Healthcare firms expand

GEORGE TOWN: The prospects of higher domestic market demand in 2010 for medical devices and services are prompting local and multinational corporations involved in the healthcare industry to expand.

According to the Association of Malaysian Medical Industries (AMMI), the consumption of medical devices in the country is expected to grow to US$877mil in 2010 from US$826mil this year.

“The figure is expected to hit US$956mil in 2011 and US$1.7bil in 2012.

“In Asia, the consumption of medical devices is expected to increase to US$42.8bil in 2010 from US$39bil in 2009. The figure is forecast to reach US$46.6bil in 2011 and US$50.5bil in 2012,” AMMI secretary Hitendra Joshi told StarBiz.

AMMI has 24 members involved in the medical devices manufacturing business, of which 15 are foreign companies, collectively generating about RM4bil a year.

Some 80% of the products manufactured by AMMI members are exported to the United States, Japan and Europe.

The compounded annual growth rate of foreign tourists to Malaysia seeking medical care grew 25.3% from 1998 to 2008, according to a recent Frost & Sullivan report.

In 2008, the number of medical tourists hovered around 375,000, according to data from the Association of Private Hospitals of Malaysia.

The Frost & Sullivan report showed that because of the economic recession, the growth rate for the medical tourist sector fell 15% this year from last year, and in 2010 some 519,000 medical tourists are expected to visit Malaysia.

It also said revenue per patient grew from US$92 in 1998 to US$241 in 2008, and by 2010, medical tourism revenue per patient is estimated to reach US$590.

B. Braun Medical Industries Sdn Bhd corporate communication head Yeong Lih Chyun said the outlook for the medical device business in the country was positive because of the recent government allocation of RM14.8bil to raise the quality of healthcare services, focusing on managing, building and upgrading of hospitals and clinics.

“The gradual improvement of the economic climate in the country, with an expected 2% gross domestic product growth, will also fuel private expenditure in healthcare,” Yeong added.

KPJ Healthcare Bhd, B. Braun and Symmetry Medical Malaysia are some of the companies investing this year to tap the growing medical devices and heathcare services opportunities in the country.

KPJ managing director Datin Paduka Siti Sa’diah Sheikh Bakir said the group was planning to set up a new hospital in Pahang and planned to inject about RM70mil in the newly-acquired Bandar Baru Klang Medical Centre.

“We have signed a joint-venture agreement with Pasdec Corp to set up a 180-bed hospital in Kuantan. We are targeting to open the Bandar Baru Klang Medical Centre by 2011.

“In Penang, we have invested RM70mil in the first phase, which has100 beds, of the new KPJ Penang Hospital in Bukit Mertajam, which started operations in August,” she said.

Siti Sa’diah said the total number of outpatients at KPJ hospitals in Malaysia rose to 984,599 in the first half of this year compared with 949,839 in the same period last year, while the number of inpatients increased to 103,989 from 93,553 previously.

“We now have more than 700 specialist consultants practising at the 19 KPJ hospitals throughout the country. More than two-thirds of the doctors are resident consultants,” she said.

For the nine months ended Sept 30, KPJ posted a net profit of RM73.5mil on revenue of RM1.07bil compared with RM63.2mil and RM944.8mil respectively in the previous corresponding period.

B. Braun is also investing about RM500mil to expand its research and development and manufacturing facilities at its plant in Bayan Lepas, Penang.

Chairman Datuk Dr Ludwig Georg Braun said in October that it planned to engage in nano-technology, information technology and digitalisation to improve its medical products such as needles, which could penetrate the skin easier.

“Not only will we be enlarging the present plant but there will also be additional jobs available in the future. We are looking for specialists in plastic moulding and metal treatment,” he was reported as saying.

US-based Symmetry Medical Inc, the world’s largest orthopaedic product outsourcing firm, also plans to spend more than RM30mil in its Penang facility over the next two to three years.

The group planned to invest in the design and development of medical devices for the endoscopy industry and increase its workforce from 70 now to 200 in the next 12 months, said president and chief executive officer Brian Moore.

Symmetry Medical has so far invested RM20mil in its Penang operations that it started two years ago.

Meanwhile, Fulijaya Manufacturing Sdn Bhd managing director Tan Soo Nam said local small and medium industries (SMIs) that wanted to tap into the medical product and services sector must be ready to invest in new packaging technologies and specially-designed clean room packaging facilities.

“Investment in such technologies and facilities, however, can be costly. So they need to draw the road map of their business carefully before making such investment.

“When the demand for medical devices increases, MNCs tend to call for open bidding for their contracts. SMIs, therefore, have to be very competitive in their production cost to get the contracts,” he said.

Fulijaya is a medical product packaging specialist based in Kulim, supplying its products to MNCs in the country.

However, fresh opportunities and expansion programmes in the medical devices sector are not sufficient enough to drive the country to attain the status of a top medical product manufacturing site.

“The Medical Device Act needs to be passed quickly to regulate the distributiion, import and manufacturing of medical devices if we want to be a world class medical device manufacturing destination,” Joshi said.

There was a need for more skilled and trained technicians and engineers, he said, adding: “Presently, there are about 570 professional managers and engineers out of 12,758 employees working in the companies of AMMI members.”

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