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Developing Natural Products and
New Value Chains in Kelantan while
Maintaining Cultural Integrity: What,
        How and for Whom
                      Mohd. Murray Hunter
                University Malaysia Perlis (UniMAP)

 Keynote address to the Conference on Natural Products: Integrating Traditional
Practices & Technology Advancement for Creating Business Opportunities, 21-22nd
        November, Grand River View Hotel, Kota Bahru, Kelantan, Malaysia
“On one hand, rural development starts with people and
their education, organization, and discipline. Without these
  three, all resources remain latent, untapped potential”
                                    E.F. Schumacher 1975, P. 168.
The importance of Kelantanese
           Culture
Product Space Map
    of Kelantan




                    Agricultural Activities                      Other Activities
                                                                                               Biotechnology   Education
                       Rubber             Fruit Production         Agro-Industry    Fishing
                       Palm Oil           Vegetable Production     Agro-Tourism     Industry   Service         Transport
                       Paddy              Other Crops              Handicraft       Logging    Construction
Requires focus on concept of product where present
  Focus    focus is on cultivation
           This requires research
Paradigm   This requires entrepreneurship approach
           Concepts not understood by farmers

           Needs access to worldwide data
  Basic    Requires availability of suitable germ-plasmas
           Requires basic R&D to determine whether crop
Research   technically suitable
           Requires basic R&D to determine if potential crop is
           economically feasible
Crop             Propagation technologies
                 How to plant, cultivate & manage to crop
Management &     How to harvest, extract, store and handle
Processing       How to process
                 How to package
                 Transportation and storage

Marketing        Require coordination of production with demand
                 Require correct channels of distribution
Infrastructure   Requires a marketing strategy

Economies and    Requires enough volume to economically transport
                 and distribute
Logistics        Requires solution to inconsistencies of quality and
                 production
Organisation                                    Need committed people with strong leadership and
                                                     trust


     Government                                      Need to translate support into action
                                                     Need funding allocations


     Finance                                         Very difficult to obtain funding for these projects

     Consumers                                       Need efforts for education & promotion




Partly modified from Kee, T. B., Monoculture in Malaysia: Impacts, Potential Solutions, paper presented to Monocultures: Environmental and Social Effects and
Sustainable Alternatives Conference, Songkhla, Thailand, 2-6 June, 1996.
Raw Herbs                   Traditional Herbal
                                                                  Medicines

                                     Fresh
           Dried                  Consumption             Fermented



        Medicinal                                         Medicinal
        Powders                                           Beverages
                                   Extracts




Standardised Extracts                                     Fractions & Isolates



Phytopharmaceutical                                             Bioactive
     Products                                                  Compounds



                                                          Prescription & OTC
     Enzymes                    Essential Oils &                Drugs
                                Other Volatiles




  Agricultural          Personal Care              Flavour &             Aromatherapy
  Application            & Cosmetics               Fragrance


 Figure 1: The Family Tree of Herb Derivatives
Traditional Chinese Medicine
                               Homeopathy
Unani




Ayurveda



           Siddha
Berberine



                            Berberis vulgaris




 Quaternary Ammonium
      Compound

      Fungal infections
      Diabetes mellitus
     Intestinal disorders   Coptis chinensis
   Represses tumor growth
       Antidepressant
Tea Tree
Australia
Processed Food
Beverages
Fine Fragrance
Aromatherapy
Cosmetics & Personal Care
Household Products
Pharmaceuticals
Organic Agro-Chemicals
Existing Thai Organic Products
New Foreign Products


                       Essential Oil Based
                       Fungicides/Insecticides

     Control                               Nimgard +
                                              Kocide


    Timorex
      0.5 %                              Timorex 1 %
Powdery Mildew in Sage

    Field results Sage
                                          a
                                    7




          Disease rating ( 1-10 )
                                    6

                                    5

                                    4

                                                        b
                                    3
                                                                        b
                                    2                                                   b

                                    1

                                    0
                                        Control    Neemgard 1%    Timorex 0.5%   Timorex 1%

                                                            Treatment
                                                  Five foliar sprays at 7-d intervals
Powdery Mildew in Parsley

    Field Results Parsley
                                             a
                                   50

                                   45

                                   40




         Percent infected leaves
                                   35
                                                          b
                                   30

                                   25

                                   20                                     bc

                                   15

                                   10                                                                        c

                                   5                                                         c

                                   0
                                        Contol   Timorex 0.25%   Timorex 0.5%   Timorex 1%       Nimgard+Kocide
                                                                  Treatment




                                                           Five foliar sprays at 7-day intervals
Prophylactic activity grape downy mildew
                      Adelaide, Au.
Field Results Grapes                                                         35




                                                Percent infected leaf area
Treatment & Prophylactic
                                                                             30
                                                                             25
                                                                             20
     grape PM- Carignan
                                                                             15
      Treatment              Percent infected
                                 clusters                                    10
       Control                    48.8 a                                     5
     Timorex 0.5%                  0.5 b
                                                                             0
     Timorex 1%                    0.0 b                                          Control   Timorex 0.5%   Copper 0.5%
  Tebuconazole 0.02%               0.0 b                                                     Treatment

                                                       Plants were infected 2 days after spraying
            4 foliar sprays at 14-d intervals
                                                       Disease was rated 14 days after inoculation
Powdery Mildew by Timor
                                                         Field Results Grapes




                               Control of grape DM- 2003
                               5 foliar sprays at 7-d intervals           Timor 0.5%                                      Control
                          70
Percent infected leaves




                          60
                          50                                                                               grape PM- Chardonnay 2003
                          40
                                                                                                      70


                                                                          Percent infected clusters
                          30
                                                                                                      60                            1st Rating 1.7.03
                          20                                                                                                        2nd Rating 15.7.03
                                                                                                      50
                          10
                                                                                                      40
                          0
                                                                                                      30
                               Control      Timorex 1%     Kocide 0.25%
                                                                                                      20
                                            Treatment                                                 10
                                                                                                       0
                                                                                                             Control   Timor 0.5%   Heliosulfur 0.5%
                                                                                                                       Treatment
Enzymes & Cosmetics
Introduction
Common Enzymes, Potential Sources and
         Other Potential Applications
Enzyme           Potential Sources                 Potential Applications
Ascorbic acid    Citrus fruits, leaf vegetables,   Fruit preservation, cleaning
oxidase          cucumbers                         applications
Beta-amylase     Grains, sweet potatoes, taro,     Yeast production
                 cassava
Bromelains       Pineapples                        Fertilisers, pseudo hormones,
                                                   cleaning, cosmetics, personal care,
                                                   mouthwashes, skin healing, anti-
                                                   acne, anti-microbial
Catalase         Animal wastes, milk wastes        Cosmetic, anti-ageing, oxidising
Chlorophyllase   Some leaf vegetables              UV absorption
Elastase         Animal intestines                 Cosmetics, anti-aging
Glucoxidase      Some mushrooms, mould, other      Anti-oxidant
                 fungi
Papain           Papaya                            Fertilisers, wound and skin healing,
                                                   mouthwashes, other cosmetics,
                                                   dishwashing, all purpose cleaning
Natural Enzyme Based Products
Organic Herbicides



                                                Before
Product               Reported Results*

Control               O

Round Up              10
Pro[i]
All-Down              Range 0.5 – 3.8
Organic[ii]
 [i]    Registered Trademark of Monsanto.
 [ii]   http://alldownherbicide.com/             After
Pharmaceuticals: Artemisia annua
                   A source of artemisinin for
                   treatment of malaria

                   World Shortage
                   Straight forward cultivation
The Stages Involved in the Development of a Pharmaceutical Product

               Discovery: 2-10 years
               The extraction or synthesis of a new clinical or biological substance


                 Preclinical Testing: 4 years
                 Laboratory and animal testing

                                   Clinical trials: 7 years Phase 1
                                   20-80 health volunteers used to determine safety, pharmacological and
                                   dosage.

