Urea-molasses mineral block: it’s time to
make a decision
Rozhan Abu Dardak and Farzana Quoquab
Rozhan Abu Dardak is a
Director based at
Economic and
Technology Management
Research Centre,
Malaysian Agricultural
Research and
Development Institute.
Farzana Quoquab is a
Senior Lecturer based at
International Business
School, Universiti
Teknologi Malaysia,
Malaysia.
The authors would like to
thank Dr Wan Zahari, Chief
Technology Generator of the
Strategic Research Centre,
MARDI for his considerable
time and attention in providing
detailed first-hand information
for this teaching case.
Disclaimer. This case is written
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial
decision making. The author/s
may have disguised names,
financial and other
recognizable information to
protect confidentiality.
DOI 10.1108/EEMCS-07-2014-0189
Introduction
The committee of technology management of the Malaysian Agricultural Research and
Development Institute (MARDI) was disappointed with the outcome of the
commercialization of the urea-mollasses mineral block (UMMB or Nutriblock technology. It
was during the 2009 annual meeting when Dr Wan Zahari, a Senior Principle Research
Officer at MARDI, was reporting the present situation of the ruminant production in Malaysia
in front of Dr Azizan, the newly appointed head of the Business Development Unit (BDU).
The technology was one of the best inventions developed by MARDI and had received
many awards for its novelty and recognized for its potential to solve the critical problems
faced by livestock animal feed industry in Malaysia. Dr Azizan listened to Dr Wan’s
arguments about the reasons this technology commercialization failed in the market, and
what could be done to ensure its success in the future.
The Nutriblock was a food supplement for ruminants such as cattle and sheep that was
developed using local agricultural and agro-based by-products. The development of
Nutriblock by a local scientist and using local raw materials could reduce the cost of
production of cattle and sheep in Malaysia. Nutriblock was very important for the livestock
industry, especially for ruminants such as cattle, sheep and goats, and essential for these
animals to grow faster and remain healthy. Most Nutriblocks available in Malaysia were
imported, and their price was increasing every year. Furthermore, the quality of the
imported food supplements was very low and not suitable for local temperatures. As a
result, many ruminants were unhealthy and grew slowly.
Dr Azizan appealed to the committee of technology management of MARDI to give him a
second chance to commercialize the technology by licensing its IPR to a new company. He
believed that this mode of technology transfer would protect the technology’s IPR from
being copied by industry players and, especially, from foreign countries. The licensing of
technology would also benefit MARDI in terms of royalties that would be paid by the
licensor or technology recipient. In other words, this technology would generate more
income for MARDI and, at the same time, could enhance the livestock industry.
On the other hand, Dr Wan wanted to transfer this technology as a public good to help local
farmers. Haji Jamaludin, the Director of the Centre for Promotion and Technology Transfer,
supported his idea, and both felt that this technology transfer mode would allow any
industry players to use the technology freely, and no royalties would be paid to the
technology generator. Dr Wan believed that when many players were competing in the
market, the price of food supplement would go down and this would benefit the farmers.
The committee for technology management needed to make a decision quickly as a final
decision was to be presented to the Board of Directors on January 15, 2010, just one month
VOL. 5 NO. 2 2015, pp. 1-15, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 away. The committee rushed to decide the mode of technology transfer and to provide
justifications why they agreed with the approach, especially the impacts of the technology
on the livestock industry as well as to the economic development of Malaysia.

Livestock industry in Malaysia

The livestock industry was considered crucial in Malaysia, as it was the source of the
protein supply for the nation. The demand for beef and mutton in Malaysia was increasing
while the production of such cattle was less than 30 per cent of these commodities every
year. Generally, the livestock industry in Malaysia consisted of two categories of animal –
ruminants (cattle and sheep) and non-ruminant (such as chicken, ducks and broilers). The
livestock industry in Malaysia was relatively small, and a lack of land and high cost of
production were two major challenges faced by this industry. Every year Malaysia used to
produce around 45,000 metric tons of beef, 2,300 metric tons of mutton and 1.295 million
metric tons of poultry meat. The low production of beef and mutton has led Malaysia to
import more than 70 and 80 per cent of its beef and mutton, respectively, from countries,
including India and Australia. Malaysia aimed to increase the production of beef, mutton
and milk and, eventually, reduced the importation of these commodities. The production
and targets for the development of the livestock industry in Malaysia are shown in Table I.
One of the biggest challenges faced by the industry was to produce animal feed and the
competition for land use, especially plantation industry-reduced arable land deemed
suitable for grazing. Furthermore, animals need food supplements to enhance their growth
rate and keep them healthy, and animal feed contributed more than 60 per cent of the cost
of production. The annual requirement for animal feed was around seven million tons a
year, of which 70 per cent of raw materials was imported. At the same time, each year
Malaysia imported more than 3.5 million tons of animal feed, valued at more than RM4.0
million, and the Malaysian livestock industry was greatly dependent on the importation of
animal feed. The import of animal feed materials is shown in Table II.
Table II shows the quantity and value of animal feed materials imported for the livestock
industry in Malaysia. This Table II shows that from 2005 to 2009, the quantity and value of
imported animal feed increased more than 35 per cent and affected the Malaysia balance
of trade. The short supply of animal feed could be translated positively as a great business
opportunity for entrepreneurs in this industry. On the other hand, the invention and transfer

