At Medtec, high-tech molders seek the medical applications cure

The market demands the skills built up in other markets such as telecom, but is perceived as more immune to low-cost competition.

It is by no means the easiest market to enter, and processors averse to arguments over product liability should steer well clear. But for those with the technical capability, the medical device sector is rather more stable, and probably more profitable in the long term, than other technical markets like automotive and telecom. (March 2003 MP/MPI).

At the Stuttgart Medtec 2004 show in March for the medical device manufacturing industry, companies like Balda and Perlos, well known in the mobile phone and medical sectors but increasingly active in the latter, were prominent. Smaller processors were making first-time bids, while those well-established were looking to strengthen their holds.

Seppo Arento, Vantaa, Finland-based sales and marketing VP for pharma products at Perlos, says production of medical components is not so easy to transfer from the West to Asia. "The two sectors have different logistical systems," he says. "Filling of medical (containers) is still largely done in the West, for example." Producing medical packaging in one place and filling in another negates much of the potential cost advantage.

(Perlos converted a U.K. facility from telecom to medical two years ago, and last year doubled the size of its cleanroom facility there. Arento refers to the U.K. as medical''s Silicon Valley, because of the concentration of design companies there working in the field.)

Dutch processor Rompa, which specializes in inmold decoration for (mostly) consumer electronics using high-end films from Japanese firm Nissha (Kyoto), and is looking to expand its medical activities, was a first-time exhibitor, as was Telegartner Kunststofftechnik (Steinbronn, Germany).

Telegartner, which is carving out a niche in high added-value multicomponent parts, has a relatively long history in medical. It targets small assemblies that are generally produced in several stages, often with substantial manual input, and devises ways to produce them in a single, if highly elaborate, molding process. By so doing, Managing Director Frank Heinzelmann says it can slash up to 60% of total cost.

Nypro''s bold growth bid

Nypro has already made a name for itself in medical component supply, but it has recently decided to re-emphasize its presence. Currently, 49% of the company''s turnover derives from electronics and telecom business. But Thomas Taylor, VP for business development at the company''s new Medical Products Group, says that figure is likely to decrease.

"Medical has been a very stable business for many years, with steady growth and healthy margins," he says. "Especially when we went through the last downturn in the economy, everybody started to remember the value of the medical business, so for 2004, upper management decided a key goal is to grow business in the medical market."

The Medical Products Group is headed by Randall Barko, chairman of Nypro company NP Medical, which forms the platform of the new business, and makes proprietary IV flow control and needleless access devices.

Nypro''s short-term goal is to grow the medical business from a budgeted $26 million for 2004 to $50 million—and on to $200 million inside five years.

"With the existing product line it is going to be impossible to reach that short-term goal, so we are going to bring in some other products to increase the portfolio," Taylor says. "I will be doing a lot of buying, and it has to be very synergistic stuff."

He is currently looking at increasing Nypro''s capability in technologies such as micromolding and liquid silicone rubber molding. Taylor notes that Nypro "does no LSR molding right now, but we buy a lot of LSR components."

"If successful, we would have 100% proprietary products operations like NP Medical, proprietary products JVs, proprietary process JVs and, in the long term, proprietary assembly and product development JVs, with companies that would do the engineering of a part."

Peter Mapleston [email protected]

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