                                                 Clinical trials: Phase 2
                                                 100-300 patient volunteers used to determine safety and
                                                 efficacy

                                                              Clinical Trials: Phase 3
                                                              1000-5000 volunteer patients used to determine
                                                              clinical health benefit and incidence of adverse
                                                              reactions
                                                                           TGA Registration 1.5-2 years
                                                                           35-40K pages of data submitted for
                                                                           evidence on average

                                                                                Pharmaceutical Benefits
                                                                                Scheme: 8 months
                                                                                Determination of cost
                                                                                effectiveness

            Product Promoted to the Medical Profession

        Post Marketing Monitoring: monitor safety and efficacy
        when used in wider population, with other diseases and
        taking other medicines.
Screening
• Require Knowledge of Essential Oil
  Applications
• Require knowledge of International Market
• Require Knowledge of International
  Regulations
• Need to Collaborate with Industry Parties
Screening Protocols
•   Anti inflammatory
•   Anti microbial
•   Skin whitening
•   UV absorbing
•   Anti age actives
•   Flavour & fragrance application
•   Aromatherapy
Regulatory Screening
• United States
  - GRAS (Genarally Regarded as Safe)
• RIFM – Collections of Monographs
• Food and Drug Administration
• Europe – REACH, BPD, SCP
Ranking Criteria
1. Potential Returns
2. Production Costs
3. Capital Investment
4. Crop Suitability
5. Risk
6. Time Frame of Opportunity
7. Level of Difficulty to enter Market
8. Personal Bias
A Grid showing the characteristics of a new essential oil

The novelty of a                       A   C   D   B
new essential oil     Low Novelty                       High Novelty

The potential
uses & applications Low Potential                      High Potential
of the new essential
oil
                        Close                             No Close
 The closeness of
 any substitutes      Substitutes                        Substitutes


The stability of      Poor Stability                   Good Stability
the essential oil
in applications

The                     Poor Ratio                      Good Ratio
cost/performance
ratio

The Toxicity         High Toxicity                     Low Toxicity


The general              Low
consistency of                                              High
quality and supply
                      Consistency                        Consistency

 The prevailing        Low Trend                         High Trend
 market/product          Match
 trends                                                    Match

 The current               High                             Low
 level of              likelihood of                    Likelihood of
 technology              synthesis                        Synthesis
Evaluation Criteria (Aroma)
• The Novelty of the new essential Oil
   Dependent on the uniqueness of the flavour/odour
  profile. Degree of novelty, limited by the availability
  of substitutes. Can be considered novel, if considered
  a more cost effective source of a natural aroma
  chemical. Source of a natural aroma chemical, not
  previously known to exist in economically extractable
  quantities.
Evaluation Criteria
• The Perceived Potential uses and
  Applications of the New Essential Oil
 Perfumers and Flavourists must perceive
  applications potential. Material must be
  stable and versatile in harsh media of end
  products.
Evaluation Criteria
• The Closeness of any Substitutes to the New
  essential Oil
• Degree of ease new aroma from essential oil
  can be duplicated by synthesis or
  reconstitution. If close substitutes available,
  new material must be more cost effective.
Evaluation Criteria
• The Stability of the New essential Oil
• Stability as an essential oil and stability in end
  products.
Evaluation Criteria
• The Cost Price/Performance Ratio of the New
  Essential Oil
• Important in the application potential of the
  new essential oil. New material must offer a
  perceptible odour/flavour at low
  concentrations
Evaluation Criteria
• The Toxicity Aspects of the New Essential Oil
• Must be proven beyond doubt through expensive
  trials. Flavour and Fragrance houses will not consider
  using a new essential oil unless it meets IFRA safety
  and Toxicity recommendations and is included in the
  FEMA GRAS list. EU has recently regulated on a
  number of aroma materials
Evaluation Criteria
• The General Consistency of Quality and Supply
• Natural materials vary in quality according to
  geographic origin, type of soil, level of nutrients in
  the soil, climate and weather, rainfall, time of
  harvest, season, methods of extraction, altitude and
  the incidence of pests and diseases. Risks of supply
  from natural disasters, wars, political conditions and
  the inexperience of new producers
Evaluation Criteria
• The Prevailing Market/Product Trends
• Market and product trends slowly evolve.
  These are the results of complex forces such as
  technology, advertising and cultural influence
  upon consumer tastes and preferences. A
  particular essential oil may become more or
  less important to industry, depending upon
  these trends.
Evaluation Criteria
• The Current Level of Technology
• Technology influences substitutes that are
  available and the costs of production.
Media Reports                     The Continuum from media
                                                          reports to wisdom in relation
                                    Ideas                 to availability and usefulness
Availability Increases



                                         Data

                                            Information


                                                   Knowledge


                                                             Wisdom




                               Usefulness Increases
The Agronomic Characteristics Required for the New Essential Oil

   Genetic Material       Easily                     Need to
                         Available                   Develop
   Habitat &                                       Not Suitable
   Topography          Very Suitable                or Need to
   Suitability                                       Develop
   Soil Type,
   Texture &           Very Suitable              Not Suitable
   Drainage
   Suitability
   Temperature          Very Suitable             Out of Range
   Range
   Suitability

                       Very Suitable               Deficient or
   Rainfall
                                                    Excessive
   Suitability

   Access to               Yes                         No
   Irrigation


   Diurnal
                      Very Suitable               Out of Range
   Radiation

   Crop
                        Common &                     Require
   Maintenance
   Cycle                 Generic                   Specialized
                                                    Processes
   Pest, Disease &      Common &                     Require
   Weed Control
                         Generic                   Specialized
   Issues
                                                    Processes
   Harvest &                                         Require
                        Common &
   Extraction                                      Specialized
   Processes
                         Generic
                                                    Processes
The Project Characteristics.
Technology               Low &                       High &
Required                 Generic                    Specialized

Level of
Mechanization          Low and/or                   High and/or
Required                Generic                     specialized

Research &          Short & straight                  Long &
Development            forward                        Complex
Time-frame

Capital                    Low                         High
Requirements


Crop Cycle                Short                       Long
Timeframe

(Additional)
Infrastructure            Low
                                                       High
Required

Regulatory          Low Need of                    High Need of
Issues              Consideration                  Consideration
Skills,
Competencies
& Capabilities
                      Common &                        Rare &
Required               Generic                      Specialized
                        Available
Networks,                                           Need Network,
Market, Potential    Networks, Wide
                                                     Specialized
Competitors, etc.    Market & high
                                                     Market, Few
                      competition
                                                     Competitors
Potential
Revenue                    Low                          High
Competencies Required During the                                                                  Strategic and
                                                                                                      organizational
    Essential Oil Development Process                                                              competencies require:
                                                                                                   Administrative, financial
    Strategic, organizational,                                                                     management, technical
     relationship opportunity                                                                      management, strategic
      competencies require:                                                                        management, personnel
    Business strategic, industry                       Strategic, operations,                      management, resources
         knowledge, industry                           finance and technical                           management,
      networks, ability to raise                           management                                 entreprenuerial
       finance, ability to plan,
         implement & adjust,
    leadership, entrepreneurial
                                          Marketing &
                                        commercialisation                 Product & venture
                                                                            management
  Strategic, opportunity
        and technical
  competencies require:
   Project management,
  marketing management,
    chemistry, cosmetic            New product
   chemistry, perfumery/          development &
     flavour knowledge,
                                 creation of value
    Packaging & design,
        manufacturing           added products &
         engineering                 activities
                                                                             Sustaining and growing
                                                                                 the enterprise
Technical competencies                                                        (adapting & survival)
            require:
Thermodynamics and plant          Harvesting,
 physiology, heat transfer,      Extraction and
  distillation engineering,     wastage handling
    chemistry, chemical
 engineering, agricultural
engineering, environmental
    engineering (waste
        management)
                               Planting, cultivation
                                 & maintenance
                                                                           Output: Result/Performance,
                                                                       Sustainable and healthy enterprise or
Technical competencies
         require:                                                       a struggling and failing enterprise
 Bio-system engineering,
    Soil management,
entomology, plant nutrition,     Propagation &
    Agronomics, field                                                     Technical Competencies require:
  management, irrigation
                                domestication or
                                                                      Plant physiology, micro-propagation, nursery
       engineering                introduction
                                                                               management, agronomics


