medical device manufacturing in asia

Pacific Bridge Medical2013 White Paper

Medical DeviceManufacturing in Asia

www.pacificbridgemedical.com

Pacific Bridge Medical2013 White Paper

Medical DeviceManufacturing in Asia

Copyright © 2013 Pacific Bridge Medical. All rights reserved. This content is protected by US and International copyright laws and may not be copied, reprinted, published, trans-lated, resold, hosted, or otherwise distributed by any means without explicit permission. Disclaimer: the information contained in this report is the opinion of Pacific Bridge Medi-cal, a subsidiary of Pacific Bridge, Inc. It is provided for general information purposes only, and does not constitute professional advice. We believe the contents to be true and accurate at the date of writing but can give no assurances or warranties regarding the ac-curacy, currency, or applicability of any of the contents in relation to specific situations and particular circumstances.

Copyright © 2013 Pacific Bridge Medical | www.pacificbridgemedical.com 3

Global Medical Device Market Trends

Growing slowly in the West – US/EU

Western device companies facing increasing cost pressures

More emphasis on cost-effective devices with fewer bells and whistles for developing countries

Growing quickly in developing countries with high double digit growth

BRIC really means China

Developing world experiencing more Western diseases as they eat more McDonald’s and Kentucky Fried Chicken

Cardiology, orthopedics and cancer growing

Developing world needs more devices to manage more Western diseases

❖

❖

❖

❖

❖

❖

❖

❖


Size and Growth of Global Medical Device Markets

Region Market Size Growth(since 2006)

North America $105 billion 13%

Western Europe $65 billion 10%

Japan $28 billion 12%

Asia Pacific(excluding Japan)

$23 billion 28%

Sources: Acmite Market Intelligence, and other PBM sources

Source: Acmite Market Intelligence

2006 2012North AmericaWestern EuropeJapanRest of Asia - Pacific


Asian Medical Market Size & Growth Rate Higher than Global Growth Rate

Cardiology: The growth in Asia is significantly above the global average (3%). The CAGR for cardiology surgery devices in Asia is predicted to be 15% from 2009-2016

Orthopedics: Asia will witness much faster growth than the rest of the world (6%). The CAGR for orthopedic devices in Asia is predicted to be 13.4% from 2009-2014.

❖

❖


Medical Device ManufacturingMoving to Asia (to reduce costs and get closer to growing markets)

*Sources: Frost and Sullivan, Department of Commerce, and other PBM sources **Asia is 90% of Other

2005 USEUJapanOther

2015


Purchasing Trends

As more device manufacturers set up operations in Asia, more purchasing managers for medical device components and medical devices are being hired locally in Asia

It is sometimes difficult for purchasing managers located in the West to buy components for factories in Asia

Purchasing decisions for medical devices are now oftentimes made in Asia, not in the West

❖

❖

❖


Other Global Medical Device Trends

Significantly tougher FDA, encouraging medical device companies to launch overseas before the US

Weaker dollar means easier to export medical devices

More local medical device manufacturing in developing countries

Local manufacturing companies in developing world can now make more sophisticated, higher quality medical devices than before

❖

❖

❖

❖


Asian Medical Device Market Trends

Explosive demand for medical devices in the Asian markets attracts Western and local medical device companies

Western medical device companies increasing sales to Asia with basic models and lower costs of their top of the line Western products (outsource)

Many more local Asian medical device manufacturers now in business making more sophisticated products with components of better quality as demand increases in the region and globally

❖

❖

❖


Main Asian Markets for MedicalDevice Manufacturing

1. Japan – largest device market in Asia ($28 billion); quality is key

2. China – fastest growing device market; quality rapidly growing

3. Korea – 3rd largest device market in Asia, increasing exports

4. S.E. Asia – growing demand for devices with an expanding middle class

Each medical device market is different. Local staff is needed in each country for the project to be successful.


Asia Medical DeviceManufacturing Trends

Western medical device manufacturers are closing Western facilities (especially in the EU) and opening new facilities in Asia

Smith and Nephew has been relocating device manufacturing processes from England to China

Boston Scientific laid off 1,000 employees worldwide in 2010 but is expected to hire thousands of additional workers in Chinaby 2016

❖

♦

♦


Western Medical DeviceManufacturers Setting UpFacilities in Asia

Medtronic

Set up an R&D center in Shanghai in 2012 to move towards local product development and commercialization in China. The company plans to hire 1,000 additional employees over the next 5 years, many of whom will be placed in the R&D center.

Set up Asia and international headquarters in Singapore in 2009 and invested $65 million on a manufacturing plant in the country in 2011. The new manufacturing facility was set up to fulfill strong future growth of cardiac devices in Asia.

