| 4. In which ways is the initiative creative and innovative?
FRIM STRATEGIC MANAGEMENT AND POLICY IN IMPLEMENTING RESEARCH, DEVELOPMENT AND COMMERCIALISATION ACTIVITIES
FRIM’s management recognized the importance of an efficient and strategic management of R&D projects and intellectual property policy as keys in achieving excellence in research and development and commercializing these R&D findings through technology transfer to all interested parties, including creating strategic cooperation with local and international agencies. Management strategies in eight different areas were formed under FRIM’S Strategic Plan (2003-2010; 2011-2020), with the implementing strategies for research, development and commercialization fall under Strategy 2 and 3.
Strategy 2 R&D Strategies
(selected areas)- Forest plantation for sustainable development of forest industries- Development and adoption of green technology in the timber industry- Development of high value-added downstream products
Strategy 3 Commercialization of R&D Outputs
- R&D findings for potential commercialization- Competitive technology intelligence (CTI) capability- Strategic business unit focusing on emerging industries and establish linkages to other
areas and activities- Licensing program as an integral part of the intellectual property rights (IPR) initiatives- Spin-off, start-up and joint venture Initiatives
Below are the key developments and steps, main activities conducted in implementing the strategies abovementioned:
- R&D SOURCING AND FUNDING AGENCY, IMPLEMENTATION OF R&D ACTIVITIES (2003-08)
The HTD® research team secured funding from Ministry of Plantation Industries and Commodities (2004-2010); Science Fund under Ministry of Science, Technology and Innovation (2006-2009); and Commercialization of R&D Fund (CRDF-1) under Malaysian Technology Development Corporation (MTDC) (2008).
Comprehensive R&D studies on development of HTD® were conducted starting from conceptualization of idea, proof of concept, development of prototype, feasibility study/ market validation, and product testing carried out by both local and international accredited testing bodies.
- MARKET FEASIBILITY STUDY (2008)
Export market competitiveness and potential
This Market Survey-cum-Feasibility Study on HTD® System for Accelerated Kiln Throughput of Rubberwood Dimension Stock was commissioned by Malaysian Technology Development Corporation (MTDC) [http://www.mtdc.com.my/crdf-approved-companies]
A report “Market Survey-cum-Feasibility Study on HTD® System for Accelerated Kiln Throughput of Rubberwood Dimension Stock” commissioned by Malaysian Technology Development Corporation (MTDC) in late 2008 under CRDF-1 scheme has confirmed that the technology is ready for full commercialization roll-out with the following list of proposed action plan for the technology,
Execute Commercialization in Commercial Scale with a private sector player to establish the working commercial plant.
Use the Showcase Plant to Promote to Others.
Conceal HTD® Protocol in the form of PLC built-in.
Consider Branding Programme for Malaysia’s HTD® Rubberwood.
- IDENTIFYING INDUSTRIAL PARTNER FOR COMMERCIALIZATION OF TECHNOLOGY (2008-09)
FRIM’s intellectual property (IP) policy includes the steps from creating IP towards the IP expansion. The system starts from the creation of an IP through the R&D by the researchers. FRIM integrates patent search (prior art search) in each and every level of R&D assessments. The policy outlines the important stages of monitoring and assessment starting from the project proposal preparation until the project is completed. This policy is to ensure the novelty of the research study and new invention or innovative ideas created from R&D activities. It also states the criteria(s) for making decision on the IP rights protection for selected innovations with potential for commercialization.
- STRATEGY FOR MARKET PENETRATION AND ACCEPTANCE (2010- )
FRIM has given an exclusive technology licensing rights to Advance Low Pressure System (ALPS) to commercialize the HTD® Technology to both the local and international markets. Some of the steps taken were by sending HTD® treated lumber directly to the international household suppliers such as IKEA (Thailand) to be tested according to their standard and specification. The feedback from IKEA has been very encouraging as they have specified HTD® lumber in their purchasing programme. The flooring panel made from HTD® treated lumber was also sent to Singapore and Korea for testing and the products were approved by the Singapore Housing Development Board and passed all tests carried out by the accredited Korea Conformity Laboratories (KCL).
