the medical device industry in mexico - sun corridor inc.€¦ · the medical device industry in...

The Medical Device Industry in Mexico

Business Intelligence Unit 2015

Index 1. Healthcare Providers

2. The Medical Device Industry in Mexico §  Industry Indicators in Mexico

§  Production and Consumption

§  Mexico's International Trade

§  Foreign Direct Investment (FDI)

§  Companies

§  Supply Chain

3. Pharmaceuticals

§  Industry Indicators in Mexico 2014

§  The Pharmaceutical Industry in México

§  Production and Consumption

§  Mexico’s International Trade

§  Foreign Direct Investment (FDI)

§  Companies

4. CostS

Healthcare Providers •  In 2014, The Mexican healthcare providers sector reached a value of US$79.3 billion. Its

CAGR between 2010 and 2014 was 6.3%. •  It is expected that between 2014 and 2019 the Mexican healthcare providers sector will grow

at a CAGR of 6.1%, reaching a value of US$101 billion in 2019.

•  Outpatient care was the largest segment of the health care providers sector in 2014, accounting for 37% of the sector’s total value.

Segment 2014

(billions of US dollars)

%

Outpatient care 29.3 36.95%

Collective services 23.8 30.01%

Inpatienrt care 15.9 20.05%

Medical goods 10.1 12.74%

Long- Term care 0.2 0.25%

Total 79.3 100%

Healthcare providers by segment 2014

Healthcare providers sector projections

Source: Marketline

CAGR 2013-2018

6.1%

CAGR 2013-2018

4.1%

CAGR 2013-2018

5.9%

1. Medical devices Business Intelligence Unit 2015

Industry Indicators in Mexico Production 2014: US$15.2 billion

Consumption 2014: US$11.9 billion

Exports 2014: US$7.7 billion

Economic units* recorded in 2015: 2,344, located mainly in Baja California, Chihuahua, Coahuila, Distrito Federal, Estado de México, Jalisco, Nuevo León, Sonora and Tamaulipas

Total employees 2014: 148,266 people

* Economic units are offices, manufacturing facilities and distribution centers.

Main exports: Medical, surgical, dental or veterinary instruments and devices; orthopedic articles; mechano-therapy appliances; surgical furniture; and apparatus based on the use of X-rays.

Main investor countries in 2014: US, Germany and Italy

Compound annual growth rate (CAGR) 2014-2020: 5.3%

CAGR 2014-2020: 2.4%

Number of exporting companies in 2014: 655

Sources: Global Trade Atlas, Global Insight, INEGI and the Ministry of Economy

Production and Consumption

Production in the sector reached US$15.2 billion in 2014, and is expected to record a 5.3% CAGR in the 2014-2020 period. The industry accounted for 1.7 of manufacturing GDP

and 0.3% of total GDP.

Medical devices production in Mexico 2010-2014 (millions of US dollars)

Added value ---- Disposable was 20% / electronic devices was 36%

Inputs from foreing countries---- Disposable 32.3% / electronic devices 91.7%

Consumption in the sector reached US$11.9 billion in 2014, and is expected to record a 2.4% CAGR in the 2014-2020 period.

Medical device consumption in Mexico 2010-2014 (millions of US dollars)

Production Consumption

Source: INEGI, Global Trade Atlas and Global Insight

CAGR 2014-2020: 2.4%

12,161 13,443 14,188 14,339 15,220

2010 2011 2012 2013 2014

9,841 10,303 10,304 10,543 11,912

2010 2011 2012 2013 2014

Mexico's International Trade

Source: Global Trade Atlas

In 2014, Mexico exported US$7.7 billion, ranking as:

•Ninth largest exporter of medical devices worldwide •Largest exporter in Lat in America •Main supplier to the US

• Mexico's main trade partner in the sector is the US, with 92.5% of its exports going to that country and 62.7% of its imports coming from it.

Mexico's international trade of medical devices 2006-2014 (million USD)

• In 2014, the main products exported from the sector were medical, surgical, dental and veterinary instruments and devices.

Main products exported by Mexico in 2014

• Second largest exporter globally of tubular needles for sutures. •Fourth largest exporter globally of surgical furniture. •Fourth largest exporter globally of syringes, catheters and similar instruments.

