Taiwan keen to back NZ expertise

By LIAM DANN primary industries editor

It could be a marriage made in heaven.

New Zealand has no shortage of good science but if it is to develop a lucrative biotechnology industry it will need outside investment.

Taiwan, which aims to be a world leader in biotechnology by the end of the decade, has no shortage of capital and is enthusiastic about New Zealand's expertise.

Charles Finny, director of New Zealand's Commerce and Industry office in Taipei sums things up simply.

"We can do things that Taiwan can't," he says.

"Taiwan has a surplus of money, we don't have enough."

There is an inherent compatibility between the two fledgling sectors, he says, although New Zealand's biotechnology sector is considerably less developed.

As far back as 1982 the Taiwanese Government identified biotechnology as one of eight key technologies it wanted to develop.

The New Zealand Government came to the same conclusion in 2002 and commissioned a biotechnology strategy report last year.

Total export earnings from New Zealand biotechnology companies were estimated to be about $250 million last year.

In Taiwan the sector already generates revenue of about $5 billion and they don't think that is nearly good enough.

Their Ministry of Economic Affairs has a development plan calling for revenue to reach $11 billion by 2006. The number of biotech companies is expected to more than treble by 2008 - from 165 to 500.

So far New Zealand has a core group of about 40 biotechnology companies.

Chen Chi-Hsiang, director of Taiwan's Department of Biotechnology and Pharmaceutical Affairs, is responsible for ensuring his country reaches its targets.

He is enthusiastic about the role New Zealand could play in getting there.

He accepts the target could not be reached without international collaboration.

By 2006 the total invested in Taiwanese biotechnology projects is expected to exceed $7 billion.

Amid this culture of investment are opportunities for New Zealand companies to form partnerships and sell intellectual property or services.

Local companies such as Vialactia and Virionyx have already begun to pitch themselves in Taiwan.

Both companies were well received at the New Zealand Taiwan Business Council conference in Taipei last October.

Their efforts to attract Taiwanese interest are now being supported by the New Zealand Government. Trade and Enterprise New Zealand has been allocated funding to identify opportunities and key areas of synergy for New Zealand companies.

"The Taiwanese are very good at venture capital," Finny says.

"They have a much longer history of venture capital than we do and they are very skilled at putting together international investment partnerships."

New Zealand companies often lack those skills and so it makes a lot of sense to partner, he says.

Then there are the fantastic links between Taiwan and mainland China, he says.

"The mainland is now Taiwan's biggest market and Taiwan is the biggest investor in the mainland."

Finny believes New Zealand's relationship can be about more than just capital.

"I think a lot of Taiwanese biotech companies are looking at New Zealand as a place where they can test and do work to refine their products and ideas," he says. Taiwan's biotechnology industries break down into four major groups: biomedical technology and equipment, genomic projects, development of Chinese herbal medicine and agricultural science.

Taiwan is particularly interested in international partners to develop agricultural biotechnology, Chen says.

In that field, New Zealand's reputation as a resource-rich country is already well-established with Taiwanese.

Our reputation is predictably as a "clean, green" nation with plenty of untapped potential in lucrative industries such as aquaculture.

But making Taiwanese business aware of our scientific expertise and world-leading biotechnology needs to be handled carefully, Finny says.

Because our industry is still so small we have to limit the amount of promotional work we do to avoid disappointing investors.

He also said a number of New Zealand biotech companies were perceived as too new or too small.

Despite those hurdles, Finny still believes Taiwan offers New Zealand biotechs their best bet for finding international capital.

Thanks to Fonterra's operations, there are more New Zealand dollars invested in Taiwan than there are Taiwanese dollars in New Zealand.

When you look at the relative size of the economies that equation is clearly the wrong way around, he says.

"Both sides agree we need more Taiwanese investment in New Zealand."

The ball is now in the court of the New Zealand companies.

"We need ideas that people can understand," Finny says. "We find it very easy to sell the idea that we are ideal partners for Taiwanese companies but the next question we get is: show me the specific proposals."

* Liam Dann travelled to Taiwan as a guest of the Taiwanese Government.