Home-grown opiate of the masses
THE only Australian-owned poppy processor, TPI Enterprises, this year expects its biggest output since the company began production only three years ago - and by next year it will be one of the two biggest producers of opium derivatives in the world.
Founded in 2004, TPI reckons it will rank as one of the world's top two producers of morphine and thebaine (an opium derivative used in treatment of drug addiction), ''if not the largest in terms of production capacity,'' founder and chief executive Jarrod Ritchie confidently predicts.
Not bad for a company that was nearly sunk by a four-year legal battle started by multi-national drug giant GlaxoSmithKline. GSK had alleged that the TPI founder had taken advantage of knowledge he had gained in the seven years he worked at the company's poppy plant at Port Fairy. Mr Ritchie sold all his personal assets to fund his defence, and even represented himself for a while because of limited resources.
The Victorian Supreme Court ruled against GSK in what was described as a comprehensive rebuke of the multinational.
Now TPI, which is an unlisted public company, is thriving.
''Last year we spent $2 million on new capital expenditure, doubled our workforce, increased our scientific research and development capacities, and [we] plan to invest millions more as we grow and develop,'' Mr Ritchie said.
TPI competes with two of the world's largest pharmaceutical companies, GlaxoSmithKline and Johnson & Johnson, which have processed Tasmanian poppies since the late 1960s.
Competitors are in Spain and France. Most morphine bought by the US comes from less well-controlled poppy-growing countries such as Turkey and India because of a US Drug Enforcement Administration program aimed at curbing illegal heroin production by buying the crop from local farmers.
Mr Ritchie says TPI's edge over the giants it faces is a revolutionary water-based extraction process he and associates developed over the past decade that he says produces higher quality and is more efficient, cheaper and more environmentally friendly than solvent-based processes used by competitors.
The economies and efficiencies achieved, as well as the growing international market, allowed TPI to increase prices paid to farmers and increase acreages under poppy production, Mr Ritchie said. ''A kilo of morphine, sitting in a store, is worth $150 to $200 a kilogram. That's what we pay our farmers, about 60 per cent of our cost. In Spain they pay $100 to $125.''
With the new process proven and development under way of a high-yield hybrid poppy based on a plant bred in Israel, TPI embarked on the long and difficult process of obtaining federal and Tasmanian state government permission to buy poppies from farmers and sell the product.
A farmer cannot plant poppies until he has a contract to sell to an approved extraction company, which can buy from the farmer only if it has a contract to sell the drugs extracted to approved buyers - all before a single gram of morphine can be produced.
Mr Ritchie says production of opium-derived painkilling drugs such as morphine and codeine, as well as of thebaine, is a fast-growing industry, driven by the needs of the world's ageing population and by burgeoning demand from prosperous middle classes in India and China.
Tasmania, the only Australian state permitted by federal law to grow poppies (''because it has a whacking great moat around it,'' Mr Ritchie quips) now produces about half the world's concentrated poppy straw (the opiates crystallised out of dried poppy heads) from which morphine, codeine and thebaine are extracted.
Tasmania's poppy production will be worth more than $30 million at the farm gate this year and several times more than that as pharmaceutical drugs.
''Our expertise is the extraction [of drugs] from plants and other natural sources,'' he said. ''That and meeting strict regulations governing the production and handling of the product.
''We are looking at other of these naturally occurring drugs. The anti-cancer chemotherapy drug Taxol, for example, which comes from the Pacific yew tree.''
Such drugs required a lot of water and Tasmania was ideally placed to develop such agri-based industries, he said.
''Agriculture is in a very interesting state of flux in Tasmania at the moment. Historically there has been a lot of broad-acre agriculture, but that doesn't suit a small area with a lot of water.
''For example, Tasmania competes in potatoes with the US, but one American grower on one farm produces more potatoes than the whole of Tasmania. So we can't compete. We're just holding on to a traditional industry, and not making much money from it.''
Tasmanian farmers should get into high water-demand crops with good value and short shelf life, he said.
Niche products were needed, not broad-acre crops - peas, potatoes and so on.
''The writing is already on the wall,'' Mr Ritchie said. ''We should be using our resources to ensure we tap into our natural assets.
''We have 60 per cent of the world's uranium, so energy is not a problem going forward, but we are not value-adding to the same degree as a lot of other countries.''
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