Table I Livestock industry production and growth rate: actual and forecasted
Production (’000 metric tons)
2011-2012 2013-2014
Industry segment 2008 2009 2010 achieved AGR (%) target AGR (%)

Beef 17.5 28.5 45.0 10.2 12.5

Mutton 0.9 1.5 2.3 10.8 12.5
Pork 159.8 209.0 241.0 5.5 2.5
Poultry meat 714.3 980.1 1,295.0 6.5 5.5
Eggs 399.0 443.0 600.0 2.1 2.5
Fresh milks 29.5 41.1 68.4 6.9 10.5
Note: AGR (average growth rate)
Source: Malaysian Economic Development Plan (2009)

Table II Import of animal feed materials

2005 2009
Item Quantity (million MT) Value (million RM) Quantity (million MT) Value (million RM)

Animal feed 4.656 4.332 15.323 15.437

Source: Global Trade Information System (GTIS) (2005/2009)

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 2 2015

of animal feed products technology could become the remedy of the problems faced by
this industry.
There were more than 43,300 cattle farmers and 25,500 sheep/goat farmers in Malaysia,
most of whom were small farmers who owned less than 10 animals. In 2009, there were
more than 1.1 million cattle and 550,000 sheep/goats being reared in Malaysia, and the
growth targeted was expected to be 5-10 per cent a year. The source of animal feeds was
primarily open grazing pastures and silage made from agricultural by-products. Very few
farmers fed their animals with food supplements because they were imported and very
expensive, so farmers were forced to give licking salts as a food supplement to their
animals as an alternative.

Development of Nutriblock
Dr Wan had gained experience in several research areas, particularly in the nutrient
requirements of ruminants, utilization of agro-industrial by-products as feed, development
of nutrient supplements and mineral metabolism. He had successfully formulated the
UMMB supplements based on his previous research work and extensive literature survey
on the subject matter. He named his UMMB Nutriblock to promote its nutritional block
features.
Nutriblock is an animal feed supplement in the form of blocks for ruminants which contains
urea (as a nitrogen or protein source), molasses (as an energy source), vitamins, minerals
and other nutrients. The price of this supplement is quite reasonable compared to imported
alternatives and had proven to be effective in providing a range of nutrients required by
ruminants for their better performance.
The idea of developing Nutriblock began in 1993 when Dr Wan realized the need for a food
supplement for the livestock industry in Malaysia. His research revealed that during that
time, there was a high dependency on the importation of lick blocks in Malaysia. However,
there were still nutrient deficiencies in many animals. Dr Wan recognized the need to
develop a nutrient block that could enhance the performance of animals, not only in terms
of their daily growth rate but also in their fertility. In doing so, it was necessary for MARDI
to develop a nutrient block by using local formulations and local raw materials, as most
available products were imported. The development of the local nutrient block aimed to
provide a suitable quality product for local and imported ruminants raised in Malaysia. Wan
explained to Dr Azizan:
The product was a common feed supplement for ruminants and had been developed elsewhere
in other parts of the world. Many reports and literature revealed that the use of nutrient blocks
began in the 1930s, but the first systematic application was done in South Africa in the 1960s.
However, at that time it was known as a mineral block and it contained only urea and salt. In the
early 1970s, the blocks were produced mostly by feed manufacturing companies and were very
expensive. Thus, their use in developing countries, including Malaysia was negligible. The
addition of molasses, minerals and vitamins, only occurred in the early 1980s. The awareness
of the utilisation of the lick block for smallholders in developing countries gave rise to work on
the simplification of the block production technology which gained momentum through the
efforts of the Food and Agriculture Organization or FAO. In Malaysia, the use of lick blocks
began in the 1980s, but all the products were imported. Malaysia did not produce its own
supplements and furthermore, the market was very small. That is how I came across to produce
our own livestock feed.

