HONG KONG (May 14, 2:30 p.m. ET) — Hong Kong-based plastics processor Vincent Medical Mfg. Co. Ltd. is building a new factory this year to target the growing mainland China medical market, in part as a hedge against uncertainty in its traditional export business.
Vincent, which is a subsidiary of personal-care and home-appliance molder and contract manufacturer Vincent Raya Group, plans to open the 125,000-square-foot medical-device factory in June at its campus in Dongguan.
Business is stable with its overseas customers, which include firms among the 10 largest global medical-device companies, executives said. But the economic ups and downs in Europe and the U.S. are causing the firm to put more emphasis on local health-care markets.
“We see the fluctuation, so that is why we are focused more on the domestic Chinese market,” said marketing manager Calvin Koh at the Hong Kong International Medical Devices and Supplies Fair, held May 7-9.
There is “dramatic” growth in mainland China demand, Koh said: “The [Chinese] market is looking for more advanced products. There are more and more wealthy people willing to pay more for better medical care.”
The caveat, though, is that more small manufacturers in China are trying to get into the medical market as they seek refuge from manufacturing overcapacity in other markets, he said.
That increases the competition and requires manufacturers to deliver a good product at “very competitive prices,” he said.
Vincent Medical has a sizable Class 100,000 clean room at its medical-manufacturing facility in Dongguan, with 35 Taiwanese, German and Japanese injection presses, four blowing molding machines and seven extrusion lines, along with assembly and a range of secondary functions.
In the expansion, which will include 75,000 square feet of additional manufacturing space, it will add one extrusion line and more capacity for secondary operations. Koh declined to disclose the amount of money invested.
Vincent Medical focuses on disposable plastic respiratory products like ventilation circuits, tubing systems and filters, along with smaller electronic devices for hospital environments.
In 2009, it said, it became the first Hong Kong manufacturer to receive ISO 14971 certification, for risk management in medical-device manufacturing.
In addition to targeting the Chinese market, the firm is developing more of its own branded medical devices, including a humidifier used in intensive-care units to keep patients who are hooked up to ventilation devices from becoming too dry.
Koh said the company wants to do more work making its own branded products, although most of the company's medical revenues still come from manufacturing for other firms, the traditional business model for Hong Kong manufacturers. It markets its own products under the Inspired Medical brand name.
“You need your own brand and your own technology,” said Koh. “The whole industry is changing, to more and more high-value-added products.”
The upgrade also will focus on automation, to combat wages that have been rising 20 percent a year for Dongguan factory workers. The firm last year also added its second sterilization unit.