                                     Screening &                           Opportunity and technical
                                   Bio-prospecting                          competencies require:
                                                                      Botany, ethno-botany, research ability,
                                                                       chemistry, bio-chemistry, analytical
                                                                     chemistry. Market and specific technical
                                                                               product knowledge
A Simple Competency Audit Example (Hunter 2009, P. 299).
                Competency                     Present        Not       Comments
                                                            Present
  Technical
  1. Botany                                      Basic        Low     Need guidance
  2. Plant Physiology                                         Low     Need assistance
  3. Chemistry/Analytical                         Basic       Low     Need guidance
  4. Micro-propagation                         Experience     Low     Assistance
  5. Nursery Management                        Experience     Low     Available
  6. Environmental Engineering                 Experience     Low     Can design
  7. Chemical engineering/thermodynamics/etc      Basic       Low     Need appraisal
  8. Soil Management                              Basic       Low     Use contractor
  9. Agronomy/plant nutrition/field               Basic       Low     Use institute
      management                                                      Replicated
  10. Entomology                                                      experiments
  11. Irrigation engineering                                          With Environment
  12. Agricultural Engineering                                        Use contractor
  13. Regulation knowledge                                            Can develop
  14. Cosmetic chemistry/food etc                                     Need assistance
  15. Perfume/flavours                                                Learn from
  16. Packaging & design                                              experience
  17. Consumer product manufacturing                                  Use contractor
Competency                            Present        Not         Comments
                                                                       Present
Opportunity/Entrepreneurial/Commitment
1. Able to screen environment for opportunities              Yes                 Need to see realistically
2. Able to evaluate opportunities                            Yes
3. Commitment level                                       Passionate
Relationship
1. Have relationships in target industries                  A few
2. Have relationships in research area                      A few
3. Have relationships in finance industry                   Some
Organising/Management
1. Able to project manage                                    Yes
2. Able to administrate                                      Yes
3. Able to financially manage operation                      Yes
4. Able to undertake research                                Yes
5. Able to keep key people motivated                         Yes
Strategic
1. Understand dynamics of market and industry                Yes                 Believe so but not
     environment                                             Yes                 tested
2. Able to plan for a business within this environment       Yes
3. Able to implement, evaluate and adjust plans in this
     environment
The Farm Family
                                            Family & Farm History,
                                            Current farm Operation,
                                             Current Family Status.




                                              Family Values
      Self Assessment                                                                 Strategic Business
                                                                                           Analysis
     Decision Making Skills                                                                   Land
          Knowledge                                                                          Labour
                                                  The Vision
        Competencies                                                                         Capital
                                            “Mission Statement”



       Personal Goals                            Family Goals                            Business Goals




  Business               Aspirations             Family                  Land &               Investment
Competencies                                  Considerations             Estate                  Plan
                              Self view
   Knowledge                                     Generational           Valuing the            Time horizon
                         Income needs             evolution               estate
  Production &                                                                                 Investment
   Operations             Time Horizon            Grooming            Liquidity needs            options
                                                  successors
    Marketing                   View of                                Tax planning               Risk
                              retirement      Family aspirations                               management
    Personnel                                                         Alternative land
                           Opportunity             Lifestyle          use applications         Tax planning
    Financial             cost of doing
                         other activities         Attachment              Multi-                Opportunity
Risk Management                                                        use/business            cost of doing
                               Passion                                                        other activities
  Horizontal and
vertical expansion                                                                             Exit barriers
$ Cost                    Conceptual Value Added Processing
                                                                Options with Revenue and Cost
                                                                         Implications
                       Final Product

                         Product
                       Development
                       Harvesting &
Degree of Processing
                        Extraction
                         Planting,
                       Maintenance &
                         Irrigation
                        Propagation

                           Land
                        Preparation

                           Trials

                         Selection of
                            Crop
                                                                             Crude Essential Oil
 Crop &




                                                                                                                                                  Pharmaceutical
                                                                                                                                  Nutriceutical
                                                                                                                   Aromatherapy
                                                                                                   Organic Agro-
                                                                                                                                                                   $ Return
                                                    Biofuel

                                                               Animal Feed




                                                                                                                    Cosmetic &
                                        Compost &




 Project                                                                                              product
                                          Mulch




 Failure
   No
 Return


                                                                                                              Final Product Form
Venture Focus Along Different Parts of the Supply Chain

                                                                           Manufacture of end
                                                                            products. Focus on
                                                      Consumers            formulation and end           Consumer
                                                                                 product                  Trends
                                                                               development               Important


                                                 Wholesalers & retailers
Vertical Integration Along the Supply Chain




                                                                              Essential oil as
                                                                             an ingredient in
                                                                                a product.
                                                                              Focus on uses
                                                                             and applications    Technical           Branding
                                                                                 research         Trends             Theme
                                                     Manufacturers                               Important           Consumer
                                                                                                                     Marketing
                                                                             Essential oil as                        Reaching
                                                                                                      Application
                                                                            primary Product.                         Mass or
                                                                                                      Focus
                                                  Flavour & Fragrance       Focus on market
                                                                                                      Technology
                                                                                                                     selected
                                                                                                                     Markets
                                                        Houses              demand & supply
                                                                                                      Focus
                                                                              and meeting                            New Product
                                                                                standard              IP Focus (?)
                                                                                                                     Development
                                                                                                      Specific
                                                                                 Demand &             Customer
                                                   Traders & Brokers          Supply, Buying
                                                                             Criteria Important


                                                                               Technical
                                                   Primary Producer              Focus
                                                                               General or
                                                                               Niche
                                                                               Customers


                                                                              Agro                   Industrial      Consumer
                                                                            Orientation              Orientation     Orientation
Natural Product Development Process (Aromatic)

               Screening Process


                             Screening
       Biological               For
       Screening            Development
                              Potential


                              Regulatory
                              Screening
          Market
       Development          Environmental
                              Analysis


       Commercialis
           -ation           Evaluation of
         Strategies         Capabilites



                           Market Analysis
      Development
        Process

                              Technical
                             Development
The Natural Product Strategic Matrix
An Existing Crop – Product Already                        An Existing Crop – Leading to a New
              Traded                                                    Product
                                                          This may involve moving along the value chain to a new market
  This can be seen as an improvement on existing        based on an essential oil already produced or producing an essential
production or setting up new production in an area                    oil for some type of value added product.
            already producing the crop.                      Improving cultivation and harvesting methods to improve
                                                             productivity
    Improving cultivation and harvesting methods             Finding out what products potential customers want in a new
    to improve productivity                                  product
    Finding new customers and channels to                    Producing a new product according to identified consumer
                                                             needs
    increase sales                                           Organising the supply chain for the new product to get to
                                                             market
                                                             Making the product available to more consumers who are
                                                             likely to want it

A New Crop to a New Geographic Area                               A New Crop and New Product
This involves producing an essential oil already in This involves producing a product higher up the value chain,
                                                        differentiating it and producing the natural product.
        trade in a new geographical area.
                                                          Making informed decisions about new crop choices
   Establishing the most efficient way to                 Establishing the most efficient way to cultivate,
   cultivate, harvest and process the natural             harvest and process the natural product
   product                                                Finding out from potential customers what they want
   Matching the newly produced natural product            from the new product
   with customer expectations and requirements            Making sure the oil meets the customer’s needs as
                                                          closely as possible
   Organising the supply chain so the natural
                                                          Organising the supply chain so the natural product
   product reaches the market                             reaches the market
   Making the natural product available to new
   customers who are likely to require it
A typology of Various Farming Research Management Concepts


         Social

                                      Systems Agriculture            Participatory Action
                                      Agricultural professional            Research
                                      stance that emphasizes         Emphasis on co-learning
                                    farming as a social practice       through farmer and
           Discipline Orientation




                                       that uses technology          community participatory
                                                                   research and empowerment
                                                                            programs                     Shift from
                                                                                                     theoretical and
                                                                                                       technical to
                                                                                                        community
                                                                                                    collaboration and
                                     Traditional Academic             Farming Systems               problem specific
                                       Based Research                    Research                         research
                                       Based on developing         On-farm technical problem
                                    technology and principals,      diagnosis and adaptive
                                       models and possible                 research
                                            practices
     Technical
             General                                    Domain Focus                        Local
that there “is also the tendency for Asian countries, including
 Malaysia, to deal with the issue of values in development by
  Importing many technologies and systems wholesale from
     abroad without going through the process of mental
   transformation necessary to master them fully. Although
 Malaysia is going through rapid transformation, our growth
   is one without development in the context of knowledge
      contribution to science, engineering and technology.
         As long as we are consumers and operators of
       sophisticated techniques, plants and technologies
     imported wholesale from abroad, we are to a certain
extent undergoing a technology-less form of industrialization.
   This transformation of values and attitudes is a key issue
             in the nation’s development agenda”[i] .
[i]
 Asma, A., Going Glocal: Cultural Dimensions in Malaysian Management, Kuala Lumpur,
Malaysian Institute of Management, 1995, P. 179.
Tissue Culture
Microwave Oven           Pressure Cooker




Chemicals & Spoons, etc.      Glassware
• Minimise Production scale to account for initial low
        sales/production quantities and lower capital investment



•   Mobile GMP Facility




    •   Simplified Technology
Culture
Theories in action                         Stories, myths, heroes, artifacts, informal
                                                           behaviours
verses Espoused

Norms and group      Productivity Values
                                            Organisational
behaviour                  &
                                            learning (single or
                     effectiveness
                                            double looped



    Leadership
                                Beliefs




                           Assumptions
The Cultural Dialectic




                         Destruction




       Negative
       Attributes

                                                Positive
                                                Attributes




                                       Growth
Modifying your emotional balance to become more effective, break
through psychological blocks and become generally more positive.


