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I. Abstract

The aquacultural biotechnology industry is one of Taiwan’s newly flourishing industries during in recent years. Its market share, numbers of researchers and products all have sound fundamentals as well as high potentials for future development. Today, aquacultural biotech products are coming out all around the world and have reached a key point in its take off. With Taiwan’s existing climate conditions and outstanding farming techniques, the aquacultural farming biotech industry is aggressively developing warm water farming biotech products for fish and shrimp usage to help enhance global competitiveness. In the future, first priority should be given for appropriating funds to this industry so that innovative biotech products can be developed along with the collaboration and integration between academia, research and testing units, and the farming industry. In addition, the industrialization of research results and the creation of a globally competitive biotech industry should be accelerated.

II. Industry definition and scope

Industries that utilize biotechnology techniques such as genetic engineering, transgenic, cell culture, fermentation, protein purification, etc. for research and developing related products needed by the aquacultural farming industry such as medicine, vaccines, new formulas for animal feed, feed additives, disease examination reagent, immune stimulating agents, water quality processing biological additives, improve farming seeds, and high quality healthy seeds needed by the ornamental (aquarium) fish industry.

III. Industry overview

The aquacultural biotechnology industry is one of Taiwan’s newly flourishing biotechnology industries. Due to the late development of aquacultural biotechnology and industry development in Taiwan, aquacultural biotech companies didn’t begin to set up operations in Taiwan until recently. In addition, some of the medical and agricultural biotech companies have invested and set up their own aquacultural farming departments, pioneering the field of aquaculture biotechnology from different angles.

Domestic aquacultural biotech companies of respectable scale include Fu Li Yong Biotech Inc, BioChina, Inc., Dr. Fish Biotech Inc., Taikong Corporation, Mithra Bioindustry Co., Ltd. and Magellan Biotechnology Co., Ltd. Biotechnology Co. Main business items include aquaculture vaccines, oyster triploid breed, non-specific virus aetiology shrimp seeds, immunity increasing strengthened animal feed, special antibodies formula animal feed additives, high density ecology circulating farming system, water quality processing biological additives, aquatic animals bacteria, and virus infection disease examination reagent, transgenic ornamental (aquarium) fish.

Strictly speaking, an industry must have a market with a certain scale of economy. In addition, an industry must maintain a certain number of operation personnel, researchers, production workers and products. From this definition, the current state of Taiwan’s aquacultural biotech industry is still in its infancy stage.

With the growing worldwide demand for aquacultural biotech products and warm water fish farming technology still in the development stage, if Taiwan can fully utilize its foundation and compete for time, it can develop into an international R&D center for warm water fish biotech products.

IV. Market Analysis

(1) Global market

In terms of medicine for use in aquaculture, Norway, which was the world’s earliest nation to carry out large-scale industrialization farming, is the leader in the development of aquacultural vaccines. Since its main farming type of fish is cold-water fish such as salmon and trout, its aquaculture vaccines is also developed for cold water farming fish. Currently, Alpharma and Intervet are the world’s main R&D companies of aquaculture vaccines.

(2) Domestic market

According to a market survey conducted by Animal Pharm in 1998, the biological additives market for aquacultural farming is worth up to US$48 million, antibiotics US$220 million, disinfectants US$178 million, anti parasite medicine US$20 million, and the animal feed additives market US$330 million.

