Understanding Malaysia's Huge Potential in the Herbal Industry

Malaysia is easily a key player in Southeast Asia’s herbal industry due to its natural ecosystem. As the backbone of the country’s herbal industry, our 130 million-year-old rainforest hosts a broad spectrum of plant species, of which healing herbs such as Tongkat Ali grow in abundance.

According to ‘Herbal Industry Potential: Issues and Challenges To Be a Market Player,’ a report published by the Institute of Bioproduct Development department at Universiti Teknologi Malaysia (UTM), these plants make up 12% of the world’s entire plant system. Out of the 15,000 known species, approximately 2,000 are medicinally useful.

We therefore have a rich bounty of herbs and spices in our possession. These natural products are enormous resources as they appear as staples of daily diets, in herbal remedies, in beauty elixirs, and even incorporated in religious rituals.

In economic terms, how much is our herbal market worth?

The Malaysian herbal industry’s economic value

Due to consistent demands for natural ingredients, both locally and internationally, the Malaysian government has acknowledged the herbal industry as one of the country’s most promising sectors in the future. The market shines as a potential sector under the New Key Economic Areas (NKEA) outlined in the Tenth Malaysian Plan (2011 – 2015)

How does the herbal industry impact Malaysia’s overall economy today? Well, in 2013 alone, the industry was worth approximately RM17 billion. In 2019, the Ministry of Entrepreneur Development initially revealed an expectation of a RM 32 billion target hit, with an annual growth rate of about 8% to 15%. But with the coronavirus pandemic inevitably hampering the global supply chain of spices and herbs, any dip in the projected numbers is to be expected. 

That said, the industry is poised for continuous growth, nonetheless. As the Malaysian Investment Development Authority projects, the value of the industry’s GDP contribution will likely reach anywhere between RM19 billion to RM 28 billion by the year 2027.

With these facts in mind, let’s look deeper into why this industry thrives.

What are the industry’s significant drivers?

According to the report by University Teknologi Malaysia (UTM) mentioned above, several vital factors add to the growth of the herbal industry in Malaysia. Based on the insights reported by the Malaysian Herbal Outlook (2004) and Burrill & Co. (2007), these factors are:

1. Growing health concerns

Many health and wellness markets are looking for new ingredients to include in their products and services. Their search is a response to an increasingly health-conscious mindset of modern consumers today. Understandably, these factors result in the rising need for quality herbal ingredients.

2. Side effects of pharmaceutical drugs

People’s growing desire for holistic health maintenance is, in part, due to their increasing awareness of the side effects that pharmaceutical drugs could pose. The latter follows the fact that public health information and effective healthcare treatments are now readily available thanks to the Internet.

The situation does not mean that medical drugs in general do not work or do not help relieve ailments and their systems. After all, they often do when administered right. But medical insights coupled with holistic self-maintenance using scientifically-proven herbal remedies can help people prevent or reduce their risk of developing diseases.

3. Higher confidence in herbal remedies

With scientific progress and technological advancements playing into our advantage, it is now easier to verify the authenticity and purity of the natural performing ingredients used in herbal remedies. The transparency that comes with scientific validation provides herbs extractors in Malaysia with the opportunity to gain credibility and ultimately earn consumers’ trust. 

4. Competitive pricing

Herbal extracts and powders are relatively cheaper for consumers to acquire, compared to synthetic or lab-produced drugs and formulations. This very factor presents as a much-needed alternative solution for people who cannot afford to purchase the latter as their remedies.

5. Growth of the middle-income segment

The growth of the middle-class segment of the Malaysia population brings with it more ageing citizens. This demography understandably has various needs for health solutions that can deliver anti-ageing results, weight control, joint and bone health, and improved cognition. This is where our local medicinal plants come into play: they provide many health benefits that can address these issues holistically.

Now that we understand the economic significance of the Malaysian herbal industry, let’s explore the main performance ingredients that contribute to its expansion.

