Business Potential for Agricultural Biotechnology - Asian Productivity ...

Business Potential for Agricultural Biotechnology Products
Institute of Economic Research showed that only 11.3% of companies related to the agricultural
biotechnology business existed before 1980. Sixteen percent were established during 1980–95.
More than two-thirds (66.9%) were created after 1996. This indicates that in the Republic of
China the industry entered the era of agricultural biotechnology only about a decade ago. Most
companies (63.2%) are small in scale, with a staff of fewer than 25. Only 9.4% hire more than
100 employees. The turnover of most companies (54.7%) is below TWD50 million, and only
7.5% of them reach TWD500 million or more. In general, their income comes primarily from
the manufacture and sale of products: disease and pest detection kits for plants or animals
(28.8%), functional foods (23.1%), biofertilizer (14.1%), aquatic nursery and related products
(12.2%), and plant tissue culture (7.7%). It would appear that many companies still do not
conduct active research. About half (47.2%) of the techniques and know-how used to build up
the agricultural biotechnology business were obtained from within the island, while 11.3%, 4.7%,
and 9.4% of the know-how was introduced from the U.S., Europe, and Japan, respectively. This
report will briefly describe some aspects of the current business situation in regard to plant tissue
culture, biopesticides, and biofertilizers and then discuss some GMO issues.
Plant Tissue Culture
Plant tissue culture, an early activity in biotechnology research, is now not only a matured
technology but has grown into a flourishing industry in the Republic of China. Many products
have been traded domestically and internationally for more than two decades. Since tissue
culture is a powerful technique for the mass production of many crops and also a useful method
for producing healthy plants, it has become an important tool in the nursery industry. Worldwide,
many plants are now propagated by tissue culture. In Taiwan, the orchid nursery in particular has
become very reliant on tissue culture for the mass production of healthy young plants. Commercial
orchid varieties consisted of plant tissue culture products in percentages as high as 51% and
85% in 1998 and 2002, respectively. This is very different from many other countries, where
tissue culture is mainly used to propagate ornamental foliage plants. The main categories of
orchids produced by tissue culture in Taiwan include Phalaenopsis, Oncidium, Cymbidium,
Dendrobium, and Paphiopedilum.
The tissue culture business has been growing steadily during the past decade, and recently
trading activity has been quite prosperous both in local and international markets. In 2003, the
total export value reached TWD0.272 billion, 27% more than the year 2002. About 95% of the
export value came from orchids, especially Phalaenopsis. However, a very large percent (72%)
of the Phalaenopsis is for domestic consumption. In export, the major trading partners came
from the U.S. (30.1%), Japan (28.8%), South Korea (13.4%), Netherlands (7.4%), and China
(4.0%). The number of nursery companies engaged in tissue culture has ranged between 100 and
120 during the past decade. About 94% of these nurseries are located in the western part of
Taiwan, with 6% located in the eastern part. In the western part, more than half (54%) are in the
central region, which is also the most important agricultural area on the island. There has been a
significant change in the scale of nursery companies during the past several years. In 1998, more
than half (58%) were small producers, i.e., fewer than 500 thousand plantlets produced per year,
and only 12% produced 5,000 thousands plantlets or more. However, in 2002, one quarter (25%)
of the companies had the capacity of an annual production of up to 1,000–5,000 thousand
plantlets, and 17% produced more than 5,000 thousand yearly. This indicates that many
nurseries may have increased in size due to the intense competition. It was estimated that during
the past several years 10%–15% of small nurseries either went out of business or consolidated
with other partners, and 10%–12% expanded. Fifteen new large nurseries have also been
established recently. Specialization in production has also become a new characteristic in the
tissue culture industryand will likely be beneficial in increasing future competitiveness.
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