The major push to reduce healthcare costs is creating business opportunities for medical contract manufacturers such as Vention Medical (South Plainfield, NJ), which has more than tripled in size in the past three years.
"Medical original equipment manufacturers are making significant adjustments to prepare for an environment
|George Blank is second from the right in this photo at Vention Medical, Puerto Rico.|
where products will be sold for somewhat less," Vention Chairman George W. Blank, said in an interview with PlasticsToday.com. "Our approach is to attack costs intelligently."
Many high-volume legacy products were designed in a different era when there was less emphasis on costs. Vention Design employs 80 design engineers who, in addition to designing new products, perform value engineering analysis on those products to determine how they can be redesigned to simplify and take advantage of new manufacturing and materials technology, including in-mold labeling, insert molding and two shot molding.
Interestingly, when Vention engineers invent a new product as part of that process, rights to the invention go to the customer, not Vention.
"At our very core, we have a corporate philosophy that the customer comes first, and that's an example of our approach," Blank said. That's one of the reasons that organic growth at the company has been higher than the 10% a year growth in the overall medical market served by Vention. Meanwhile U.S. gross domestic product has been advancing at just 1-3% in the past two years.
Blank, an engineer, left a management position at Johnson & Johnson in 1979 to establish a medical molding company for the health care field because it was hard to find what he needed in a plastics component supplier.
Vention Medical Timeline
MedTech Group founded in South Plainfield, NJ by George Blank as a medical contract manufacturer focusing on injection molding and device assembly.
Acquired TDC Medical of Boulder, CO. Expertise: Design and molding of single-use, handheld instruments.
Acquired Advanced Polymers of Salem, NH. Expertise: Design and extrusion of proprietary heat-shrink tubing for catheters and other medical applications.
Changed name to Vention Medical
Acquired ANSAmed of Roscommon, Ireland. Expertise: Specialty catheter-based devices.
Acquired ATEK Medical of Marlborough, MA. Expertise: Design, molding and assembly of medical devices. Adds 365,00 square feet of manufacturing space.
The company, called The MedTech Group, grew organically and with two acquisitions until 2008 when Blank hooked up with a Denver-based private equity investment firm called KRG Capital Partners. KRG Capital has a history of success in the healthcare industry including the expansion and sale of Accellent, a medical device contract manufacturer.
In 2008, MedTech bought TDC Medical, a specialist in the design and development of single-use, handheld medical instruments and interventional devices. Last year, Advanced Polymers joined MedTech. Advanced Polymers holds significant proprietary technology in the design and extrusion of proprietary heat-shrink tubing and advanced balloons used in catheters and other medical applications.
Rebranded this year
In January, the company was rebranded as Vention Medical, and Dan Croteau was hired as CEO. He had been President of FlexMedical, the global medical products contract design and manufacturing division of Flextronics.
In July Vention acquired ANSAmed of Roscommon, Ireland, a producer of complex extrusion and catheter-based devices. In November Vention acquired ATEK Medical, which significantly expands injection molding and device assembly technology and capacity.
Vention now operates about 100 injection molding machines in sizes ranging from 20 to 750 tons of clamping force as well as multiple extrusion lines. Employment is close to 1,500.
Sizewise, Vention is now in the top three of companies such as Flex Medical that focus exclusively on medical contract manufacturing. That excludes companies such as Nypro that do considerable work in other markets.
"Our goal is to develop or find technologies that would make us more helpful to our customers, and not to reach a specific financial goal such as sales of a billion dollars," said Blank. Revenues at the privately held company are proprietary.
Blank said he "very much expects" there will be more acquisitions in 2012, although it's unlikely the company will grow three-to five-fold in size again in the next three years.
The ANSAmed acquisition gives Vention a large footprint in the European market. The Irish plant is now being expanded, and more technology-oriented companies may be acquired in Europe. Both Vention and ATEK operate large clean room facilities in the same free trade zone park in Costa Rica (175,000 square feet of manufacturing space, all clean room except for mold building), providing Latin American market access. Vention also has medical injection molding and assembly plants in Puerto Rico. Asia is obviously an area of interest.
In terms of additional technology, Blank said that Vention wants to expand capabilities in several areas, including metal fabrication.
Blank had a good hunch when he entered the contract medical manufacturing business in 1979, although he said he couldn't predict the enormous growth in demand for medical products. He also said it was tough to start a molding company from scratch even though he had some experience in captive plastics molding at J&J.
He attributes his success to "a lot of great people" who helped him along the way.