In the 1990s, developing the local nutrient block was critical due to the fertility and growth
rates of livestock being very low. The lower performance rate could adversely affect the
future development of the livestock industry in Malaysia. Traditionally, breeders gave a lot
of forage and lick blocks to cattle, but their performance did not change positively, and a
new solution was crucially required to overcome this challenge. An application of a nutrient
block with a high phosphorous and calcium content was seen as the proper solution.
Breeders were only aware of the use of lick blocks as an animal feed supplement, but still

VOL. 5 NO. 2 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 did not recognize UMMB as having better nutrient components, and breeders could not
differentiate between the usual lick block and UMMB. As a simple comparison, a lick block
was required to have a hole through it for it be easily suspended and it to be hard enough
to force the ruminants to lick and not to bite it. However, the UMMB did not have a hole
because it was a softer cake that would enable the ruminants to bite it, and breeders were
looking for a lick block which their animals could lick continually, as Malaysian breeders
preferred to see their cattle licking a hanging block.
In the 1990s, almost all lick blocks used in Malaysia were imported. These lick blocks
contained specific nutrients: mostly (80-90 per cent) sodium chloride, and the balance was
made up of small amounts of phosphorous and calcium. The imported lick blocks were
lacking in phosphorous, which was required by Malaysian ruminants, in addition to sodium
and cobalt. Furthermore, the mineral contents in the imported lick blocks were fixed,
whereas the minerals requirement was very diverse depending on locality. For example,
the minerals required by ruminants in Pahang were different from the one in Terengganu
and Kelantan. The ruminants required a complete diet which was normally unavailable in
ordinary forage and crop by-products. A comparative study carried out by Dr Wan revealed
that Nutriblock increased the daily weight of ruminants significantly compared to imported
products (Table III).
The Nutriblock formulated by Dr Wan and his team was a combination of more than ten raw
feed ingredients, mostly local agro-based by-products. The uniqueness of this product
compared to the imported ones was the addition of anthelmintic medication. This nutrient
block contained a steady dose of medication suitable for nematode control. The
introduction of the medicated formulation was to reduce animal mortality rates caused by
worms. Dr Wan used several local feed resources as components, and the main materials
used were agricultural by-products such as palm kernel cake (PKC), palm oil mill effluent
(POME), rice bran, cassava starch, tapioca waste and brewer’s waste. High protein
legumes and weeds such as Leucaena leucocephala and Asystasiaintrusa were used as
nitrogen (N) sources. All raw materials were accurately weighed and mixed in accordance
with the formula.

Technology transfer process of Nutriblock

The MARDI is a renowned public research institution that had been mandated to conduct
scientific, technical, economic and sociological research with respect to production,
utilization and processing of all crops, except for three agriculture commodities (rubber,
palm oil and cocoa) and livestock. Its main objectives were to develop, generate, promote
and transfer technologies toward the advancement of food, agriculture and agro-based
industries in Malaysia, and it was mandatory that all technologies developed by MARDI be
transferred to benefit farmers and society in the country.
MARDI’s technology transfer approach evolved from a simple dissemination of technology
transfer through papers presented at seminars and conferences to more complicated
methods. One of the most common technology transfers was through other extension
agencies where the technology was transferred as public domain and could be used by
anybody at free of charge. The other approach was a direct technology transfer to

Table III Comparative studies between local medicated UMMB and imported UMMMs
Intake of medicated UMMB Average daily live-weight gains at
Supplement (g) at Week 9 week 9 (g/day)

Control 0 44
Nutriblock 74.3 85.0
Product from Japan 109.3 36
Product from Australia 69 36
Source: Livestock Research Centre Project Report (2015)

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 2 2015

entrepreneurs through the licensing of the technology’s IPR. Generally, the selection of the
mode of technology transfer is determined by the extent to which the technology benefits
the public in general. If the technology could benefit the farmers in general and be
transferred through mass transfer, it can be considered public domain technology. On the
other hand, if the technology needs to be manufactured before it can be transferred to the
public, it can be considered a commercial technology and be commercialized by licensing
its IPR. The process flow of technology transfer at MARDI is shown in Figure 1.
In general, the process of technology transfer could be divided into two approaches. The
first approach is a direct technology transfer from MARDI to a company, while the second
approach is an indirect technology transfer, where MARDI transfers its technology through
extension agencies such as the Department of Agriculture, the Department of Veterinary
Services and the Farmers Association. The direct technology transfer involves the
commercialization of a technology through licensing its IPR, while the indirect technology
transfer aims to transfer public domain technology for the benefit of local farmers. The
committee of technology management is in charge of deciding the mode of technology
transfer.