ALPS’s international counterparts in Singapore and Korea have been actively promoting the HTD® products. They have also set up offices in the United States and China to promote and penetrate the potentially vast markets.
- BRANDING AND CERTIFICATION OF HTD® PROCESS FOR QUALITY ASSURANCE (2011- )
The system needs to adhere to a strict Code of Practice (COP), whereby the licensed operator of the HTD® technology will be audited based on the clauses stipulated in the COP. The COP is a prerequisite for quality assurance in ensuring high quality products. Furthermore, the COP also ensures that the products remain "green" throughout the manufacturing process.
- BUSINESS EXPANSION, JOB CREATION AND HUMAN CAPITAL DEVELOPMENT
To move forward the wood-based industry, FRIM and its industry partner has strategized and adopt pragmatic approaches in the implementation process of realizing the full potential of the HTD® technology.
Marketing Strategy of HTD®
Phase I: Technology Introduction (Year 1 & 2)
- First commercial plant established
Phase II: Business Expansion (Year 3 - 5)
- Two commercial plants in Peninsular Malaysia
- First commercial plant in Thailand
Phase III: Strategic Management (Year 5 - )
- Expansion through joint venture (JV)
- Re-engineering of HTD® through R&D with FRIM
- Expansion through internal generated fund
- Product branding through FRIM HTD®
- HTD® product certification for quality assurance
- HTD® certified supervisor trained by FRIM.
Steps to be taken:
- Continuous improvement on HTD® system design and manufacturing process
- Continuous R&D effort and human capital development to enhance product quality
- Increase production capacity, skilled work force via business expansion
- Increase HTD® market via continuous R&D on other timber species
- Commercialization effort of FRIM’s through product certification and training
| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The following stakeholders were involved:
Forest Research Institute Malaysia (FRIM)
- Involved in the conceptualization, R&D works, prototype development.
Advance Low Pressure System Sdn. Bhd. (ALPS)
- Contributed towards the up-scaling of the HTD® prototype to commercial plant
- Design of the HTD® system and auxiliary equipment
- Introduce the use of low cost biomass thermo oil boiler
Ministry of Plantation, Industry and Commodities (MPIC)
- R&D funding of HTD®project
Ministry of Science, Technology and Innovation (MOSTI)
- R&D funding of HTD® project
Malaysian Technology Development Corporation (MTDC)
- Funded the market feasibility evaluation study
Stake holder consulted:
- Malaysian Timber Industry Board (MTIB)
- Malaysian Timber Council (MTC)
- Malaysian Furniture Industry Council (MFIC)
- Malaysian Wood Industry Association (MWIA)
- Muar Furniture Association (MFA)
- The Bumiputra Furniture Association (PEKA)
- Rubber Industry Smallholder Development Authority (RISDA)
- Association of Malaysian Rubberwood Trade and Industries
HTD® Team Members:
• Dato’ Dr. Abd Latif Mohmoh
• Dr. Sik Huei Shing
• Choo Kheng Ten
• Dr. Woon Weng Chuen
• Ramzul Iklas Ab Lah
• Syed Othman Syed Omar
| 6. How was the strategy implemented and what resources were mobilized?
FINANCIAL COST OF PROJECT IMPLEMENTATION
Ministry of Plantation Industries and Commodities (RM1,260,000- USD 420,000);
Science fund under Ministry of Science, Technology and Innovation (RM270,000 – USD 90,000);
Commercialization of R&D Fund (CRDF-1) under Malaysian Technology Development Corporation (MTDC) (RM100,000- USD33,000)
The financial support totaled over USD 543,000. for conducting activities over the course of project implementation from conceptualization of idea, proof of concept, development of prototype, feasibility study/ market validation and up to the current stage of commercial uptake by the industry (investment by the industry partner for establishment of commercial HTD® plants).