    Fearful                                                                Positive
  Awkward
   Anxious                                                                Emotions
 Intimidated
     Tense                      Develop positive emotions
     Panic     Reduce negative until they dominate feeling                  Confident
    Scared                              & thinking                           Courage
                emotions until
  Confused                                                                  Passionate
               they don’t exist                                              Energetic
Overwhelmed
Apprehensive     within your                                               Determined
   Shocked       feelings and                                              Challenged
  Confused         thinking                                                Competitive
   Blurred                                                                   Focused



Negative
Emotions                 Develop Self-esteem, confidence and motivation
Courage        The different sets of
                emotions will heavily
               influence performance.
 Passionate

 intimidated

Determined

  Energetic

Overwhelmed

  Anxious

 Challenging
Different weight and balance of emotions may
“Big-headed”    produce different behaviour & performance

 Confused
 Awkward
   Tense
   Scared
Overwhelmed
    Shy
Passionate
 Confident
  Excited
Society & family, peers &                                     Influence on other paradigms
role models, assumptions,
values, beliefs, learning,
mentors, perceptions                                          Peer groups mentors,
                                                              society




                                   Cultural
                                  Paradigm
                                                              Commitment and ethics


Upbringing and family                                         Social & Educational
background, education and                                     Background
life experiences, stressful
unexpected events, fate




                                   Paradigm
                                              Chance & Fate
                                                              Identify and exploit
Looking for benefits,                                         opportunities
effective performance,
able to secure resources,
overall vision, able to                                       Resource gathering
weigh things up in




                                  Paradigm
                                  Strategic
strategic way                                                 Customer orientated
Environment, peers, family,
culture, realities, motivation,                                 Sense of achievement
dedication, self assurance,
self perception, morality,                                      Motivation &
responsibility,                                                 determination
accountability, adversity to




                                   Paradigm
                                  Personality
risk taking (courage), stand
on beliefs, level of comfort                                  Adversity to risk taking

Environment, triggers,                                          Seek & identify
inspiration, lateral &                                          opportunities
serial thinking,
technical skills, ideas,
opportunities, solution
                                                                  Innovative
                                  Paradigm
                                  Creativity




finding

Health, personal energy,
focus, time orientation,
orientation to getting things                                 In control of the
done, orientation towards                                     business
                                   Action




getting the right things
                                  Paradigm
                                                                                             Attributes of the Entrepreneur




done
                                                              Able to inspire
Selecting the right people,
team/individual orientation,
                                                              people
view of outside expertise,
networking, interpersonal                                       Ability to work
outlooks, management style,                                     with people
leadership,
                                   Paradigm




dominance/submissiveness                                        Networking
                                  Interpersonal




Positive & negative                                             Experience
experiences, success &
failure, education &
skills, soft skills, talents                                    Technical skills
and abilities
                                    Skills
                                  Paradigm




                                                                Soft skills

                                                              Talents & abilities
Attribute                       Small Business                                Entrepreneurial Business
      Risk           Risk is to be avoided by undertaking a business     Ideas and opportunities are always risks. Every
                           activity that is already proven to be               village and every person is unique and will
                           successful. Therefore business models will          have different ideas that suit them.
                           not be novel.
 Need to Achieve     A small business is totally orientated towards a    Financial return may not be the prime motivator.
                         financial return.                                    Individuals and groups may want to produce
                                                                              something they like and have pride in.
   Creativity        An enterprise will fit into a proven model so not   The enterprise from the first idea may be driven
                          much creativity is needed.                          by many types of creativity, and creativity
                                                                              itself may be a source of satisfaction.
   Flexibility       A small business is a business operated through     Individuals and groups may be looking for
                         a disciplined routine in most cases.                  maximum flexibility in an enterprise, so it
                                                                               can fit in with their life, rather than they
                                                                               have to fit in with the small business.
     Change          Small businesses rely on little environmental       Change in the environment may suit individuals
                          change for success.                                and groups as they don’t want to get locked
                                                                             into routine, and change prototes their
                                                                             creativity.
  Independence       Financial independence is the objective.            We are already independent and don’t want a
                                                                              business to lock us into a strict routine.
    Foresight        A daily, weekly, monthly or seasonal cycle that     We may have to keep coming up with new things
                          is predictable.                                    to keep the enterprise going.
    Initiative       There are very tight resources to have much         We rely on initiative to keep going, and all
                          initiative.                                         initiatives are considered.
Control of destiny   The future is controlled by sales in the            The future is in our hands of what we want to be.
                          marketplace.
  Commitment         Total commitment.                                   I want to be committed on my terms.

   Leadership        I am the leader and do all tasks.                   Leadership is defined by tasks.
Peer based Education
Market
Haram
            (Those things prohibited by                              Traceable
               Allah in the Al Qu’ran)

    Sustainable                           HACCP
environment, community
      & business

                                                    Supply             GMP
                                                    Chain

   Community
     Benefit
                                                              Toyyibaan


Non-exploitive
                                          Ethical                       Healthy
                                                             Clean
Culture is the Challenge
1. Recognition                                   2. Desirability

Selected branding paradigm to highlight the         The product technology, i.e., natural,
project’s offering and values the group stand   organic, cultural and spiritual aspects should
  for in the international marketplace. (see     be reflected incorporated into the product.
 figure branding typologies). This branding        Thus the products require specific new
should show natural (fully natural products)    knowledge, process and protocols to achieve
       Organic, Sustainable production,                        these ambitions.
    Community involvement, cultural and          Patents, Registered Designs, Proprietary
   religious identity, and within an ethical             Knowledge and branding
             business framework.
    Trademarks and certain Copyright
                 Information

                  3. Form                                4. Emotional Connection

 Product manifestations must reflect where       The products should reflect the consumer
 and why the products exist through copy,        ambitions for natural and organic products
           materials and form.                     with a cultural and spiritual base and
      Copyrights and Trademarks                  understand their direct contribution to the
                                                                community.
                                                        Brands and Trademarks
Organization
K-Development Model
                                         Network              University Training
                                                                  • Students
      R&D                                                       Funding Through
      Cluster              Initial Grant                          • Farmers
                                                                Prospectus
                            • UNDP
                Umbrella Brand (Direct Marketing Company)
                          •Prospectus
                                 • Zakat                                          Entrepre-
                                  • VC                                            neurship
     Application of University
               R&D
       Health                              Graduates Under University
     Beverages                                    Supervision
                                                      Nutraceuticals
                                  Herbs &
                                 Cosmetics     • Drive Marketing
                                                                             Others
                                            • Product Development
  Govt.                                          Organic Farming
                                             • Business Operations
  Support                                          Integrated Farming
Element                                                Existence

        Values            Most spiritual doctrines and religions have very positive values towards
                              enterprise, independence and empowerment. These have to be brought to
                              the surface of some cultures or sub-cultures, i.e., refocusing on the
                              functional rather than the dysfunctional aspects.

     Confidence           Confidence is a group phenomena and can be improved through engagement of
                              group processes to achieve new ways of seeing.

        Ideas             The skills of ideation can be developed through access to communications
                              technology and developing both partial and whole brain thinking.

Potential Opportunities   By linking ideas to markets, modes of entry, resources and skill needs, potential
                               opportunities can be constructed.
       Product            Focus on themes rather than marketing mixes, look for ways to incorporate
                              consumer fears, existence, acceptance, hopes and dreams in the product
                              (spiritual materialism)
       Markets            Markets exist in various forms and segmentations with much more
                             fragmentation, coupled with the ability to communicate are potentially
                             accessible to village communities. Identify aspirations of consumers,
                             connect products and channels to these aspirations.

     Technology           Technology is a way of how to make and do things. Product manufacture can be
                              undertaken in scaled down models to suit decentralization, small unit
                              output and flexibility. The focus is on how to do things in more cost effective
                              ways, within the existing cultural socio-organisational setting.
Competitive Advantage   In many FMCG markets competitive advantage has more to do with theme,
                            schema and branding, through selected channels of distribution, than
                            economies of scale. The product is a fulfiller of dreams.

