HONG KONG (May 14, 3:30 p.m. ET) — Small Hong Kong medical molder MediConcepts Ltd. is investing in new capacity to meet growth that is coming, it said, from North American and European companies shifting medical-device manufacturing to China as a way to cut costs.
The company, which has its factory in Shenzhen, also hopes a new business venture it has launched — to manufacture its own brand of surgical instruments in partnership with a United Kingdom medical-device developer — will take off.
MediConcepts is investing about US$800,000 in additional injection molding capacity and a clean room expansion in Shenzhen. It's currently adding two 350-ton Arburg presses and another 5,000 square feet of clean room manufacturing space, on top of the five injection presses and 4,000 square feet of clean room space it has now.
It's not a big expansion by the standards of Chinese factories, but David Wong, business development president, said the company is seeing orders pick up from Western medical-device firms under cost pressures and taking a harder look at Chinese manufacturing.
“This year the acceptance of China is more,” Wong said in an interview at the Hong Kong International Medical Devices and Supplies Fair, held May 7-9.
“Because of the economic pressure, and because of the acceptance of medical-device manufacturing in China, we are getting a lot of discussion, and discussions are more frequent,” he said, noting that the company has exhibited at medical-device trade shows in the U.S. and Europe for several years. “I think we are seeing the real fruits of our labor.”
The company manufactures high-precision medical components, including the handle for a device used to plicate the stomach during surgery, laparoscopic scissors and support structures for medical implants, all for Western device companies.
Wong said the stomach plicator is made by USGI Medical Inc., a San Clemente, Calif.-firm that develops devices for incisionless surgery via the body's natural orifices.
Using the plicator, a surgeon inserts a camera and other equipment through the mouth, guides it to the stomach, and then in effect sews one or more folds into the stomach to make it smaller and reduce the patient's appetite.
MediConcepts makes the handle, which Wong said is difficult to manufacture because it has to control very precise operations. It's made from engineering plastic materials from Saudi Basic Industries Corp., with more than 10 components that fit together without glue or screws, Wong said.
Work on that device also led MediConcepts to its partnership with United Kingdom device entrepreneur Stuart Moran, to launch their own branded surgical instruments.
Moran had been working for USGI, and was a founder and joint managing director of Leeds, England-based Surgical Innovations Group plc, which makes devices used in minimally invasive surgery.
But Moran left USGI, and he and MediConcepts have now formed a Hong Kong-based joint venture, Nex Medical Ltd., to make disposable surgical instruments like trocars.
Wong, who is also CEO of Nex Medical, said its trocars are targeted at more-basic surgery applications.
It believes it can find a market niche offering good-quality but less-expensive devices than the trocar systems made by established, globally recognized brands, Wong said.
Moran and MediConcepts are also working on another medical device for “retracting,” or holding back, the liver during surgery so that doctors can access other organs.
That project, done through another company they have created called Retraction Ltd., received a loan from Hong Kong's Small Enterprise Research Assistance Program to support innovative businesses, MediConcepts said.
Moran said he has relocated to Hong Kong, and believes the city is a good place for medical-device product development, combining solid engineering skills and familiarity with Western markets with good access to lower-cost manufacturing in the Chinese mainland.
He has a long background in device development. In 2004, he was one of four winners of the Royal Academy of Engineering's silver medal for his work in medical devices. And In 1999, SI Group won a gold award from Croydon, England-based Plastics & Rubber Weekly magazine, a sister magazine to Plastics News, for one of its devices.
MediConcepts founder Benjamin Chan said at the Hong Kong fair that he thinks partnerships with developers like Moran are a good way for the company to start manufacturing its own products in global medical markets.
“We want to speed up our own branded products so in two years' time [that] business will take up the same amount of business” as manufacturing for OEMs, he said.
MediConcepts is a subsidiary of the Yu Hing Mfg. Co., a Hong Kong-based injection molder of watch straps, which has about 700 employees at its factory in Shenzhen. MediConcepts employs about 65 in Hong Kong and mainland China.