Human and technical resources’ cost:
2 scientist x 48 man-month x USD 3000/month = USD 288,000
Grand total: USD 831,000
| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
i) HTD®- GREEN TECHNOLOGY
Reduced negative impact on the environment (Eco-friendly) and compliance to EU Directive
The method of this innovation eliminates the need to use chemical preservatives in the treatment of rubberwood, currently the major renewable plantation timber for manufacturing of high-class joinery and furniture for export markets in Malaysia. Rubberwood is sustainably produced from managed plantations and is a proven substitute for the depleting wood supply from natural forests. The method of this innovation also offers an alternative solution on countering the threat of the EU ban on borates, the main chemical preservative commonly used in rubberwood processing. Essentially, in the method of this innovation, high-heat exposure is used to fumigate the lumber against insect attacks.
Energy-efficient System (Time- and cost-saving)
The sustained high-temperature feature of the treatment method and kiln of this invention, provided by an energy-efficient system, enables a high-throughput of dried lumber e.g. 30 mm x 105 mm dimension stocks suitable for wood based furniture industry. The treatment time for 30 mm-thick sawn dimension stocks is reduced to about 2 days in comparison to a total period of 10 to 12 days required by conventional drying methods.
In addition, the HTD® plant uses biomass, i.e. wood waste produced from its integrated sawmilling activities, for heat generation, thus maintaining its cost of production despite using higher temperature in the HTD® process.
Environmental- and Consumer-friendly Product (Green Living)
Being a plantation timber, rubberwood is derived from sustainable resources. The non-borates treatment means employed in HTD®, are friendly to both the environment and consumer.
- Less warping in HTD® timber
- Better recovery compared to conventionally produced lumber
- Dimensionally more stable
- Enhanced grain feature
ii) QUALITY ASSURANCE THROUGH IMPLEMENTATION OF NEW ICT METHODS - PROGRAMMABLE LOGIC CONTROL (PLC) FOR HTD® PROCESS MONITORING
The HTD® system needs to adhere to FRIM’s Code of Practice (COP) for effective HTD®process. Monitoring and recording of the HTD® process, especially during the plasticization phase and accelerated drying-cum-high temperature treatment phase is crucial to achieve the desired outputs in terms of overall operational performance and maintaining the quality of processed material. Using programmable logic control (PLC) instrumentation, the HTD® protocol could be input for HTD® process control, monitoring and recording for each production batches. All HTD® records will be kept for annual audit check by auditors. FRIM’s COP also depicts the procedures for in-house quality check (QC) and phytosanitary measures in handling of both raw and processed materials for effective factory hygiene control.
iii) SUCCESSFUL COMMERCIALIZATION OF HTD® TECHNOLOGY
FRIM has entered into a Technology Licensing Agreement (TLA) with Advance Low Pressure System Sdn. Bhd. (ALPS) for commercializing HTD® technology in Malaysia and Thailand. Two units of HTD®systems were successfully set up in Telok Gong, Selangor in 2012. ALPS has started to relocate their plant to Senawang, Negeri Sembilan early this year as part of their expansion plan. A full HTD® commercial plant will be established by 2015.
iv) INTERNATIONAL MARKET ACCEPTANCE
- Singapore Housing Development Board: 2 star rating for green product label
- Korea Conformity Laboratories (KCL): passed all “wooden flooring product” standards.
Marketing brochures were also produced by ALPS's counterparts in Singapore (Forest Lumber PTE) and TPS of Korea to promote the environmentally-friendly HTD®processed flooring panel products in respective markets.
v) PATENT, NATIONAL AND INTERNATIONAL AWARDS & RECOGNITIONS
Patents were granted for HTD® technology from the United States in March and Malaysia in October 2013 (Patent No. US8397400B2 and MY149935), and most recently the patent was granted in Singapore (August 2014; Patent No. SG180413) Patents were also filed in five other countries of interest, namely Thailand, Indonesia, China, Vietnam and India.
The HTD® project was awarded the Public Service Award in 2005, by Malaysian Administrative Modernization and Management Planning Unit (MAMPU), Prime Minister's Department, for establishing the country’s first prototype HTD® system. In 2013, the HTD® research team won the prestigious National Innovation Award for successful commercialization of the Malaysia-, US- and Singapore-patented HTD® technology. In October 2014, the HTD® research team has won top prize of the National Intellectual Property Award, and was the finalist of the Commonwealth Public Administration and Management Award under the Innovations in Government Services and Programme. In addition, a member of the research team was awarded the outstanding doctoral research award by International Union of Forest Research Organization (IUFRO) at the XXV IUFRO Congress (5-11 October 2014) held in Salt lake City, Utah, United States of America.