Launched a joint venture with Shandong Weigao Group Medical Polymer Company in China in 2007.

❖

♦

♦

♦


Western Medical DeviceManufacturers Setting UpFacilities in Asia

Boston Scientific to invest $150 million over the next 4 years to expand manufacturing, training and marketing facilities in China. In addition, the number of R&D and clinical study employees in China will increase from 200 to 1,200. Revenues are expected to reach $500 million by 2016.

Biomet set up $15 million manufacturing facilities for orthopedic implants and medical devices in Changzhou Export Processing Zone in China

Smith & Nephew opened a 10,000 sq. feet orthopedic manufacturing facility in Beijing, China and expanded existing facilities in Suzhou, China

❖

❖

❖


Western medical DeviceManufacturers Setting UpFacilities in Asia

Flextronics/Avail opened a 600,000 sq. feet medical device manufacturing facility in Shenzhen, China and a 180,000 sq. feet medical device manufacturing facility in Malaysia to support rising demands from medical OEMs

Accellent opened a 65,000 sq. feet medical device manufacturing facility in Penang, Malaysia

❖

❖


Chinese Drug Eluting Stent Market

5 years ago, foreign imported products accounted for 75% of the DES market – Medtronic, Abbott, Boston Scientific and JNJ. Local Chinese manufacturers accounted for 25% of the market

5 years later, 75% of the DES market are local Chinese DES manufacturing companies and now only 25% of the market are foreign made products

❖

❖


Sample Manufacturing Facilitiesnear Shanghai

Industry Zone Level Location FromDowntown-Shanghai

Industry Companies Size Rent($/month)

Caohejing Hi-Tech Park

State Shanghai 20 km Information Technology, New Materials, Biotechnology & Pharmaceuticals, Aeronautics, Automotive Accessories

FMC Corporation, Kerry Bio-Science Co.,Ltd., Unilever, GE, Philips

86,114 sq feet

55,385

Minhang Econ. & Tech. Development Zone

State Shanghai 30 km Diversity of manufacturing, Hi-Tech, Logistics

Johnson &Johnson, Coca-Cola, Pepsi, Bristol-Myers Squibb

72,400 sq feet

34,142

Minhang Econ. & Tech. Development Zone

State Shanghai 30 km Diversity of manufacturing, Hi-Tech, Logistics

Johnson & Johnson, Coca-Cola, Pepsi, Bristol-Myers Squibb

106,146 sq feet

Suzhou Industrial Park

State Suzhou 70 km IC, TFT-LCD, automotive and aeronautical parts, software, outsourcing services, pharmaceutical

Johnson & Johnson, Pfizer, Lilly, Nabisco, Baxter, Honeywell, Emerson

129,171 sq feet

33,230



Johnson & Johnson, Pfizer, Lilly, Nabisco, Baxter, Honeywell, Emerson

129,171 sq feet

40,615



Johnson & Johnson, Pfizer, Lilly , Nabisco, Baxter, Honeywell, Emerson

150,700 sq feet

34,462

Linang Nicheng Industrial Park

? Shanghai 50 km Heavy-duty equipment, international logistics

Siemens, UPS, Philips, Volvo

100,000 sq feet

21,400

Kunshan new & hi-tech industrial development zone

Province Kunshan, Jiangsu province

50 km Precision Machinery,Solar Energy And Wind Energy, BIO Pharmaceutical

GE, Apex 4 buildings, 81,163 sqf each

25,520

Spark Development Zone

Municipality Shanghai 50 km Biomedicine, fine chemical industry, chemical fiber

DSM Vitamins, Xiaoxi Biotechnology, Whyte Pioneer

90,549 sq feet

23,295


Map of Sample ManufacturingFacilities near Shanghai


Summary of Cultural Issues in Asia

For each Asian country you must know the local traditions and unique cultural factors.

Not all Asian countries share the same Asian attitudes, values and mindset.

Try and get to know about these countries’ histories, culture, religion, the types of people there, etc.

How do you write your emails to Asians?

❖

❖

❖

❖


Thank You!

Pacific Bridge MedicalConnect with us today.

7315 Wisconsin Avenue, Suite 609E Bethesda, MD 20814

www.pacificbridgemedical.com

Click here to contact us about manufacturing strategies for your medical device in Asia.

http://www.pacificbridgemedical.com/

http://www.pacificbridgemedical.com/contact-us/

medical device manufacturing in asia

Health & Medicine

medical device components

global medical device

pacific bridge medicalwww

growing device market

asia smith

higher quality medical

subsidiary of pacific

japan largest device