A group of Hong Kong firms, including some large plastics processors, want to see the region become a hot spot for medical-device manufacturing, and one of their leaders is suggesting they step up efforts to achieve that goal.
Hong Kong manufacturers, which built their businesses partly by leveraging the low cost of mainland China, have been stung by rising costs in those Chinese factories and by the collapse of their traditional export markets into Europe and North America.
Now some firms want to expand into the potentially more lucrative global arena of medical devices, by combining their strength in making consumer electronics and other products for Western markets with Hong Kong's solid base of university biomedical engineering programs and clinical research.
John Chai, chairman of the Hong Kong Medical and Healthcare Device Industries Association, said Hong Kong firms would benefit from a program coordinating that type of activity. Such a program also could help educate companies about regulatory requirements, said the group's vice chairman, Albert Lee.
“We need someone, probably from the government, not leading itself but organizing all these elements to be put together,” said Chai, an executive at plastic molder and measurement equipment maker Fook Tin Technologies Ltd. He said the Hong Kong Innovation and Technology Commission, for example, could play a stronger role in supporting the region's medical manufacturing industry, which he characterized as still “in its infancy.”
Nonetheless, Hong Kong exports of medical equipment and health-care products have grown 50 percent since 2004, to US$4.2 billion last year, Chai said Nov. 4 at the Hong Kong International Medical Devices and Supplies Fair.
Despite Hong Kong's long history of exporting electronics and toys to North America, Europe and Japan, those same countries could question whether China is a safe place to make world-standard health-care products, said David Wong, business development president of Hong Kong-based injection molder Mediconcepts Ltd.
Mediconcepts has worked with doctors to produce minimally invasive surgical tools like tissue-removal bags and laparoscopic devices at its Shenzhen, China, factory. The firm sometimes faces skepticism when it pitches China as a manufacturing location to U.S. firms worried about risks, Wong said.
Still, Hong Kong plastics firms with medical business claim the sector generally has weathered the economic downturn better than others.
Export sales at Vincent Medical Mfg. Co. Ltd., which makes respiratory-care products using injection, blow molding and extrusion in Dongguan, are down somewhat. However, its sales into mainland China are “growing exponentially,” said marketing manager Calvin Koh.
China announced plans earlier this year to spend 850 billion yuan (US$125 billion) to expand health-care access, prompting firms such as Vincent Medical to look more closely at the domestic market. Koh said the firm also is trying to do more of its own product development. It's hard to make a profit making products for other firms, especially as China's manufacturing costs have risen, he said.
Although a Chinese manufacturing base gives Hong Kong firms the potential to lower costs for international medical-device customers, they also face competition from their mainland counterparts, which may be able to make the products even more cheaply.
One of those potential mainland competitors, Ningbo Advan Electrical Co. Ltd., said its sales have doubled in the past year, driven by export growth of its injection molded surgical skin staplers into the U.S. and Europe. The Ningbo-based company, which exhibited at the Hong Kong medical supplies fair, has a niche product that cannot be easily copied by local competitors, according to Vivian Liu, export sales manager.
Lee, CEO of Hong Kong-based Providence Enterprise Ltd., said his firm entered the health-care field almost by accident 10 years ago. Now that market accounts for about 25 percent of the injection molder's US$100 million in annual sales.
When Providence discovered that the motors and precision plastic gears it was supplying for soft drink dispensers also were being used in dental equipment, the firm saw an opportunity and began expanding slowly into medical, Lee said.
Today Providence, with 180 injection presses in several Chinese factories, makes complete devices like nebulizers for dispending spray asthma medication, and its plastic gears and motors go into some of the most heavily regulated devices in the United States, such as hemodialysis machines.
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