4th


Exports Imports Balance of Trade

2nd

4th

4th

9th

1st

1st

Product Exports (millions of us

dollars) %

Medical, surgical, dental and veterinary instruments and devices 5,841 75.9%

Orthopedic items and devices 795 10.3%

Mechano-therapy, respiratory therapy and massage devices 471 6.1%

Other 592 7.7%

Total 7,699 100.0%

2,159 2,183 2,448 2,489 2,782 3,032 3,188 3,473 3,745 4,048 4,560

5,064 5,138 5,798 6,072 6,343

6,886 7,699

1,889 2,377 2,616 2,649 3,016 3,040 3,155 3,413 3,954

2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Ministry of Economy

Foreign Direct Investment (FDI)

Foreign Direct Investment into the sector reached an accumulated amount of US$1,689 million for the period 2005-2014. The main investor countries were U.S., Italy, Germany, Spain and Netherlands. In 2014, total flows of FDI into Mexico reached US$150 million.

FDI Share by investor country in 2014 January 2005 - December 2014 (million usd)

1,494

101 88 28 14 7 5 5 2 2

United States

Italy

Germ

any

Spain

Nethe

rland

s

Swed

en

France

Finland

Brazil

Cuba


17 Companie

s

Investment announcements in Mexico between 2010 and

2015/1:

Projects

Jobs

Betting on Mexico...

Source: FDI Markets. 1/ Latest figures available: March 2015.

19

6,375

13 Expansion Projects

6 New investments

Country Capital Investment (millions of US

dollars)

No. of Companies

Main Destinations: Guadalajara, Tijuana, Nuevo Laredo and Matamoros.

2 1

172 12

48 1 11 1 3 1 3 1

U.S.

Iceland

Canada

Germany

New Zealand

Colombia

Investment announcements in Mexico between 2014 and 2015:

Source: FDI Markets.

Betting on Mexico...

Date Company Country Investment

(Millions of US dollars)

JOBS Project type (New

investment or Expansion)

Description

Mar-‐15 Medline U.S. n.d. n.d. Expansion US-‐based Medline Industries has expanded its plant in Nuevo Laredo, Mexico. The company's second expansion at its facility, located at the Oradel Industrial Park, has an addiUonal 20,900 sq m and will allow the company to increase staff levels to 1,800.

Sep-‐14 Baxter U.S. 30 669 Expansion The Mexican division of Baxter will invest $30mn at its plant in Cuernavaca, Mexico. The facility will increase producUon capacity by 40% and is likely to generate new employment opportuniUes in the region.

Jul-‐14 CareFusion U.S. 6 100 New investment CareFusion has invested $6mn to expand its faciliUes in Tijuana, Mexico. The company will create 100 new jobs to increase its medical devices producUon from 1 to 1.5 million units daily to serve the US market.

Jul-‐14 B. Braun Melsungen AG Germany 3 68 Expansion

Germany-‐based healthcare company B. Braun Melsungen will invest $3 mn to expand its plant in Santa Cruz AUzapán, Mexico. The company will build a 1,400 sq m logisUcs complex and will triple the producUon space by installing a line to manufacture spine implants. The expansion is scheduled for compleUon in the first quarter of 2016.

Jun-‐14 Phase 2 Medical Manufacturing U.S. 1 20 New investment

Phase 2 Medical Manufacturing, a contract medical device manufacturer, has opened a new producUon facility in Tijuana, Mexico. The 2,790 sq m facility has created 20 new jobs.

Feb-‐14 Pexco U.S. N.A. N.A. Expansion Pexco (medical plasUcs processing) plans to expand its facility in Mexicali. The expansion is expected to be completed by August 2014.

Feb-‐14 Surgical SpecialUes Canada 11 900 New investment

Surgical SpecialUes, subsidiary of Angiotech PharmaceuUcals, plans to open a new manufacturing facility in Tijuana, for producing blades and sutures for surgical use.

Feb-‐14 Fisher & Paykel Healthcare New Zealand 3 74 Expansion Fisher & Paykel Healthcare(designer and manufacturer of respiratory care devices)

will invest $3.3 mn to expand its manufacturing facility in Tijuana.

Jan-‐14 Mediimplantes Colombia 2 120 New investment Mediimplantes (manufacture of spinal implants and surgical instruments) plans to establish a $1.6 mn facility in Guadalajara, scheduled to be operaUonal in 2014.


Companies

Source: INEGI and Ministry of Economy

In 2014, 2,344 economic units* specialized in medical devices had operations in Mexico. The same year, approximately 655 companies reported exports.

*Includes companies, plants, commercial and sales offices

Baja California: •  Location of Mexico's main medical

devices cluster. •  Accounts for 33% of the country's

total exports in the sector. •  Has 189 economic units and over

80 companies that export medical devices.