Currently, vaccine for aquaculture is applicable to only vaccine products for cold-water fish. These manufacturers are small in size and number with little worldwide competition. According to Animal Pharm's 1998 market survey, the market for vaccine for aquaculture has grown from US$1 million in 1986 to US$12 million in 1988 and US$15 million in 1994. Since 1996, it has been widely used for disease prevention on salmon and trout. The market has increased from US$33 million in 1996 up to US$48 million in 1998 (approximately NT$1.2 billion). In recent years vaccine for aquaculture has grown 20%, making it the animal medicine industry with the highest global potential. The major market for vaccine products made by foreign companies is fish farms located in cold-water regions. Not much has been done for farming markets in warm waters. In view of Taiwan's rich experience in warm water fish farming as well as plenty of animal medicine researchers, some of Taiwan's manufacturers have exploited new business opportunities by utilizing this competitive niche. These manufacturers have already begun R&D on the development of vaccines for warm water farming fish of high economic value such as rockfish, cobia and shrimp. As Taiwan is located in both tropical and sub-tropical areas, it can utilize its existing climate conditions and superior farming techniques to aggressively develop vaccines and related biotech products for water farming fish and shrimp. This can create a different market segment from the products made by foreign manufacturers for cold-water fish. In addition, warm water fish farming is highly efficient and has various types of outstanding fish, which gives Taiwan very good opportunities to enter the worldwide biotech industry and compete for a share of the worldwide aquacultural biotech product market.

With the growth of the economy and improved standard of living, the demand toward leisure by the people in Taiwan is constantly changing. Aside from Taiwan's world leading expertise in farming for food fish, its expertise in farming ornamental (aquarium) fish is also quite exceptional. Recently, a domestic aquarium collaborated with academic research institutions to develop a special glow-in-the-dark ornamental (aquarium) fish by applying genetic transformation techniques. Meanwhile, the other nations are still in the initial research stage. In the future, Taiwan can greatly increase its share of the worldwide ornamental (aquarium) fish market.

V. Technical Analysis

(1). Today's techniques

The development of most aquacultural biotech products depends on the following key techniques: screening and mass cultivation of microorganisms, microorganism processing of farming waste water and bottom mud, genetic engineering transgenic and gene recombination, chromosome manipulation, mass production of aquacultural bioactive material and vaccines. After years of hard work within Taiwan's related academic, testing and research institutions, a lot of research experience and results have already been accumulated. Of this, genetic engineering has become one of the hottest topics of research worldwide. It has a wide range of applications and advancement is swift and innovative. By utilizing genetic manipulation technique, new strains can be cultivated which traditional breeding techniques could not cultivate. In recent years, the focus of Taiwan's marine life genetic engineering is on the R&D of vaccines and testing reagent, innovation of animal feed nutrition, as well as the development of new types of ornamental (aquarium) fish that of special color presentation, and resistant to illness and cold. This R&D has gradually reached the stage of critical mass. The current stage should accelerate the forming of a technological platform in this field, enforce the communication and integration between the mid and lower stream R&D system, implement R&D results within the industry, and amend related regulations regarding the safety assessment of aquacultural animal/plant aquacultural in order to enhance the industry's competitiveness.

(2) Analysis of domestic human resource

Today, the number of people and the academic research institutions involved in the field of aquacultural biotechnology include 30 researchers at Academia Sinica, 30 persons at the Fisheries Research Institute Of Council Of Agriculture, Executive Yuan, 50 persons at National Taiwan University, 40 persons at the National Taiwan Ocean University, 40 persons at the National Cheng Kung University, 30 persons at other academic institutions and about 100 persons in R&D departments at across the industry, totaling roughly 300 persons and is the driving force behind the world's research on aquacultural farming.

VI. Composite Analysis

(1). Niche for developing the aquacultural farming biotech industry

Taiwan's aquacultural farming techniques lead the world, being able to complete farm over 70 different types of fish. Besides being able to supply the domestic market, a portion of its high economic types of fish are exported around the world, creating tremendous amount of foreign currency. Therefore, the research talent accumulated, experience and industry foundation are the niches and development potential of Taiwan's aquacultural farming biotech industry. With the rapid development worldwide in the warm water fish farming industry today, introducing new technology into the industry has become a necessary trend and will help stimulate business opportunities for the aquacultural farming biotech industry. Due to the close farming density, conventional aquacultural farming creates large changes in the farming environment. This leads to problems such as the spreading of disease and production shrinkage, which obstructs the development of the farming industry. However, through the use of biotech techniques, all the problems faced by the farming industry can be effectively resolved. Applying biotech techniques to develop related products and information needed during the farming process could help reduce losses from disease and increase production volume as well, thereby enhancing the operation performance of aquacultural farming. Therefore, the aquacultural biotech industry is a niche industry that the worldwide conventional farming industry needs very much.