Commercialization of Nutriblock
When the invention process was completed and the technology was ready to be used by
the public, Dr Wan presented a paper to the committee about technology management at
a meeting in 2003 to get the official green light to commercialize his new technology. At that
time, Dr Wan had no idea on the best mode of technology transfer. He was passionate
about seeing his technology being used by and benefiting farmers. Personal satisfaction
was more important to him, while financial rewards was considered secondary motive.
Dr Wan was contacted by Ibrahim, a Senior Research Assistant from the BDU, a technology
transfer office that was responsible for the commercialization of commercial technology in
mid-2003. Ibrahim informed Dr Wan that his technology would be commercialized by a
company called March Avenue Technology Sendirian Berhad (March Avenue). They
discussed the production of Nutriblock on a commercial scale, and Ibrahim requested the
formulation for developing the Nutriblock. Some of the information given by Dr Wan was
input into the preparation of the memorandum of agreement.
March Avenue was established in 2003 by two close friends, Karthiir, a lawyer by
profession, and Ma Irwan, an electrical engineer at the National Electrical Board. Karthiir
was also involved in rearing goats in Puchong, Selangor, a state in the central region of
Malaysia, and a local leader of one of the Indian political parties that had strong connection
with the government. Karthiir invited Ma Irwan to form March Avenue when he discovered
MARDI was looking for a company that had the capability to adopt its technology. The

Figure 1 Process of technology transfer practice by MARDI

VOL. 5 NO. 2 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 Ministry of Agriculture and Agro-based Industry, through Agro-bank, provided a soft loan
under a program called Fund for Feed (3F), and they wanted to use the licensing
agreement document to support their application for a loan. BDU considered March
Avenue a small start-up company that embarked on commercializing as many technologies
as possible.
March Avenue obtained a loan amounting to RM1.6 million from Agro-bank and used the
money to set up a factory in Serdang, Selangor. Dr Wan and his team helped March
Avenue deal with suppliers when it came to purchasing machines and the raw materials,
and to test run the machines.
In early 2006, March Avenue started the production of Nutriblock. As the disclosure fee had
not been paid in full, Dr Wan did not release the complete formula for solidifying the
Nutriblock. After the total amount of the disclosure fees had been paid, Dr Wan released all
information about the formula and production system to March Avenue. All production of
Nutriblock was then carried out at the factory in Serdang.

Production and marketing of nutriblock

March Avenue began manufacturing the Nutriblokc in small production capacity of about
100 kg cycle or around 200 blocks per day. Each block weighed four kilograms and was
sold for RM15. The production and marketing of Nutriblock was very efficient in the first
year, as the production required small quantities of raw materials and resources. Initially, Dr
Wan paid weekly visits to the factory, and he and his team trained March Avenue’s workers
how to manufacture the products efficiently and to use the formulation correctly. Given the
efficient Nutriblock manufacturing operations, he began to reduce his visits to monthly or
when March Avenue had problems with the production of the outputs. Dr Wan occasionally
went to the factory for spot-checking and to examine whether March Avenue had followed
MARDI’s standards of procedure and all formulation as per the agreement.
The production and marketing of Nutriblock went smoothly until the end of 2007. March
Avenue had employed a marketing manager and 12 marketing agents in all states in
Malaysia, but these agents did not receive any formal training on the conceptual and
practical applications of the nutrient block as an animal feed supplement, as March Avenue
had only supplied them with brochures. Among these agents, only one, who covered the
Kelantan region, was an efficient salesperson and alone sold more than 7,000 packs of
Nutriblock in four years, significantly more than any other salesperson. Ma Irwan failed to
strategize the marketing of Nutriblock effectively. For example, his company failed to
penetrate the Sabah and Sarawak markets, two states in different regions of Malaysia, both
of which are huge but far from the company headquarters. The marketing efforts in these
markets would increase the cost of marketing, and the company needed new business
models to penetrate them. The biggest failure of March Avenue was its inability to sell its
products to the Department of Veterinary Services, the biggest customer for Nutriblock.
The problem started in early 2008, the third year of the company’s operations, when Karthiir
left the company due to a disagreement with Ma Irwan who employed three of his friends,
Amri Datuk, Abdul Rahman and Ain, as his new business partners, but March Avenue
started to face a bigger problem in the middle of 2008 that affected its business operations.
Ma Irwan explained his problem as follows:
Our failure began in year three. There were two main problems. Our first problem was relating
to raw materials. We had problems getting the raw materials in large quantities. We needed 12
types of raw materials. For example, we needed to buy imported dried brewers’ grains which
could not be replaced with local raw materials. The formulation was very rigid, and could not be
changed. If we changed the formulation or the raw materials, the quality of the products would
be affected. We could not buy raw materials in bulk to reduce the cost. For example, if we were
to buy copra in bulk, it would decompose and smell badly and this would affect the quality of
our Nutriblock. Our Nutriblock would then smell badly and be difficult to market. The raw
materials such as rice bran were also controlled by the suppliers. They controlled the supply