Source: ProMéxico with data from the Ministry of Economy

Supply Chain Electronics Industrial Processes

Company Country of origin

Presence in Mexico

Foxconn Taiwan Chihuahua, Baja California and Tamaulipas

Flextronics Singapore Jalisco, Chihuahua and Aguascalientes

Jabil US Tamaulipas, Jalisco and Chihuahua

CelesDca Canada Nuevo León and Tamaulipas

Sanmina US Jalisco

Plexus Brazil Baja California

Wistron Taiwan Chihuahua

There are several companies that provide important processes for the medical devices manufacturing industry in Mexico, which are located mainly in Coahuila, Nuevo León, the State of Mexico, Chihuahua, Puebla, Tamaulipas, Durango and Mexico City.

One area of the electronic industry takes care of the manufacturing, assembly and incorporation of electronic components into medical devices. Leading global electronic manufacturing services providers (EMS) have operations in Mexico.

Source: ProMéxico Source: ProMéxico

Machining 310 companies

Foundry 102 companies

Mechanical Assemlies 221 companies

die casting 50 companies

Die-Cutting and Stamping 225 companies

Plastic injection Molding 114 companies

Thermal Surface Treatments

160 companies

Costs

Mexican Offer

Costs Mexico offers lower operation and labor costs for every level of specialization, as well as lower manufacturing costs for medical equipment, electronic devices and precision components, in comparison to countries that are representative of the industry.

Compared to the US, Mexico offers 18.9% savings on manufacturing costs for the medical device industry.

Index of savings on medical device manufacturing costs 2013

Compared to the US, Mexico offered 7.8% savings on manufacturing costs for precision components, making it a globally competitive country.

Index of savings on electronic systems development and tesDng costs 2013

Compared to the US, Mexico offered 39.3% savings on product testing.

Source: KPMG, Competitive Alternatives, 2014



Index of savings on precision component manufacturing costs 2013

-‐18.9% -‐5.4% -‐5.0% -‐4.2% -‐2.8% -‐2.6% -‐1.1% -‐0.7%

0.0% 0.2%

Mexico Canada Netherlands U.K. France Italy Japan Australia U.S. Germany

-‐7.8%

-‐3.4% -‐3.1% -‐1.9% -‐1.5% -‐0.7% -‐0.1%

0.0% 0.5% 1.1%

Mexico U.K. Canada Netherlandas Japan France Australia U.S. Italy Germany

-‐39.3%

-‐20.0% -‐18.5% -‐14.3% -‐11.9% -‐10.0% -‐6.7% -‐6.4% -‐4.6% 0.0%

Mexico Netherlands Canada U.K. France Australia Italy Japan Germany U.S.

1. Pharmaceuticals Business Intelligence Unit 2015

Production 2014 US$11,430 million

CAGR 2015-2020 8.7%

Consumption 2014 US$16,916 million

CAGR 2015-2020 8.4%

E x p o r t s o f t h e pharmaceutical industry US$1,847 million

Imports of the pharmaceutical industry US$4,939 million

Main investor countries in the sector United States, Ireland and Spain

Companies in Mexico MSD, Boehringer Ingelheim, Schering Plough, Bayer, AstraZeneca, Pfizer and GlaxoSmithKline, among others. Total employees 59,386

Foreign Direct Investment (FDI) 2005-2014 US$3,172 million

Industry Indicators in México 2014

The Pharmaceutical Industry in Mexico

Mexico is the second largest market in Latin America in the

pharmaceutical industry and also an important producer of

high-tech drugs.

20 out of the 25 most important companies worldwide have

presence in the country.

Mexico has become an attractive destination for

investment in the pharmaceutical industry due to an improved

regulatory framework and to the increase in quality certifications.

Production and Consumption In 2014, Mexico’s pharmaceutical sector produced US$11,430 million. It is expected a CAGR of 8.7% between 2015 and 2020 .

The industry accounted for 2.9 of manufacturing GDP

and 0.48% of total GDP, and its added value was 54%.

41.6% of production inputs came from foreing

countries.

Consumption of pharmaceutical in Mexico reached a value of US$16.9 billion. It is expected to record a CAGR of 8.4 % for the next five years.

Source: INEGI

Pharmaceutical Production Forecast 2010-2015 (Millions of US dollars)

Pharmaceutical Consumption Forecast 2010-2015 (Millions of US dollars)

13,143

12,656

13,236

13,656

11,430

2010 2011 2012 2013 2014

15,857

15,129

16,158 15,972

16,962

2010 2011 2012 2013 2014

Source: INEGI yGlobal Insight

I n 2 0 1 4 , M e x i c o w a s t h e l e a d i n g pharmaceutical exporter in Latin America, with total exports of US$1,847 million.