Malaysia’s most exported herbal ingredients 

According to insights gathered by our in-house researchers, some of the most globally demanded Malaysian medicinal herbs include:

1. Tongkat Ali

Extracted from the roots of the Eurycoma longifolia or longjack plant, Tongkat Ali is a common herbal remedy for male infertility and low testosterone levels. It also helps with muscle production, nail growth, energy levels as well as mental health and focus in both genders.

2. Bird’s nest

The bird’s nest (swiftlet spittle) is a popular superfood encompassing various health benefits. It is helpful in clearing excessive phlegm. It is also a significant skinfood; as it is rich in epidermal growth factor (EGF), it helps enhance tissue repair, which contributes to the skin’s youthful appearance. Additionally, it also aids digestion and reduces intestinal immune injury, thanks to its ability to activate and proliferate B lymphocyte white blood cells.

The bird’s nest market is incredibly vast, with an estimated value of RM1.5 billion in 2020. The projection is definitely a huge leap from its previous value of RM 1.1 billion in 2019.

3. Pegaga

Pegaga or ulam pegaga is also scientifically known as Centella Asiatica. This plant provides great nourishment for the skin, by healing wounds and treating autoimmune conditions such as leprosy, eczema and psoriasis. It is also known to help with diarrhoea, fever, amenorrhea (absence of menstruation), female urogenital tract conditions, and even mood.

3. Kacip Fatimah

Kacip Fatimah, which is scientifically known as labisia pumila, helps maintain a healthy female reproductive system via the optimisation of sexual functions such as vaginal lubrication. The plant is packed with phytoestrogen and isoflavones, which ease menopausal symptoms. It is also used in the treatment of dysentery, rheumatism, and gonnorhoea.

4. Mengkudu 

Known internationally as noni fruit or morinda citrifolia, mengkudu is native to Southeast Asia. In Malaysia, mengkudu leaves are an integral part of Malaysian women’s traditional post-partum care. Consuming the plant’s fruit in juice form can also help optimise women’s joint and bone health, increase their energy levels, and increase their immunity activites.

5. Roselle

Roselle, or hibiscus sabdariffa, originates from the Malvaceae plant family. Packed with nutrients such as vitamins B2 and C, calcium, iron, magnesium, and phosphorus, it helps improve one’s health and wellbeing immensely. Consuming this plant aids digestion and weight loss, strengthen the gums and teeth, protect the liver, and even improve depression, among other benefits.

Biotropics’ role in the herbal industry

Biotropics Malaysia has made a name for itself as the country’s leading nutraceutical in the production and promotion of quality patented performance ingredients, including Tongkat Ali.

Physta®, our signature performance ingredient that comes from the roots of the longjack plant, presents as the most potent source of Tongkat Ali extract in all of Malaysia. We also specialise in the productions of ACNAED® (activated virgin coconut oil) and BIOKESUM™ (kesum leaf extract).

In our commitment to back tradition with scientific validation, we ensure that all of our natural extracts go through stringent lab tests. None of our products leaves our factories without the verification of our scientists and our assigned United States Food and Drugs Administration (USFDA) officer.

Biotropics is a key player in the Malaysian herbal industry. Khazanah, the sovereign wealth fund of the Government of Malaysia, recognises the significance of our role, which is why they entrust to us the responsibility to grow and gate-keep the country’s nutraceutical industry.

Our status as a well-known turnkey manufacturer grows on the existence of our in-house research and development (R&D) team. We are committed to only the best extraction and research processes, in our quest to produce and distribute the finest performance ingredients.

Do your part in expanding the herbal industry

It is never too late to contribute to the global growth of Malaysian herbal market. Have the perfect nutraceutical vision, but unsure where to start? Our team of experts are ready to help.

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Biotropics Malaysia Berhad (Biotropics) was incorporated in February 2007 to develop and commercialise Malaysia’s bio-resources into superior natural health product. View more


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