The HTD® technology has generated a lot of media interest since 2013, gaining wide coverage from leading newspapers such as Utusan Malaysia, Berita Harian, The Star, Sin Chew Daily and etc; prime time news aired on TV3, TV8 and TV9; and television interview on RTM 1_ Biz Malaysia, feature interview on Astro Awani_Inno Mag, and most recently a radio interview on BFM 89.9. All in all, the Advertorial Value of the media coverage was nearly about RM3 million.
| 8. What were the most successful outputs and why was the initiative effective?
Monitoring and evaluation of the progress of the HTD® was conducted throughout the implementation of the project by several mechanisms,
i) FRIM’s internal evaluation panel managed by Research Management Division and Innovation & Commercialization Division.
FRIM’s Research Management Division screen and evaluate potential proposals before reverting them to the researchers for corrections or further improvements. The corrected proposals will be submitted to various funding agencies for technical evaluation and subsequently to the approval committee if recommended by the technical committee. Upon project approval, FRIM's Research Management Division will facilitate in liaising with the funding agency for disbursement of project fund, as well as monitoring of project activities until completion.
ii) Monitoring by respective funding agencies at ministry level.
Under the science-fund project funded by Ministry of Science, Innovation and Technology (MOSTI), a quarterly report on the physical and financial progress is required by the secretariat for monitoring of milestone activities. The project team is required to present the progress of the project during mid term and at the completion of project to a panel of experts appointed by MOSTI. A site inspection will also be conducted by the evaluation panels upon completion of the project.
iii) Project Steering Committee represented by timber board, timber council and wood- based associations.
Project Steering Committee (PSC) was set up to monitor the implementation of the project funded under Levy Fund by Ministry of Plantation Industries and Commodities. The PSC members were comprised of FRIM’s researchers, senior officers from Malaysian Timber Industry Board (MTIB), Malaysian Timber Council (MTC), Malaysian Furniture Industry Council (MFIC), and industry players who are members of the Malaysian Wood Industry Association (MWIA). PSC meetings were held quarterly to monitor the physical and financial progress of the project. A technical working group (TWG) was formed under the PSC to discuss on matters related specifically to the technical aspect of the project.
iv) Market feasibility evaluation carried out by an independent evaluator, commissioned by Malaysian Technology Development Corporation (MTDC).
This Market Survey-cum-Feasibility Study on HTD® System for Accelerated Kiln throughput of Rubberwood Dimension Stock was commissioned by MTDC under the Commercialization of Research and Development Fund (CRDF-1) for selected projects potential to be commercialized.
v) Technology licensing agreement (TLA) monitored by Project Management Committee (PMC), facilitated by Innovation and Commercialization Division.
The technology licensing agreement (TLA) for commercialization of HTD® technology was signed between FRIM, represented by Malaysian Forestry Research and Development Board (MFRDB) and advance Low Pressure System Sdn. Bhd. (ALPS). Project management committee (PMC) held bimonthly meeting to discuss all matters related to the commercialization activities, licensing fee and royalty payment as stipulated in the TLA.
vi) Monitoring of commercial production activities using programmable logic control (PLC) instrumentation
FRIM is responsible to conduct annual auditing to all HTD® plants operated by FRIM’s licensee, ALPS and other sub-licensees, to ensure that the operation of HTD® systems are adhered to HTD® Process Code of Practice (COP) at all time. For a simple and effective monitoring mechanism, all HTD® systems are equipped with a programmable logic control (PLC) instrumentation with input of HTD® protocol for efficient process control, monitoring and recording of each production batches. All HTD® records shall be kept for annual audit check by auditors.
| 9. What were the main obstacles encountered and how were they overcome?