        Skills          Not all the skills taught at formal educational institutions are needed to start an
                            enterprise. In this regard its only necessary to provide people with what
                            they need from the point of view of business, product development and
                            production. There is a need for the “village university” to focus on showing
                            people how to see, learn how to do and connect to consumers.
  Agency/Networks       Through modern communications technology (internet & travel) it is now
                            possible to contact and interact with very wide groups of people, including
                            agencies of interest, customers, grant agencies and sourcing know-how.

      Logistics         Logistics have advanced in recent years and can be coupled together such as the
                            internet and EMS to create direct logistic systems between producers and
                            consumers.
     Resources          We have to learn to use what we have and utilize these limited resources
                            innovatively. There are many methods of alternative funding that can be
                            explored and set up, i.e., Zakat, unit trusts, closed equity markets, etc.

    Organisation        New forms need to be generated from often discarded forms such as
                            cooperatives. Cooperatives can exist at both production and market levels.
                            People can form their own companies under umbrellas, organizations
                            should be focused on linking the young with their older generation.
                            Coalitions can be sort with larger organizations in developed countries for
                            branding and market purposes. Organisations have to fit with existing
                            social schema and develop from there, as people are ready.
The company would act according to the following
          principals;
          1. Commitment to Social Justice in Organic Agriculture
          2. Transparency and Accountability
          3. Direct and long-term trade relationships built on trust
          and mutual respect.
          4. Equitable distribution of returns to stakeholders
          5. Communication and information flow
          6. Skills development and capacity building
          7. Internal ethics, and
          8. Professionals manning the PC, support the local
          community[i].



[i]   Principals set out for peoples companies by Dr. Subash Mentha, Bangalore, India, as communicated to the author.
Resources &
  Finance
Resources (Infrastructure)
Zakat
• One of the 5 pillars
• Distributive justice (juristic & mandatory)
• “zakat revenue can be spent under tamlik
  mechanism for providing an opportunity or raising
  productivity of the poor. Viewed from the long term
  perspective the poor would become in time self-
  reliant, hense reducing the national burden of
  spending money on social security schemes.”
  Khaliq Ahmad 2002 Intellectual Discourse Vol. 8, no. 2
  (IIUM)
A Roadmap from today


                                    Skills (how to make), place to make,
     Look for Resources                            finance



                                   Determine whether there is a market
                                   and how much competition there is.
Screen the Idea for opportunity   Determine if the product can be made.


                                   Decide on what product each group
                                  would want to be involved in and match
                                   this with an expert person and some
      Create Ideas                               students.
The set of opportunities for an essential oil producer




General Trading                                          Other Aromatic                                     Aromatic Chemical                 Agro-Tourism             Agricultural
 (marketing)                   Essential Oil                Extract                                            (bio-route)                                             By-Products
 Region’s production
 Specialised single oil
 marketing
 General multi-oil
 marketing
                                                                                                                                                                                Mulches

                                       Aromatic Chemical
                                        (physical route)

                                                                                                                                                                                Bio-fuel

Commodity Oil               Single Crop                                                                 Portfolio of Crops


  Specialty Oil                    Flavour &                    Business through select supply chains                                                                         Cattle feeds
                                   Fragrance
                                                                                                            Builds brand image and support.
Aroma Chemical                                                                                              Complements other activities.

                               Aromatherapy &                                                                                                                                    Paper
                                  Cosmetic


Production &
marketing of                    Pharmaceutical                                                                Other diversification
  products                                                                                                                                      Production of herbs
                                                                                                                                                    and spices


                                Agro-chemical




               Higher differentiation and value adding                                                     Diversification of activities                        Utilisation of wastes
Opportunities are a product of our mind and
 these visions can become the design of our
future with skilful and creative utilisation of
scattered existing and forgotten resources to
 create great unimagined synergies. This is
  the true power of creativity that God has
              given humankind.
Those who believe and work righteous deeds-
from them shall We blot out all evil (that may be)
 in them, and We shall reward them according to
             the best of their deeds.




                            Al ‘Anabut (29:7)
Terima Kasih

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Developing natural products and new value chains in Kelantan: What, How and for whom

