Medical device makers eye vast Indian market

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NEW DELHI — Medical Fair India, formerly known as HospiMedica India, drew more than 300 exhibitors, many from foreign countries looking to make inroads into India's rapidly growing medical market.
The trade show and conference, held March 8-10 in New Delhi, focused on the latest in diagnostics, medical equipment and technology. There was significant representation from mainland China, Taiwan and Europe, as many companies scouted for partners to increase their footprints in India's potentially vast health-care sector.
Some companies are looking to break into India's market for the first time.
"India is a big market, but the biggest barrier is the high custom duty of 30 percent on imports from Japan," said Tomoyuki Satake of Tokyo-based Fujimori Sangyo Co. Ltd. The company makes medical packaging such as pouches, rolls and blister bags and is looking for distributors or partners in India.
"The current policies are favoring the growth of domestic companies. Indian government should lower duties and allow foreign players to enter and modernize the health-care sector," Satake said.
"We see lot of opportunity in the Indian market as people are getting more health-conscious," he said, adding that price is also a major issue.
The Indian health-care sector is dominated by local and mainland China players in disposable and reusable medical products. Taiwanese companies are middle-level players with significant clientele. With high-end devices, Western countries have a firmer grip, according to the Japan External Trade Organisation.
"We have a basic range, but we are supplying very special products to the Indian market — otherwise, it is difficult to compete pricewise with the Chinese and local players," said Federica Tomasini, a product specialist with Rimos srl. The maker of disposable gynecological products is based in Mirandola, Italy, which is regarded as an important area in Europe's medical industry and is home to around 70 companies manufacturing for fields like hemodialysis transfusion, cardiovascular surgery and anesthesia. According to research institute R&I srl of Carpi, Italy, those companies have combined revenue of around $515 million.
"We have had distributors in the west and southern part of [India] working with us the past many years. We are looking for more partners to expand further in other regions of the country."
Vadi Medical Technology Co. Ltd. of Kwei-Shan Hsiang, Taiwan, which makes disposable and reusable humidification chambers, breathing circuits and accessories, is also finding that price is a major issue in its growth in the Indian market.
"The price difference between Indian and Chinese products is almost 20-30 percent, compared to our product," conceded Raymond Shih, a Vadi sales specialist. He said, though, that some customers prefer products from Taiwan despite the cost.

The price difference is even greater in nephrology and dialysis devices and cardiovascular catheters.
"Our main competitors are Indian, Chinese and Egyptian devices, which are much cheaper, as the price difference ranges from 35-50 percent," said Will Wu, a sales representative with Bioteque Corp. of Taipei, Taiwan. The company plans to open a sales office in India, Wu said.
Taichung, Taiwan-based Great Group Medical Co. Ltd., a maker of respiratory-care devices, is looking for big-volume business in India. It also plans to open a sales office in India, according to Managing Director Kevin Hung.
"We have been supplying the Indian market for the last five years, but we feel that [our sales] have performed below expectations. Now we are scouting for an Indian partner with wider reach," Hung said.
Taizhou Kangjian Medical Equipment Co. Ltd. of Taizhou, China, showcased gynecological specula. "In India, a metal version is widely used, but we have made it in plastic and are promoting in India," said export manager Andy Cheng. The company has supplied the product in small quantities and now is looking to market it in India in a big way.
"It is disposable and much cheaper than the metal one," Cheng said. "India could be a big market for this product."
The Indian health-care sector should generate revenues of $155 billion by 2017, according to a research report by Kolkata, India-based investment bank LSI Financial Services Pvt. Ltd. The report points out that health care is becoming a favorite sector among investors, following technology and real estate. During the first half of fiscal 2012, private equity investments in the sector more than doubled to $754 million across 33 deals, against $320 million from 26 deals in the same period of the previous year.
Some major deals of 2012 included $110 million invested by Advent International Corp. into Quality Care Hospitals, $100 million invested by the government of Singapore in Vasan Healthcare; and $98 million by Olympus Capital Holdings Asia in DM Healthcare.
The Indo-German Chamber of Commerce said India's health-care sector is one of the fastest-growing and accounts for 6 percent of the country's gross national product. In the field of medical-device technology, India is considered the most promising growth market.
The report said mergers and acquisitions also will gain speed in the health-care sector. In recent years, the sector has seen several major acquisitions, including the $4.54 billion acquisition of Ranbaxy Laboratories Ltd. by Japan's Daiichi Sankyo Co. Ltd., the $3.72 billion acquisition of Piramal Healthcare Solutions by Abbott, and Fortis Asia Healthcare Pte. Ltd.'s $665 million acquisition of Fortis Healthcare International.
Medical Fair India was organized by Messe Düsseldorf GmbH and its Indian arm, Messe Düsseldorf India Pvt. Ltd. of New Delhi.