OBSTACLE (1): SEARCHING FOR THE RIGHT COLLABORATOR WITH TECHNICAL SKILLS
The HTD® research team encountered an unsuccessful collaboration with our first commercial partner, Techwood Industries Sdn. Bhd., despite successfully obtaining the Commercialization of R&D Fund from the Malaysian Technology Development Corporation (MTDC) to establish the first commercial HTD® plant in Malaysia. The withdrawal of the approved funding was made based on TWI’s management decision for not being able to commit to additional investment for the establishment. Nonetheless, our second commercial partner, Advanced Low Pressure System (ALPS), is working closely with TWI on the HTD® products development and marketing in overseas.
STRATEGY & REMEDY ACTION (1):
Working with the right commercial partner
Successful commercialization of the HTD® technology is attributed to engaging a right industry partner with sound technical background to upscale and reengineer FRIM’s base technology into a commercial production unit. FRIM has licensed the rights to Advanced Low Pressure System (ALPS), a local wood-based company, to commercialize the HTD® Technology in Malaysia and Thailand. Besides, ALPS also has a few expansion projects in the pipeline, to establish HTD® plants in Sabah, East Malaysia and other ASEAN countries besides Thailand.
OBSTACLE (2): INITIAL POOR MARKET ACCEPTANCE
Generally, local wood-based industries are adopting ‘wait-and-see’ approach. In spite of that, the HTD® research team has been receiving some serious enquiries from abroad from as far as Liberia, Bangladesh and India, and also other ASEAN countries such as Thailand and Indonesia, both are world leading rubber producer countries, and Vietnam.
STRATEGY & REMEDY ACTION (2):
i) Going to the market leader - IKEA(Thailand)
FRIM has given an exclusive technology licensing rights to Advanced Low Pressure System (ALPS) to commercialize the HTD® Technology to both the local and international markets. Some of the steps taken were by sending HTD®treated lumber directly to the international household suppliers such as IKEA (Thailand) to be tested according to their standard and specification. The feedback from IKEA has been very encouraging as they have specified HTD® lumber in their purchasing programme.
ii) Send samples for evaluation by international accredited body
Flooring panel made from HTD® treated lumber was sent to Singapore and Korea for testing. The panel products were approved by the Singapore Housing Development Board (2 star rating for green product label) and passed all tests carried out by the accredited Korea Conformity Laboratories (KCL). Marketing brochures were also produced by ALPS's counterparts in Singapore and Korea to promote the environmentally-friendly HTD®processed flooring panel products in respective markets.
iii) HTD® Technology Transfer Forum and Launching of HTD® Trademark
FRIM has successfully organized a special forum in January 2013 to introduce its award-winning High Temperature Drying (HTD®) system for wood treatment to local wood suppliers, wood-based product manufacturers, kiln drying operators and interested parties. The forum was attended by about 150 participants from wood-based industries in the country and also attended by international participants from Thailand, Taiwan, Singapore and Japan. Deputy Minister of Natural Resources and Environment (NRE), Dato’ Sri Dr James Dawos Mamit, officiated the opening of the forum and launching of the FRIM HTD® Trademark. HTD® trademark represent the brand for quality and environmentally-friendly high temperature treated timber. The trademark was filed in Malaysia and Thailand, and will be followed by filing in China, Singapore, South Korea, Indonesia and etc.
iv) Dialogue with the relevant associations to discuss and disseminate HTD® technology
The HTD® research team held discussions with members of wood-based associations such as Malaysian Wood Industry Association (MWIA) and Muar Furniture Association (MFA) to introduce the HTD® technology to the industry players. The team also gathered feedbacks from the industry on ways to collaborate and adopt this technology with respect to their current practice and market demand. Some have expressed their interest to visit the HTD®plant and looking forward to enhance their current operation with the improved features offered by the HTD® technology.
v) Promotional activities through international trade fair
Malaysian International Furniture Fair(MIFF 2014), 4-8 March, Putra World Trade Center (PWTC), Kuala Lumpur, Malaysia
Vietnam International Furniture and Home accessories Fair (VIFA 2014), 11-14 Mac, Ho Chi Minh City, Vietnam.