  • 1. Developing Natural Products and New Value Chains in Kelantan while Maintaining Cultural Integrity: What, How and for Whom Mohd. Murray Hunter University Malaysia Perlis (UniMAP) Keynote address to the Conference on Natural Products: Integrating Traditional Practices & Technology Advancement for Creating Business Opportunities, 21-22nd November, Grand River View Hotel, Kota Bahru, Kelantan, Malaysia
  • 2. “On one hand, rural development starts with people and their education, organization, and discipline. Without these three, all resources remain latent, untapped potential” E.F. Schumacher 1975, P. 168.
  • 3. The importance of Kelantanese Culture
  • 4. Product Space Map of Kelantan Agricultural Activities Other Activities Biotechnology Education Rubber Fruit Production Agro-Industry Fishing Palm Oil Vegetable Production Agro-Tourism Industry Service Transport Paddy Other Crops Handicraft Logging Construction
  • 5. Requires focus on concept of product where present Focus focus is on cultivation This requires research Paradigm This requires entrepreneurship approach Concepts not understood by farmers Needs access to worldwide data Basic Requires availability of suitable germ-plasmas Requires basic R&D to determine whether crop Research technically suitable Requires basic R&D to determine if potential crop is economically feasible
  • 6. Crop Propagation technologies How to plant, cultivate & manage to crop Management & How to harvest, extract, store and handle Processing How to process How to package Transportation and storage Marketing Require coordination of production with demand Require correct channels of distribution Infrastructure Requires a marketing strategy Economies and Requires enough volume to economically transport and distribute Logistics Requires solution to inconsistencies of quality and production
  • 7. Organisation Need committed people with strong leadership and trust Government Need to translate support into action Need funding allocations Finance Very difficult to obtain funding for these projects Consumers Need efforts for education & promotion Partly modified from Kee, T. B., Monoculture in Malaysia: Impacts, Potential Solutions, paper presented to Monocultures: Environmental and Social Effects and Sustainable Alternatives Conference, Songkhla, Thailand, 2-6 June, 1996.
  • 8.
  • 9. Raw Herbs Traditional Herbal Medicines Fresh Dried Consumption Fermented Medicinal Medicinal Powders Beverages Extracts Standardised Extracts Fractions & Isolates Phytopharmaceutical Bioactive Products Compounds Prescription & OTC Enzymes Essential Oils & Drugs Other Volatiles Agricultural Personal Care Flavour & Aromatherapy Application & Cosmetics Fragrance Figure 1: The Family Tree of Herb Derivatives
  • 11. Unani Ayurveda Siddha
  • 12.
  • 13.
  • 14.
  • 15.
  • 16. Berberine Berberis vulgaris Quaternary Ammonium Compound Fungal infections Diabetes mellitus Intestinal disorders Coptis chinensis Represses tumor growth Antidepressant
  • 17.
  • 18.
  • 19.
  • 21.
  • 22.
  • 23.
  • 33. New Foreign Products Essential Oil Based Fungicides/Insecticides Control Nimgard + Kocide Timorex 0.5 % Timorex 1 %
  • 34. Powdery Mildew in Sage Field results Sage a 7 Disease rating ( 1-10 ) 6 5 4 b 3 b 2 b 1 0 Control Neemgard 1% Timorex 0.5% Timorex 1% Treatment Five foliar sprays at 7-d intervals
  • 35. Powdery Mildew in Parsley Field Results Parsley a 50 45 40 Percent infected leaves 35 b 30 25 20 bc 15 10 c 5 c 0 Contol Timorex 0.25% Timorex 0.5% Timorex 1% Nimgard+Kocide Treatment Five foliar sprays at 7-day intervals
  • 36. Prophylactic activity grape downy mildew Adelaide, Au. Field Results Grapes 35 Percent infected leaf area Treatment & Prophylactic 30 25 20 grape PM- Carignan 15 Treatment Percent infected clusters 10 Control 48.8 a 5 Timorex 0.5% 0.5 b 0 Timorex 1% 0.0 b Control Timorex 0.5% Copper 0.5% Tebuconazole 0.02% 0.0 b Treatment Plants were infected 2 days after spraying 4 foliar sprays at 14-d intervals Disease was rated 14 days after inoculation
  • 37. Powdery Mildew by Timor Field Results Grapes Control of grape DM- 2003 5 foliar sprays at 7-d intervals Timor 0.5% Control 70 Percent infected leaves 60 50 grape PM- Chardonnay 2003 40 70 Percent infected clusters 30 60 1st Rating 1.7.03 20 2nd Rating 15.7.03 50 10 40 0 30 Control Timorex 1% Kocide 0.25% 20 Treatment 10 0 Control Timor 0.5% Heliosulfur 0.5% Treatment
  • 40.
  • 41. Common Enzymes, Potential Sources and Other Potential Applications Enzyme Potential Sources Potential Applications Ascorbic acid Citrus fruits, leaf vegetables, Fruit preservation, cleaning oxidase cucumbers applications Beta-amylase Grains, sweet potatoes, taro, Yeast production cassava Bromelains Pineapples Fertilisers, pseudo hormones, cleaning, cosmetics, personal care, mouthwashes, skin healing, anti- acne, anti-microbial Catalase Animal wastes, milk wastes Cosmetic, anti-ageing, oxidising Chlorophyllase Some leaf vegetables UV absorption Elastase Animal intestines Cosmetics, anti-aging Glucoxidase Some mushrooms, mould, other Anti-oxidant fungi Papain Papaya Fertilisers, wound and skin healing, mouthwashes, other cosmetics, dishwashing, all purpose cleaning
  • 42.
  • 44.
  • 45.
  • 46.
  • 47. Organic Herbicides Before Product Reported Results* Control O Round Up 10 Pro[i] All-Down Range 0.5 – 3.8 Organic[ii] [i] Registered Trademark of Monsanto. [ii] http://alldownherbicide.com/ After
  • 48. Pharmaceuticals: Artemisia annua A source of artemisinin for treatment of malaria World Shortage Straight forward cultivation
  • 49. The Stages Involved in the Development of a Pharmaceutical Product Discovery: 2-10 years The extraction or synthesis of a new clinical or biological substance Preclinical Testing: 4 years Laboratory and animal testing Clinical trials: 7 years Phase 1 20-80 health volunteers used to determine safety, pharmacological and dosage. Clinical trials: Phase 2 100-300 patient volunteers used to determine safety and efficacy Clinical Trials: Phase 3 1000-5000 volunteer patients used to determine clinical health benefit and incidence of adverse reactions TGA Registration 1.5-2 years 35-40K pages of data submitted for evidence on average Pharmaceutical Benefits Scheme: 8 months Determination of cost effectiveness Product Promoted to the Medical Profession Post Marketing Monitoring: monitor safety and efficacy when used in wider population, with other diseases and taking other medicines.
  • 50.
  • 51. Screening • Require Knowledge of Essential Oil Applications • Require knowledge of International Market • Require Knowledge of International Regulations • Need to Collaborate with Industry Parties
  • 52. Screening Protocols • Anti inflammatory • Anti microbial • Skin whitening • UV absorbing • Anti age actives • Flavour & fragrance application • Aromatherapy
  • 53. Regulatory Screening • United States - GRAS (Genarally Regarded as Safe) • RIFM – Collections of Monographs • Food and Drug Administration • Europe – REACH, BPD, SCP
  • 54. Ranking Criteria 1. Potential Returns 2. Production Costs 3. Capital Investment 4. Crop Suitability 5. Risk 6. Time Frame of Opportunity 7. Level of Difficulty to enter Market 8. Personal Bias
  • 55. A Grid showing the characteristics of a new essential oil The novelty of a A C D B new essential oil Low Novelty High Novelty The potential uses & applications Low Potential High Potential of the new essential oil Close No Close The closeness of any substitutes Substitutes Substitutes The stability of Poor Stability Good Stability the essential oil in applications The Poor Ratio Good Ratio cost/performance ratio The Toxicity High Toxicity Low Toxicity The general Low consistency of High quality and supply Consistency Consistency The prevailing Low Trend High Trend market/product Match trends Match The current High Low level of likelihood of Likelihood of technology synthesis Synthesis
  • 56. Evaluation Criteria (Aroma) • The Novelty of the new essential Oil Dependent on the uniqueness of the flavour/odour profile. Degree of novelty, limited by the availability of substitutes. Can be considered novel, if considered a more cost effective source of a natural aroma chemical. Source of a natural aroma chemical, not previously known to exist in economically extractable quantities.
  • 57. Evaluation Criteria • The Perceived Potential uses and Applications of the New Essential Oil Perfumers and Flavourists must perceive applications potential. Material must be stable and versatile in harsh media of end products.
  • 58. Evaluation Criteria • The Closeness of any Substitutes to the New essential Oil • Degree of ease new aroma from essential oil can be duplicated by synthesis or reconstitution. If close substitutes available, new material must be more cost effective.
  • 59. Evaluation Criteria • The Stability of the New essential Oil • Stability as an essential oil and stability in end products.
  • 60. Evaluation Criteria • The Cost Price/Performance Ratio of the New Essential Oil • Important in the application potential of the new essential oil. New material must offer a perceptible odour/flavour at low concentrations
  • 61. Evaluation Criteria • The Toxicity Aspects of the New Essential Oil • Must be proven beyond doubt through expensive trials. Flavour and Fragrance houses will not consider using a new essential oil unless it meets IFRA safety and Toxicity recommendations and is included in the FEMA GRAS list. EU has recently regulated on a number of aroma materials
  • 62. Evaluation Criteria • The General Consistency of Quality and Supply • Natural materials vary in quality according to geographic origin, type of soil, level of nutrients in the soil, climate and weather, rainfall, time of harvest, season, methods of extraction, altitude and the incidence of pests and diseases. Risks of supply from natural disasters, wars, political conditions and the inexperience of new producers
  • 63. Evaluation Criteria • The Prevailing Market/Product Trends • Market and product trends slowly evolve. These are the results of complex forces such as technology, advertising and cultural influence upon consumer tastes and preferences. A particular essential oil may become more or less important to industry, depending upon these trends.
  • 64. Evaluation Criteria • The Current Level of Technology • Technology influences substitutes that are available and the costs of production.
  • 65. Media Reports The Continuum from media reports to wisdom in relation Ideas to availability and usefulness Availability Increases Data Information Knowledge Wisdom Usefulness Increases
  • 66. The Agronomic Characteristics Required for the New Essential Oil Genetic Material Easily Need to Available Develop Habitat & Not Suitable Topography Very Suitable or Need to Suitability Develop Soil Type, Texture & Very Suitable Not Suitable Drainage Suitability Temperature Very Suitable Out of Range Range Suitability Very Suitable Deficient or Rainfall Excessive Suitability Access to Yes No Irrigation Diurnal Very Suitable Out of Range Radiation Crop Common & Require Maintenance Cycle Generic Specialized Processes Pest, Disease & Common & Require Weed Control Generic Specialized Issues Processes Harvest & Require Common & Extraction Specialized Processes Generic Processes