The aquacultural biotech related products in the market today are mostly for cold water farming animals. As Taiwan is located in both tropical and sub-tropical climates, it already has very good techniques in warm water farming. Therefore, the research and development of aquacultural biotech products for warm water farming should currently be Taiwan's main direction and niche advantage in the development of the aquacultural biotech industry. Not only can this create a different market segment from cold-water use products, but also controls the global market for warm water aquacultural biotech products. In addition, in recent years, several Southeast Asian nations (Vietnam, Thailand, Indonesia, etc.) have all heavily invested in the aquacultural farming industry. In the future, they will have increased needs for aquacultural biotech products. Therefore, Taiwan should immediately invest in the research and development of aquacultural biotechnology to avoid other countries taking the lead.

The supply of high quality aquacultural seedling is the first and utmost condition in the development of the aquacultural farming industry. Taiwan's aquacultural seedling breeding techniques leads the world; however, the farming environment is complex and difficult to control. Therefore, transgenic and conventional breeding techniques can be used to select, screen, and grow various types of fish and shrimp as well as develop fish and shrimp seeds that are disease and cold resistant, fast growing, and healthy. At the same time, it can enforce the collection and preservation of aquacultural germplasm in addition to applying biology information in the genetic breeding of new seeds. These measures can help Taiwan become the main supplier of aquacultural seedling in the Asia Pacific region.

(2). Industry development bottlenecks

Aquacultural biotechnology is a new and upcoming biotechnology industry. Related corporations are still unfamiliar with the industry's competitive niche advantages and future development potential, thereby lacking the courage to invest in R&D or production in this industry. In addition, there is also a lack of talent with industry research and management experience. Another reason is because the field of research is too broad and dispersed, making it difficult to effectively integrate and industrialize the research results. Moreover, there are no related rules and regulations in place for obtaining patents or protecting research results. Effective market planning and development also cannot be carried because of insufficient market information.

(3). Competitive analysis of the aquacultural farming industry:

1. Strength

    (a) Taiwan's aquacultural breeding techniques leads the world, the experience and industry foundation are the niches to the country's global competition.

    (b) Aquacultural related research institutions have cultivated many outstanding aquacultural biotech talents who have lots of research experience and findings.

    (c) There is a large amount of capital in Taiwan that the government can utilize to stimulate rapid development of the animal biotech industry.

2. Weakness

    (a) The aquacultural biotech research field is too broad and divers, unable to integrate niche and potential areas, related research results still haven't merged with the industry or become industrialized.

    (b) The industry still does not recognize the development potential of aquacultural biotechnology techniques, thus lack the drive to invest.

    (c) There is a great lack of information within the aquacultural biotech industry, unable to effectively plan.

3. Opportunity

    (a) Aquacultural biotech products have high added value, long product life and value chain.

    (b) The biotech industry has been slated as an important new upcoming strategic industry for development and promotion.

    (c) The farming industry is rapidly developing in tropical and sub-tropical countries; can develop warm water fish farming related biotech products.

4. Threat

    (a) Governments of neighboring countries (Korea, Japan and Singapore) are aggressively promoting their biotech industries; Taiwan's investment environment advantage will gradually disappear.

    (b) Higher production costs in Taiwan leading to low competitiveness.

    (c) Good investment environment created by China, key techniques and industry information quickly being lost.

