Why “only”? According to the 2008 Medical Market Factbook, that level of growth, fantastic in almost any other sector, actually puts the region at the bottom of its forecast, trailing Central/Eastern Europe (43.7%), Asia Pacific (38.6%), Western Europe (32.4%), and the Middle East/Africa (22.8%). Total global market expansion over that time frame is pegged at 28.1%.
Therein lies the allure of the medical market. Following a recession that saw cyclical plastics markets like consumer goods, appliances, housing, and automotive enter free fall, and even witnessed a stalwart like packaging take a step backwards, the medical sector’s expansion continued unabated.
Leading that expansion, albeit at slower rates than elsewhere, is the United States, which remains the largest consumer and producer of medical devices. According to the U.S. International Trade Administration (ITA), the United States’ medical device market was valued at more than $100 billion in 2008, accounting for roughly 42% of the world’s total.
Beyond its own shores, U.S. exporters of high-technology medical devices are increasingly targeting China on the basis of its large population and strong economic growth. Including Hong Kong, the ITA report noted that China is the second-largest Asian market for medical devices, having imported about $1.5 billion of U.S. product in 2008. The report forecasts that U.S. medical device exports to China are expected to increase 5%-10% annually for the “foreseeable” future. China’s overall market for medical devices is estimated to have reached $5 billion in 2010.
The ITA report notes that despite its current standing at the top of the sector, the most promising locales for medical devices are located in China, India, Southeast Asia, and Latin America, most notably Brazil. In 2007, the total value of industry shipments for U.S. medical devices shipped to those regions was $98 billion, experiencing approximately 6% annual growth.
While the medical market is vibrant the world over, it is also among the most demanding sectors to serve. Rigorous oversight from regulators and customers, including regular audits, and 100% control over production from raw materials through to finished parts, requires robust operational management. Three suppliers serving the market recently offered their insights into the potential pitfalls and windfalls to be found.
Great opportunity, great challenges
Value Plastics, a molder of fluid connectors with a substantial amount of its business derived from medical, was founded by an entrepreneur who, disappointed in the quality of the fittings he sourced, brought production in-house. That desire for control remains at the company, by necessity.
“Corrective and preventive actions we tackle very quickly,” explains John Gibson, Value’s VP operations. “You spend a lot of time on this when you’re in the medical marketplace because you have to have a robust quality management system. Like anybody, [our customers] are pushing cost down the supply chain. They’re not going to risk a $5000 device for a product recall because of a $0.25 fitting. They scrutinize us very rigorously; we submit to a lot of customer audits every year.”
Polymer Technologies Inc. (PTI; Clifton, NJ) derives about 40% of its business from the medical market, for which it uses both plastic and metal injection molding, with the remaining sales coming from aerospace and defense. Neal Goldenberg, son of company founder Milton Goldenberg, became president of the business last year and immediately understood the demands of the market his company increasingly serves.
“You have to have that kind of accountability in the medical device market, for sure,” Goldenberg says, “and be able to substantiate where you stand on any particular parts that are going out that door.”
Reaction injection molding (RIM) firm Premold Corp. derives 90% of its business from the medical market, a sector it has served for more than 25 years, giving it an acute appreciation for the sector’s rigorous demands, something some of the shops that have recently entered the market may not have.
“There are more competitors now than 20 years ago as suppliers have moved into a market that’s relatively stable year-in, year-out,” says Doug Culbertson, VP business development at Premold. “However, to ensure they’re getting the latest technology and services, medical equipment customers increasingly seek out suppliers that specialize in the industry. Medical equipment OEMs and ID [industrial design] firms want to be sure they’re working with suppliers that can meet the industry’s challenging technical and cosmetic requirements.”
Material makers follow the money
Material suppliers, much like the converters to whom they provide material, have also been attracted to the strong growth found within the medical sector, and in doing so have brought many new grades of materials to market in recent years. “I would say the rate at which new materials are being developed and introduced to the market is one of the biggest changes I have seen in the market,” PTI’s Goldenberg says. “I think [material suppliers] see their niches and are trying to carve out a specialty product or resin, a niche for themselves.”
Many of these materials, coupled with tooling and processing, are enabling a new design aesthetic within medical, one that is ongoing, as inelegant, cold-looking equipment takes on a sleeker, warmer look. “The medical equipment market is moving toward more stylized housings and away from the boxy designs of the past,” Premold’s Culbertson says. “RIM is a design-generous process suitable for highly stylized parts. We’ve developed an approach to molding where we collaborate with equipment makers early on during the design phase to help them achieve the styling and precise fit-ups that will help their instrument stand out in the marketplace.”
For Value and other firms serving the medical sector, creating a product that stands out in the market can be a very lucrative proposition, making any request for a prototype a potential game changer. “We make a purposeful effort to service everyone the same,” Value’s Gibson says, “because you don’t know. That 100-piece order that came from some R&D guy at a medical device maker . . . you get that spec’ed to the disposable side and an opportunity like that can go from 100 parts to several million very quickly.” —Tony Deligio
Value Plastics Fort Collins, CO
• Injection molding, moldmaking, assembly
• 40,000 ft2
• 30 injection molding machines
“We outsource very little for the type of company we are. I guess you could say we’re control freaks, but we get a lot out of that.”
Polymer Technologies Inc., Clifton, NJ
• Plastic and metal injection molding
• 150,000 ft2
• 24 injection molding machines (three dedicated for MIM)
“We love PEEK because a lot of people are scared of it due to the cost.”
Premold Inc. Oconomowoc, WI
• Reaction injection molding (RIM)
• 30,000 ft2
• Five production presses
“To ensure they’re getting the latest technology and services, medical equipment customers increasingly seek out suppliers that specialize in the industry.”