  • 67. The Project Characteristics. Technology Low & High & Required Generic Specialized Level of Mechanization Low and/or High and/or Required Generic specialized Research & Short & straight Long & Development forward Complex Time-frame Capital Low High Requirements Crop Cycle Short Long Timeframe (Additional) Infrastructure Low High Required Regulatory Low Need of High Need of Issues Consideration Consideration Skills, Competencies & Capabilities Common & Rare & Required Generic Specialized Available Networks, Need Network, Market, Potential Networks, Wide Specialized Competitors, etc. Market & high Market, Few competition Competitors Potential Revenue Low High
  • 68. Competencies Required During the Strategic and organizational Essential Oil Development Process competencies require: Administrative, financial Strategic, organizational, management, technical relationship opportunity management, strategic competencies require: management, personnel Business strategic, industry Strategic, operations, management, resources knowledge, industry finance and technical management, networks, ability to raise management entreprenuerial finance, ability to plan, implement & adjust, leadership, entrepreneurial Marketing & commercialisation Product & venture management Strategic, opportunity and technical competencies require: Project management, marketing management, chemistry, cosmetic New product chemistry, perfumery/ development & flavour knowledge, creation of value Packaging & design, manufacturing added products & engineering activities Sustaining and growing the enterprise Technical competencies (adapting & survival) require: Thermodynamics and plant Harvesting, physiology, heat transfer, Extraction and distillation engineering, wastage handling chemistry, chemical engineering, agricultural engineering, environmental engineering (waste management) Planting, cultivation & maintenance Output: Result/Performance, Sustainable and healthy enterprise or Technical competencies require: a struggling and failing enterprise Bio-system engineering, Soil management, entomology, plant nutrition, Propagation & Agronomics, field Technical Competencies require: management, irrigation domestication or Plant physiology, micro-propagation, nursery engineering introduction management, agronomics Screening & Opportunity and technical Bio-prospecting competencies require: Botany, ethno-botany, research ability, chemistry, bio-chemistry, analytical chemistry. Market and specific technical product knowledge
  • 69. A Simple Competency Audit Example (Hunter 2009, P. 299). Competency Present Not Comments Present Technical 1. Botany Basic Low Need guidance 2. Plant Physiology Low Need assistance 3. Chemistry/Analytical Basic Low Need guidance 4. Micro-propagation Experience Low Assistance 5. Nursery Management Experience Low Available 6. Environmental Engineering Experience Low Can design 7. Chemical engineering/thermodynamics/etc Basic Low Need appraisal 8. Soil Management Basic Low Use contractor 9. Agronomy/plant nutrition/field Basic Low Use institute management Replicated 10. Entomology experiments 11. Irrigation engineering With Environment 12. Agricultural Engineering Use contractor 13. Regulation knowledge Can develop 14. Cosmetic chemistry/food etc Need assistance 15. Perfume/flavours Learn from 16. Packaging & design experience 17. Consumer product manufacturing Use contractor
  • 70. Competency Present Not Comments Present Opportunity/Entrepreneurial/Commitment 1. Able to screen environment for opportunities Yes Need to see realistically 2. Able to evaluate opportunities Yes 3. Commitment level Passionate Relationship 1. Have relationships in target industries A few 2. Have relationships in research area A few 3. Have relationships in finance industry Some Organising/Management 1. Able to project manage Yes 2. Able to administrate Yes 3. Able to financially manage operation Yes 4. Able to undertake research Yes 5. Able to keep key people motivated Yes Strategic 1. Understand dynamics of market and industry Yes Believe so but not environment Yes tested 2. Able to plan for a business within this environment Yes 3. Able to implement, evaluate and adjust plans in this environment
  • 71.
  • 72. The Farm Family Family & Farm History, Current farm Operation, Current Family Status. Family Values Self Assessment Strategic Business Analysis Decision Making Skills Land Knowledge Labour The Vision Competencies Capital “Mission Statement” Personal Goals Family Goals Business Goals Business Aspirations Family Land & Investment Competencies Considerations Estate Plan Self view Knowledge Generational Valuing the Time horizon Income needs evolution estate Production & Investment Operations Time Horizon Grooming Liquidity needs options successors Marketing View of Tax planning Risk retirement Family aspirations management Personnel Alternative land Opportunity Lifestyle use applications Tax planning Financial cost of doing other activities Attachment Multi- Opportunity Risk Management use/business cost of doing Passion other activities Horizontal and vertical expansion Exit barriers
  • 73. $ Cost Conceptual Value Added Processing Options with Revenue and Cost Implications Final Product Product Development Harvesting & Degree of Processing Extraction Planting, Maintenance & Irrigation Propagation Land Preparation Trials Selection of Crop Crude Essential Oil Crop & Pharmaceutical Nutriceutical Aromatherapy Organic Agro- $ Return Biofuel Animal Feed Cosmetic & Compost & Project product Mulch Failure No Return Final Product Form
  • 74. Venture Focus Along Different Parts of the Supply Chain Manufacture of end products. Focus on Consumers formulation and end Consumer product Trends development Important Wholesalers & retailers Vertical Integration Along the Supply Chain Essential oil as an ingredient in a product. Focus on uses and applications Technical Branding research Trends Theme Manufacturers Important Consumer Marketing Essential oil as Reaching Application primary Product. Mass or Focus Flavour & Fragrance Focus on market Technology selected Markets Houses demand & supply Focus and meeting New Product standard IP Focus (?) Development Specific Demand & Customer Traders & Brokers Supply, Buying Criteria Important Technical Primary Producer Focus General or Niche Customers Agro Industrial Consumer Orientation Orientation Orientation
  • 75. Natural Product Development Process (Aromatic) Screening Process Screening Biological For Screening Development Potential Regulatory Screening Market Development Environmental Analysis Commercialis -ation Evaluation of Strategies Capabilites Market Analysis Development Process Technical Development
  • 76. The Natural Product Strategic Matrix An Existing Crop – Product Already An Existing Crop – Leading to a New Traded Product This may involve moving along the value chain to a new market This can be seen as an improvement on existing based on an essential oil already produced or producing an essential production or setting up new production in an area oil for some type of value added product. already producing the crop. Improving cultivation and harvesting methods to improve productivity Improving cultivation and harvesting methods Finding out what products potential customers want in a new to improve productivity product Finding new customers and channels to Producing a new product according to identified consumer needs increase sales Organising the supply chain for the new product to get to market Making the product available to more consumers who are likely to want it A New Crop to a New Geographic Area A New Crop and New Product This involves producing an essential oil already in This involves producing a product higher up the value chain, differentiating it and producing the natural product. trade in a new geographical area. Making informed decisions about new crop choices Establishing the most efficient way to Establishing the most efficient way to cultivate, cultivate, harvest and process the natural harvest and process the natural product product Finding out from potential customers what they want Matching the newly produced natural product from the new product with customer expectations and requirements Making sure the oil meets the customer’s needs as closely as possible Organising the supply chain so the natural Organising the supply chain so the natural product product reaches the market reaches the market Making the natural product available to new customers who are likely to require it
  • 77. A typology of Various Farming Research Management Concepts Social Systems Agriculture Participatory Action Agricultural professional Research stance that emphasizes Emphasis on co-learning farming as a social practice through farmer and Discipline Orientation that uses technology community participatory research and empowerment programs Shift from theoretical and technical to community collaboration and Traditional Academic Farming Systems problem specific Based Research Research research Based on developing On-farm technical problem technology and principals, diagnosis and adaptive models and possible research practices Technical General Domain Focus Local
  • 78.
  • 79. that there “is also the tendency for Asian countries, including Malaysia, to deal with the issue of values in development by Importing many technologies and systems wholesale from abroad without going through the process of mental transformation necessary to master them fully. Although Malaysia is going through rapid transformation, our growth is one without development in the context of knowledge contribution to science, engineering and technology. As long as we are consumers and operators of sophisticated techniques, plants and technologies imported wholesale from abroad, we are to a certain extent undergoing a technology-less form of industrialization. This transformation of values and attitudes is a key issue in the nation’s development agenda”[i] . [i] Asma, A., Going Glocal: Cultural Dimensions in Malaysian Management, Kuala Lumpur, Malaysian Institute of Management, 1995, P. 179.
  • 81.
  • 82.
  • 83. Microwave Oven Pressure Cooker Chemicals & Spoons, etc. Glassware
  • 84.
  • 85.
  • 86.
  • 87.
  • 88.
  • 89. • Minimise Production scale to account for initial low sales/production quantities and lower capital investment • Mobile GMP Facility • Simplified Technology
  • 90.
  • 91.
  • 92.
  • 93. Culture Theories in action Stories, myths, heroes, artifacts, informal behaviours verses Espoused Norms and group Productivity Values Organisational behaviour & learning (single or effectiveness double looped Leadership Beliefs Assumptions
  • 94.
  • 95.
  • 96. The Cultural Dialectic Destruction Negative Attributes Positive Attributes Growth
  • 97. Modifying your emotional balance to become more effective, break through psychological blocks and become generally more positive. Fearful Positive Awkward Anxious Emotions Intimidated Tense Develop positive emotions Panic Reduce negative until they dominate feeling Confident Scared & thinking Courage emotions until Confused Passionate they don’t exist Energetic Overwhelmed Apprehensive within your Determined Shocked feelings and Challenged Confused thinking Competitive Blurred Focused Negative Emotions Develop Self-esteem, confidence and motivation
  • 98. Courage The different sets of emotions will heavily influence performance. Passionate intimidated Determined Energetic Overwhelmed Anxious Challenging
  • 99. Different weight and balance of emotions may “Big-headed” produce different behaviour & performance Confused Awkward Tense Scared Overwhelmed Shy Passionate Confident Excited