VII. Current State of Industry Policy

The biotech industry has always been considered as tomorrow's star industry. In the newly published ''National Development Plan,'' the biotech industry has been listed as one of the major industries for development. During the ''2002 Executive Yuan Industry Technology Strategy Conference'' held this month (July 2002), relating to the issue of ''Taiwan's agricultural biotech industry's competitiveness and development strategy,'' the decision to ''promote sub-tropical area flowers and the aquacultural farming biotech industry'' was passed. Aquacultural biotechnology belongs to the high tech industry. It relies on continuous R&D and volume production techniques to maintain the industry's competitiveness. However, Taiwan can fully breed many types of fish while the topics of research are too broad and diverse. In addition, there are no communication channels between academic, testing and research institutions, which makes it difficult to integrate research results. After Taiwan's entrance into the World Trade Organization (WTO), the government's policy direction toward the farming industry is to facilitate industries that have global competitiveness, e.g. net-cage fish-farming, aquacultural seedling, and the ornamental (aquarium) fish industry, etc. Therefore, the research direction of aquacultural biotech techniques should be consistent with the policies for the farming industry, i.e. it should select farm animals with high economic value and global competitiveness, join industry, government, academic, and research forces, focus research objectives, effectively enhance the industry's global competitive advantage, accelerate transformation of the traditional farming industry, as well as reduce the impact toward the industry after entering the WTO.

In terms of fish, select types that have a competitive advantage in both domestic and foreign markets, such as rockfish and cobia. Conduct R&D to produce vaccines and testing reagent for main diseases to solve the problem of owner's lost investments due to sickness and low survival rates. In addition, transgenic and breeding techniques can be utilized on popular farming fish types such as milkfish and tilapia to come out with new breeds that grow quickly or are resistant to cold and sickness. This can help reduce the losses caused by cold weather and increase production. As for ornamental (aquarium) fish, genetic manipulation technique can be applied to develop breeds with special colors, which can make aquariums become even more colorful and help increase global market share.

In terms of shrimp, since disease problems erupted more than ten years ago, grass shrimp production has remained low up till today. As the immune system of shrimps is different from fish's, vaccines are unable to provide protection. Only by using microorganism cultivation techniques to develop immuno-enhancer (immunopotentiator), then adding it into the animal feed, can shrimp's immunity be effectively enhanced. PCR examination techniques and traditional breeding techniques can also be used to select penaeus monodon, shrimp fry and the nutrition and feedstuffs living organisms as aquatic animal feed. In addition, volume production techniques for non-specific disease and healthy shrimp seeds specified pathogen free (SPF) health shrimp fry along with the R&D and application of disease testing agents should be developed to revitalize Taiwan's shrimp farming industry. Related research on shrimp mentioned above have all been listed in the Executive Yuan National Science Council's ''Planning and Implementation of the National Science and Technology Program for Agricultural Biotechnology'' as one of important tasks in the area of aquacultural farming.

Currently, Taiwan's aquacultural biotech industry is still in its initial development stage. R&D and production scale still need to be enriched. Building up the industry's technical abilities relies heavily on the research and technology transfer by the government. In order to strengthen the communication between academic, testing and research institutions, more funding should be appropriated for technological R&D as well as carrying out collaboration projects between the industry and government, academic, and research institutions. Moreover, a technical platform should be created, which is imperative to the industry's development, to fully implement the transfer of technology to the industry sector. At the same time, incentive and consultation services should be taken, including providing preferential rate loans and knowledge property protection. These measures will help form an integrated R&D and production system and stimulate the aquacultural biotech industry as well as the rapid growth of its production volume.

Regarding the development bottlenecks mentioned above, going forward, there needs to be related rules and regulations (fish industry law or related transgenic aquacultural animal and plant control guidelines) in place to act as the legal source for establishing aquacultural biotech products patent application and protection laws. More funds should be appropriated while collaboration research projects between the industry, government, academic, and research institutions should be expanded. In addition, promote international cooperation and bring in technical know how from other countries. At the same time, enforce the collection of information from the domestic and foreign markets and conduct training for management talent. Last of all, build a marketing and sales information service system and clearly plan the industry's mid to long term development objectives.

 
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