Medical-device manufacturer Merit Medical System Inc. will invest $1 million during the next 12-18 months at a plant in Chester, Va., that assembles surgical packs for hospital procedures.
The majority of the investment will be for additional machinery and the expansion, but plans also are being drawn up to possibly expand the 100,000-square-foot plant, if anticipated growth materializes, said Greg Fredde, vice president for business development and government affairs for the South Jordan, Utah, company.
We have enough capacity to meet customer needs in the short-term, Fredde said in a Nov. 23 phone interview. But we may need to convert existing space to a controlled clean room or make an addition on one side of the building. It really depends on what kind of growth we see.
The project is in the preliminary stages, said Fredde. The other wild card is the possible establishment of an East Coat distribution center. That is also something we will look at over that same period of 12-18 months. But if demand takes off ahead of that, we will look to expand in a shorter period of time, he said.
Merit purchased the plant in 2004 and invested several million dollars to reconfigure it into its present use. The expansion will increase the size of the workforce from 105 people to 180 during the next 18 months, Fredde said.
Most of the packs assembled at the plant are used in interventional cardiology and radiology procedures, Fredde said. It is largely an assembly operation that takes different components and assembles them into surgical packs that contain everything a physician needs from gloves to surgical tools for a procedure.
Fredde said the company recently added 20 sales people in the U.S. and is optimistic about growth.
But he cautioned that the looming 2.3 percent tax on medical devices scheduled to go into effect in the United States in 2013 could impede growth for the industry. Likewise, failure to reinstate the federal research and development tax credit which expired at the end of 2009 could have a similar effect.
Obviously medical-device companies are facing a number of challenges, Fredde said. The things happening at the federal level will have a definite impact on our ability to grow. The 2.3 percent medical-device tax will be a challenge in terms of maintaining our growth.
Merit employs 2,170 with four plants in the U.S. and five others globally in France, Ireland, China, Denmark and the Netherlands.
The company manufactures more than 2,000 devices cleared by the Food and Drug Administration, including complex disposable syringes used to inflate balloons or place stents that are attached to balloon angioplasty catheters; diagnostic, therapeutic and drainage catheters; and disposable angiography products such as custom kits, syringes and manifolds for fluid-path regulation.
In September, Merit closed on the largest acquisition in the company's history, purchasing Rockland, Mass.-based BioSphere Medical for $96 million. BioSphere makes embolotherapy products that use bioengineered microscopic spheres to deliver drugs into a patient's system and to block blood vessels that feed uterine fibroid and other tumors.