Main Export Destinations 2014


Main products exported by Mexico: •  Medicines containing alkaloids or their

derivatives •  Antiserums •  Drugs containing antibiotics

The same year, Mexico imported pharmaceutical products for a total of US$4,939 million. Mexico’s main suppliers were United States, Germany and France. Main Suppliers 2014

Mexico’s International Trade

País Millions of US dollars %Part %

2012 2013 2014 2014 2014/2013

1 United States 414 452 444 24.03 - 1.77 2 Switzerland 17 17 225 12.21 1252.08 3 Panama 223 191 206 11.16 7.97 4 Venezuela 329 263 202 10.92 - 23.21 5 Colombia 111 96 109 5.93 13.94 6 Ecuador 79 67 77 4.15 13.75 7 Guatemala 68 62 73 3.96 18.10 8 Brazil 141 105 67 3.64 - 36.18 9 Canada 55 30 55 2.97 81.48

10 France 34 42 43 2.31 2.57 Otros 404 385 346 18.7 10.2 Total 1,874 1,709 1,847 100.00 8.03

Country Millions of US dollars %

2012 2013 2014 2014/2013 1 United States 1,168 1,130 1,045 - 7.47 2 Germany 791 849 901 6.16 3 France 470 554 559 0.84 4 Puerto Rico 429 345 423 22.75 5 Switzerland 288 292 303 3.80 6 Italy 218 202 215 6.47 7 Canada 152 156 189 21.71 8 Ireland 103 138 118 - 14.65 9 Belgium 90 111 115 3.72

10 Spain 100 113 112 - 0.49 Otros 1,175 1,150 958 -0.17 Total 4,985 5,038 4,939 - 1.98

Main markets of mexican exports of pharmaceutical industry 2014 (mdd)


United States 24%

Switzerland 12%

Panama 11%

Venezuela 11%

Colombia 6% Ecuador

4% Guatemala 4%

Brazil 4%

Canada 3%

France 2%

Others 19%

Others [PORCENTAJE]

1,266 1,257 1,225 1,311 1,305 1,274

1,461

1,774 1,874

1,709

1,847

-‐1% -‐3%

7%

-‐1% -‐2%

15%

21%

6%

-‐9%

8%

-‐15%

-‐10%

-‐5%

0%

5%

10%

15%

20%

25%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Exports of pharmaceutical industry 2004-2014 (mdd)


2,169 2,435

3,025

3,389

4,063 3,881

4,325 4,540

4,985 5,038 4,939

12.3%

24.2%

12.0%

19.9%

-‐4.5%

11.4%

5.0%

9.8%

1.1%

-‐2.0%

-‐10.0%

-‐5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Imports of pharmaceutical industry 2004-2014 (mdd)


Foreign Direct Investment Between 2005 and 2014, the pharmaceutical sector received US$3,172 million of FDI. In 2014, the country received US$174 million of FDI.

Source: Ministry of Economy *1 st Quarterr

FDI by country (millions of US dollars) 2005-2014

Country FDI United States 1,154 Luxembourg 370 Ireland 369 Germany 364 Spain 234 Others 681 Total 3,172

Mexico has become an attractive destination for investment in the pharmaceutical industry due to its wide market and the improved legal framework that protects intellectual property and opens new business niches such as generic drugs and biopharmaceuticals.

Spanish companies like Almirall and Genome Systems are interested in investing in Mexico in order to expand its presence in emerging markets.

Several companies such as Daiichi Sankyo Pharmaceutical Company and Chiesi have begun operations in Mexico in order to sell their products in the Mexican market and other countries in Latin America

The industry requires greater investment in the subsector pharmochemicals, in order to provide inputs and active ingredients for the Mexican pharmaceutical industry.

Foreign direct investment

There are a total of 718 economic units* in Mexico that specialize in the pharmaceutical industry. Currently, the pharmaceutical sector generates approximately 59,386 jobs. The companies are located mainly in Mexico City, Jalisco, the State of Mexico, Puebla.

Source: DENUE, ANFAM and CNN Expansión

Main companies in Mexico by sales 2014

(Millions of US dollars)

Companies

*Includes companies, plants and administrative and sales offices

Company Country Sales in Mexico 2014 millions of US dollars

Bayer de México Germany 1,430 Pfizer USA 876 MSD USA 789 Grupo Novartis México Switzerland 529

State # Economic units Distrito Federal 222 Jalisco 135 Estado México 72 Puebla 33 Morelos 31 Nuevo León 27

Veracruz 26 Querétaro 23 Guanajuato 19 Michoacán 19 Others 130 TOTAL 718

Economic Units

Companies The mexican pharmaceutical industry stands out because it counts with the presence of 20 out of the 25 largest companies worldwide, but also because its national companies are well-known for their quality and experience.

Thank You [email protected]

Business Intelligence Unit Camino a Santa Teresa No. 1679

Col. Jardines del Pedregal Del. Álvaro Obregón

CP 01900, México, D.F. Tel.: +52 (55) 5447-7000

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