SWOT Analysis of the Herbal Industry in Sabah

The comparative advantage of the herbal industry in Sabah is based mainly on its diverse composition of flora. Some of these plants are known to have active ingredients and are being demanded increasingly by local as well as international markets especially for food, health and therapeutic values. Indeed, Sabah has a competitive advantage to develop its own herbal/traditional medicines and pharmaceutical industry because of its rich bio-resources endowment. Several research institutions have undertaken initiatives to collect, identify and promote the benefits of some well-known herbal plants such as Eurycoma longifolia (Tongkat Ali), Labisia pumila (Kacip Fatimah), Centella asiatica (Pegaga), Morinda citrifolia (Mengkudu), amongst others. Currently, little is known on the active ingredients and benefits present in many of the herbal plants found vastly in the State.

In Sabah, herbal endeavour is presently concentrating on a traditional and small scale basis particularly to meet local demand. Herbal activity is mainly comprised of collection of plants from the wild by the indigenous people and sold at "tamus" and retailing by the established pharmaceutical shops and medical hall. Thus, at the broader perspective, pertinent issues on herbal industry in Sabah include lack of R & D initiatives, manufacturing facilities, skilled manpower and expertise, inadequate of infrastructure and marketing network, inadequate investment strategies and lacking of public awareness. These issues need to be addressed in order for the industry to thrive competitively within the domestic and international markets.

A SWOT analysis provides the basis of discussion on the strength, weakness, opportunity and threats of the herbal industry in Sabah. It assesses the strengths, weaknesses, opportunities and threats in developing the industry. Based on a cursory investigation of the herbal industry, its strengths, weaknesses, opportunities and threats are identified and presented in Table A. However, the list is not exhausted.

Table A : SWOT Analysis of Herbal Industry in Sabah

Sub-sectors

 Strength Weakness Opportunity Threats

Raw Materials
  1. National initiative on promoting herbal plantation under NAP3, recognition by the National Biodiversity Policy;
  2. Availability of a wide and diverse base of herbal plants;
  3. Increasing R&D interests and supports for herbal products; and
  4. Latest government policy to utilise idle land.
  1. Insufficient supply of local raw materials;
  2. Unknown exact location of species; and
  3. Information on soil suitability for herbal plants is currently not available.
  1. Diversification of herbal-based products (body care and beauty products, cosmetics, health foods, etc.);
  2. Domesticating wild plants in nurseries through mass propagation, in vitro culture, etc.;
  3. Establishing herbal plantations at a large scale; and
  4. Bio-prospecting.
  1. Destruction of herbal resources due to unsustainable logging activities and agriculture development, etc.;
  2. Risk of losing potential herbal species through forest fire and illegal logging;
  3. Commercialisation may lead to over-exploitation; and
  4. Intellectual Property Rights (IPR) issue.

Processing
  1. Vast traditional knowledge by local inhabitants on herbal preparation ;
  2. Availability of Good Manufacturing Practice (GMP) factories in Peninsular Malaysia ; and
  3. Establishment of SAIP

(Sabah Agro- Industrial precinct) i.e. Health Farm.
  1. Production efforts concentrated on a small scale industry;
  2. Lack of capital investments on production facilities;
  3. Lack of technological base for production; and
  4. Poor adherence to set quality control measures and GMP standards.
  1. Development of new and improved products based on herbal plants;
  2. Development of new and improved processing and packaging to produce higher quality products;
  3. Setting up of a private-led laboratory for bio-chemical analysis; and
  4. Setting up or relocation of GMP factory in Sabah.
  1. High overhead and production costs may limit involvement; and
  2. Absence of private-led laboratory to conduct analysis on pesticides contamination and nutritional values.

Marketing
  1. Acceptance and increasing demand of herbal-based products for health care, pharmaceutical and cosmetics;
  2. Tapping the BIMP-EAGA markets; and
  3. Tapping Southeast Asian markets.
  1. Absence of clear investment and marketing strategies;
  2. Inadequate penetration to the overseas market; and
  3. Inadequate effort to explore e-herbal.
  1. Government effort to

    2. promote ‘buy Malaysian products’;

  2. Affordable medicines and food supply;
  3. Investment potentials; and
  4. Ready market for herbal products.
  1. Export barriers;
  2. Competing herbal products from other countries; and
  3. Lack of diagnostic treatment by the suppliers.

Transportation
  1. Existing State and Federal roads to the interior areas; and
  2. Pan Borneo Highway.
  1. Insufficient infrastructure

    2. facilities; and

  2. High transportation costs.
  1. Improvement of existing facilities; and
  2. Development of new infrastructures
 Inadequate good roads in some areas.

Technology

 Existing technical and laboratory support from established research institutions in Peninsular and soon from UMS.
  1. Inadequate skilled manpower;
  2. Lacking efforts in incorporating technological knowledge with cultural and anecdotal knowledge; and
  3. Inaccessibility of entrepreneurs to technology know-how.
 Developing supporting industries such as information technology, management and other support and service industries. Great control of medical advances, technology and products by Western medicines.

Source: IDS (Sabah), 2000