Jabil Circuit Inc. said it expects the 100,000-square-foot plant it is building at its giant manufacturing complex in Shenzhen, China, to be up and running in March, with at least 25 percent of its capacity dedicated to the single-use medical-device market.
The company also has opened an ISO 13485-certified, Class 100K clean room in its medical-design center in St. Petersburg, Fla., where it is headquartered.
We can be closer to the customers and develop prototypes quicker now, Gaet Tyranksi, business unit director for the health-care and life-sciences business, said in a Nov. 19 telephone interview. Before, we did all our medical prototyping in Asia. Now we have a place in the U.S. where we can meet easier with our customers, fix things quicker and accelerate time-to-market in a place that mirrors a full-production environment.
The new clean room will be able to do ultrasonic welding, ultraviolet-light curing, bag and blister sealing, laminar airflow and lamination on extruded tubing.
Jabil, which entered the medical-device business less than two years ago, is on track to reach $300 million to $500 million in sales from single-use devices by its five-year target in 2014, Tyranksi said.
We are engaged with three large customers in the U.S. and Europe, and developing products and manufacturing prototypes, and have additional projects in the pipeline that will help Jabil reach that target, he said.
Tyranski said those products will be manufactured in Asia, and he expects them to be brought to market in 2011 and 2012.
We have already cut the tools, are doing the prototypes and leveraging our Vienna, Austria, location for its electronics expertise, he said.
Tyranski did not disclose the specific products under development, but said Jabil is concentrating initially on drug-delivery devices, surgical tools, the diabetes market and laboratory and diagnostic disposables.
The initiative to become a major player in the single-use medical-device market is part of Jabil's strategy to become viewed as more than just an electronics contract manufacturer.
Two years ago, we were well-known as an ECM, but had a low reputation as a molder and medical-device maker, he said. But because more and more single-use devices contain more plastics and electronic content, we were able to leverage our electronics knowledge to bridge that gap.
The medical-disposables market Jabil is targeting is a $100 billion global market, but currently only 11 percent, or $11 billion, of that work is outsourced. But that's changing.
The amount of outsourcing is accelerating because of profit-margin pressures and an increasing shift to virtual manufacturing, Tyranski said. Large medical-devices companies are focusing on research and development, and sales and marketing. They are outsourcing manufacturing and not investing in the machines themselves.
Jabil anticipates that single-use medical devices will become an increasingly large part of the company's medical business, which was renamed the health-care and life-sciences business six months ago.
We felt that the new branding allows us to have a broader-based image and to resonate more as a health-care company, than when the business was called medical devices and instrumentation, Tyranski said. We want to be recognized as a leader in our space so that when people think of Jabil they think of us as a health-care and life-sciences company.
As part of that, he said, the Jabil unit is laser-focused on single-use medical devices and four other key areas: portable on-body products, patient bedside products, life-science equipment and what it calls big iron equipment such as MRI and other imaging machines.
Jabil also brought in 25-year industry veteran Alan Myers formerly of Baxter Healthcare, Cardinal Health and American Hospital as vice president of health care and life sciences six months ago.
Tyranski expects Jabil to add medical molding capabilities outside the U.S. in order to grow.
We have to add more to our global footprint to get to that targeted number for revenues, he said. Everything can't be built in Asia. We have to expand in different geographies.
He also said the company, because of its size and experience, is well-positioned to handle what the market now demands.
Many of the projects tend to be $100 million or more and companies want someone who can take a project all the way from design to manufacturing, to fully assembled and packaged devices, said Tyranski. The size and scope of these ongoing projects are large, and that matches our value proposition.
He said the company's financial position improved in its fiscal year, ended Aug. 31.
In the past year and a half, we have emerged as a strong company, said Tyranski. Our profits improved greatly and we had a 25 percent improvement in our core operating income. From a company standpoint, we are getting stronger, growing faster and leveraging our capacity.