenic crops, including
7
rice, broccoli, potato, and tomato, are now
under the process of environmental risk
assessment performed at TARI and AVRDC
(Asian Vegetable Research and Development
Center), but has yet to go through food safety
assessment. Another important GM plant is
the transgenic eucalyptus, which is created by
the Forest Research Institute and now under
field evaluation according to the guideline. In
animals, the transgenic ornamental fish
containing fluorescent gene developed by a
private company, and the duplicated goats
deriving from somatic cell cloning, developed
by the Livestock Research Institute and the
National Taiwan University, are two examples
of outstanding achievements. Although many
of these genetic engineering products are ready
for application, so far none of them has been
commercialized or marketed.
POTENTIAL OBSTACLES IN THE
COMMERCIALIZATION OF AGRICULTURAL
BIOTECHNOLOGY PRODUCTS
Taiwan is one of the countries, which has
taken the development of biotechnology as an
important policy. Today, the plant tissue
culture business has been well established, and
commercialization in some microbiological
products has been well achieved. However,
the business of agricultural biotechnology in
Taiwan is still far from mature, especially in the
area of applied molecular biology. Although in
the area of GMO, some good progress in
research have been acquired during the past
decade, the products have yet to be marketed.
There are many factors which may affect the
development of this industry. However, the
following six issues may become the main
potential obstacles in the future:
1) The framework of law and regulation
system has not yet been completed.
Although much work has been done,
the legislation of some laws and
regulations, such as that for transgenic
animal and fish, has yet to be
completed.
2) There is a need for stronger connection
between laboratories and factories.
Since more than one decade ago, the
NSC and COA have been working very
hard to build a strong linkage between
the researchers and producers, in order
8
to speed up commercialization and
marketing in this field. However, the
connection seems to be not strong
enough so far.
3) Most of the companies are small and
medium enterprises (SMEs), thus may
have limited competition ability due to
the relatively higher production cost
and low R&D budget. 4) There is a
strong need for more public
communication and education. Some
surveys have revealed that many
people
do
not
understand
biotechnology and its products
correctly. This may hinder the
commercialization and marketing of
agricultural biotechnology products in
this country.
5) There is a need for more traditional
nursery companies to join the GMO
business.
Many companies with
nursery business still do not show
their interest in transgenic technology
and GMO products. Perhaps this is
due to their concern of customers'
response. However, their experience in
marketing will be very helpful and
needed in the development of GMO
business.
6) There is a need for more international
cooperation. This is one of the weakest
points in Taiwan’s agricultural
biotechnology. There is a strong need
to increase international cooperation
either in research or business aspects.
FUTURE CHALLENGES
There are two important factors that will
strongly determine Taiwan's future development.
The first is joining the World Trade
Organization (WTO) as a member, and the
second is its readiness to face the challenges
of the 21st century, which is considered as the
"century of biotechnology." Biotechnology will
be a very important factor in the international
trade. For this reason, Taiwan is must face
daunting challenges, must do its best to
overcome several obstacles. There are at least
four issues that the country has to deal with:
1) To increase R&D ability both in basic
research and manufacture procedure.
2) To build a complete system for
managing biotechnology. It should take
into account all related factors, such as
laws and regulations, risk assessment,
and product monitoring. Although
most of these issues are now being
addressed, efforts must be intensified
to establish these systems and
mechanisms.
3) An ideal environment must be created
for the SMEs to become more
competitive. For this purpose, the
strengthening of cooperation in
research and the establishment of
biotech science parks as future
production basis are very crucial.
4) There is a need to strengthen public
communication and education in order
to get support form the society either
for research or commercial business.
9