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 2 2015

 and prices of the raw materials. The second problem was related to marketing. We had to
compete with the imported red lick block, which was cheaper than our product. We had
appointed agents in all states and regions, including Sabah and Sarawak, but they had failed
to market the products.

The problems in marketing the products had adversely affected the cash flow of March
Avenue. It had financial difficulties operating the factory and manufacturing the products.
Ma Irwan had little experience and capability in managing such a large-scale business and
did not conduct a proper market study to identify the markets for his products. As Ma Irwan
stated:
In four years, we only produced 20,000 packs of Nutriblock. Out of these, we sold 18,000 packs
and the balance was returned by our agents because of product defects. I had made a wrong
calculation. My target was only for 7,000 packs per month or 84,000 packs per year. In order
to pay the expenses for our operation and to repay the bank loan, we must sell at least 200,000
packs a year. This was impossible in the domestic market. If we wanted to achieve this target,
we need to export the products. Actually we did not assess the market properly. I was not very
sure the quantity of Nutriblock that the market really required. It was just a gamble.

March Avenue and its factory closed down in 2009, after about four years of operation. The
company had not paid any royalties to MARDI within this four-year period.

Time to make a decision

The experience of commercializing his technology under March Avenue traumatized Dr
Wan. He firmly believed that his technology was good and a viable project that could
enhance the livestock industry. At the end of 2009, when the licensing agreement between
MARDI and March Avenue ended, Dr Azizan, the newly appointed Head of BDU, wanted
to license the technology to a new company that had experience in the production of animal
food supplements. He had investigated the background of the company and was
convinced by its financial capability. Dr Wan, on the other hand, was disappointed by the
Keywords: past experience and instead wanted to transfer its technology as a public domain. He
Commercialization, wanted to see that his technology would benefit the farmers. To him, his personal
Malaysian Agricultural satisfaction was to see the livestock industry bounce back and become a wealthy industry.
Research and Development Dr Wan was concerned about the importance of the technology generator to the committee,
Institute, for technology management to make an informed decision about the mode of technology
Urea molasses mineral block transfer about whether to give a second chance to BDU or use a new approach.

References
Global Trade Information Services (2005/2009), available at: www.tradedata.net/Services/Global-
Trade-Analyses/Global-Trade-Analysis.asp?

Livestock Research Centre Project Report (2015), Comparative studies between local medicated
UMMB and Imported UMMMs. Project report (unpublished).

Malaysian Economic Development Plan (2009), Economic Planning Unit, Prime Minister Department,
Kuala Lumpur.

Further reading
Interview with Dr Wan Zahari’s, chief technology generator of the Strategic Research Centre, MARDI.

About the authors

Dr Rozhan Abu Dardak is the Director of Economic and Technology Management
Research Centre, MARDI. He has received his Doctor of Business Administration degree
from Universiti Kebangsaan Malaysia. He has presented papers at various international
and national conferences and published articles in peer-reviewed international journals.

Dr Farzana Quoquab is a Senior Lecturer at International Business School, UTM. She has
received her Doctor of Business Administration degree from Universiti Kebangsaan

VOL. 5 NO. 2 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 Malaysia. She has presented papers at various international and national conferences and
published articles in peer-reviewed international journals such as Global Business &
Economics Anthology, Procedia – Social and Behavioral Sciences, IIUM Journal of Case
Studies in Management, World Review of Business Research, Business and Management
Quarterly Review, Economics and Technology Management Review, Global Business and
Management Research: An International Journal, Asian Case Research Journal, Asia Pacific
Journal of Marketing and Logistics, International Journal of Economics and Management,
International Journal of Business Governance and Ethics and Asian Academy of
Management Journal. She is an editorial board member of Case Studies in Business and
Management.

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 2 2015