  • 100. Society & family, peers & Influence on other paradigms role models, assumptions, values, beliefs, learning, mentors, perceptions Peer groups mentors, society Cultural Paradigm Commitment and ethics Upbringing and family Social & Educational background, education and Background life experiences, stressful unexpected events, fate Paradigm Chance & Fate Identify and exploit Looking for benefits, opportunities effective performance, able to secure resources, overall vision, able to Resource gathering weigh things up in Paradigm Strategic strategic way Customer orientated Environment, peers, family, culture, realities, motivation, Sense of achievement dedication, self assurance, self perception, morality, Motivation & responsibility, determination accountability, adversity to Paradigm Personality risk taking (courage), stand on beliefs, level of comfort Adversity to risk taking Environment, triggers, Seek & identify inspiration, lateral & opportunities serial thinking, technical skills, ideas, opportunities, solution Innovative Paradigm Creativity finding Health, personal energy, focus, time orientation, orientation to getting things In control of the done, orientation towards business Action getting the right things Paradigm Attributes of the Entrepreneur done Able to inspire Selecting the right people, team/individual orientation, people view of outside expertise, networking, interpersonal Ability to work outlooks, management style, with people leadership, Paradigm dominance/submissiveness Networking Interpersonal Positive & negative Experience experiences, success & failure, education & skills, soft skills, talents Technical skills and abilities Skills Paradigm Soft skills Talents & abilities
  • 101. Attribute Small Business Entrepreneurial Business Risk Risk is to be avoided by undertaking a business Ideas and opportunities are always risks. Every activity that is already proven to be village and every person is unique and will successful. Therefore business models will have different ideas that suit them. not be novel. Need to Achieve A small business is totally orientated towards a Financial return may not be the prime motivator. financial return. Individuals and groups may want to produce something they like and have pride in. Creativity An enterprise will fit into a proven model so not The enterprise from the first idea may be driven much creativity is needed. by many types of creativity, and creativity itself may be a source of satisfaction. Flexibility A small business is a business operated through Individuals and groups may be looking for a disciplined routine in most cases. maximum flexibility in an enterprise, so it can fit in with their life, rather than they have to fit in with the small business. Change Small businesses rely on little environmental Change in the environment may suit individuals change for success. and groups as they don’t want to get locked into routine, and change prototes their creativity. Independence Financial independence is the objective. We are already independent and don’t want a business to lock us into a strict routine. Foresight A daily, weekly, monthly or seasonal cycle that We may have to keep coming up with new things is predictable. to keep the enterprise going. Initiative There are very tight resources to have much We rely on initiative to keep going, and all initiative. initiatives are considered. Control of destiny The future is controlled by sales in the The future is in our hands of what we want to be. marketplace. Commitment Total commitment. I want to be committed on my terms. Leadership I am the leader and do all tasks. Leadership is defined by tasks.
  • 103.
  • 104.
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  • 118.
  • 119.
  • 120.
  • 121.
  • 122.
  • 123. Market
  • 124.
  • 125. Haram (Those things prohibited by Traceable Allah in the Al Qu’ran) Sustainable HACCP environment, community & business Supply GMP Chain Community Benefit Toyyibaan Non-exploitive Ethical Healthy Clean
  • 126. Culture is the Challenge
  • 127.
  • 128.
  • 129.
  • 130. 1. Recognition 2. Desirability Selected branding paradigm to highlight the The product technology, i.e., natural, project’s offering and values the group stand organic, cultural and spiritual aspects should for in the international marketplace. (see be reflected incorporated into the product. figure branding typologies). This branding Thus the products require specific new should show natural (fully natural products) knowledge, process and protocols to achieve Organic, Sustainable production, these ambitions. Community involvement, cultural and Patents, Registered Designs, Proprietary religious identity, and within an ethical Knowledge and branding business framework. Trademarks and certain Copyright Information 3. Form 4. Emotional Connection Product manifestations must reflect where The products should reflect the consumer and why the products exist through copy, ambitions for natural and organic products materials and form. with a cultural and spiritual base and Copyrights and Trademarks understand their direct contribution to the community. Brands and Trademarks
  • 132. K-Development Model Network University Training • Students R&D Funding Through Cluster Initial Grant • Farmers Prospectus • UNDP Umbrella Brand (Direct Marketing Company) •Prospectus • Zakat Entrepre- • VC neurship Application of University R&D Health Graduates Under University Beverages Supervision Nutraceuticals Herbs & Cosmetics • Drive Marketing Others • Product Development Govt. Organic Farming • Business Operations Support Integrated Farming
  • 133. Element Existence Values Most spiritual doctrines and religions have very positive values towards enterprise, independence and empowerment. These have to be brought to the surface of some cultures or sub-cultures, i.e., refocusing on the functional rather than the dysfunctional aspects. Confidence Confidence is a group phenomena and can be improved through engagement of group processes to achieve new ways of seeing. Ideas The skills of ideation can be developed through access to communications technology and developing both partial and whole brain thinking. Potential Opportunities By linking ideas to markets, modes of entry, resources and skill needs, potential opportunities can be constructed. Product Focus on themes rather than marketing mixes, look for ways to incorporate consumer fears, existence, acceptance, hopes and dreams in the product (spiritual materialism) Markets Markets exist in various forms and segmentations with much more fragmentation, coupled with the ability to communicate are potentially accessible to village communities. Identify aspirations of consumers, connect products and channels to these aspirations. Technology Technology is a way of how to make and do things. Product manufacture can be undertaken in scaled down models to suit decentralization, small unit output and flexibility. The focus is on how to do things in more cost effective ways, within the existing cultural socio-organisational setting.
  • 134. Competitive Advantage In many FMCG markets competitive advantage has more to do with theme, schema and branding, through selected channels of distribution, than economies of scale. The product is a fulfiller of dreams. Skills Not all the skills taught at formal educational institutions are needed to start an enterprise. In this regard its only necessary to provide people with what they need from the point of view of business, product development and production. There is a need for the “village university” to focus on showing people how to see, learn how to do and connect to consumers. Agency/Networks Through modern communications technology (internet & travel) it is now possible to contact and interact with very wide groups of people, including agencies of interest, customers, grant agencies and sourcing know-how. Logistics Logistics have advanced in recent years and can be coupled together such as the internet and EMS to create direct logistic systems between producers and consumers. Resources We have to learn to use what we have and utilize these limited resources innovatively. There are many methods of alternative funding that can be explored and set up, i.e., Zakat, unit trusts, closed equity markets, etc. Organisation New forms need to be generated from often discarded forms such as cooperatives. Cooperatives can exist at both production and market levels. People can form their own companies under umbrellas, organizations should be focused on linking the young with their older generation. Coalitions can be sort with larger organizations in developed countries for branding and market purposes. Organisations have to fit with existing social schema and develop from there, as people are ready.
  • 135. The company would act according to the following principals; 1. Commitment to Social Justice in Organic Agriculture 2. Transparency and Accountability 3. Direct and long-term trade relationships built on trust and mutual respect. 4. Equitable distribution of returns to stakeholders 5. Communication and information flow 6. Skills development and capacity building 7. Internal ethics, and 8. Professionals manning the PC, support the local community[i]. [i] Principals set out for peoples companies by Dr. Subash Mentha, Bangalore, India, as communicated to the author.
  • 136. Resources & Finance
  • 138. Zakat • One of the 5 pillars • Distributive justice (juristic & mandatory) • “zakat revenue can be spent under tamlik mechanism for providing an opportunity or raising productivity of the poor. Viewed from the long term perspective the poor would become in time self- reliant, hense reducing the national burden of spending money on social security schemes.” Khaliq Ahmad 2002 Intellectual Discourse Vol. 8, no. 2 (IIUM)
  • 139.
  • 140. A Roadmap from today Skills (how to make), place to make, Look for Resources finance Determine whether there is a market and how much competition there is. Screen the Idea for opportunity Determine if the product can be made. Decide on what product each group would want to be involved in and match this with an expert person and some Create Ideas students.
  • 141. The set of opportunities for an essential oil producer General Trading Other Aromatic Aromatic Chemical Agro-Tourism Agricultural (marketing) Essential Oil Extract (bio-route) By-Products Region’s production Specialised single oil marketing General multi-oil marketing Mulches Aromatic Chemical (physical route) Bio-fuel Commodity Oil Single Crop Portfolio of Crops Specialty Oil Flavour & Business through select supply chains Cattle feeds Fragrance Builds brand image and support. Aroma Chemical Complements other activities. Aromatherapy & Paper Cosmetic Production & marketing of Pharmaceutical Other diversification products Production of herbs and spices Agro-chemical Higher differentiation and value adding Diversification of activities Utilisation of wastes
  • 142. Opportunities are a product of our mind and these visions can become the design of our future with skilful and creative utilisation of scattered existing and forgotten resources to create great unimagined synergies. This is the true power of creativity that God has given humankind.
  • 143. Those who believe and work righteous deeds- from them shall We blot out all evil (that may be) in them, and We shall reward them according to the best of their deeds. Al ‘Anabut (29:7)