THE growing global medical-grade silicone rubber market is providing fresh opportunities for rubber medical component manufacturers to expand.
Silcotech Industry Sdn Bhd, a rubber component producer based in Sungai Petani, Kedah, is one of the companies looking to leverage this surge in demand.
“Three years ago, we ventured into the production of rubber medical parts, a diversification from our core business which was supplying silicone components to the consumer electronics industry.
“Silcotech’s rubber components for the consumer electronics industry are sold to Australia, the UK, Holland, Vietnam, the US and Japan.
“Since diversifying into the medical sector, we have grown at 20% to 25% annually, ” shares managing director Yeoh Lik Jin.
Yeoh notes that the company’s earlier investment is starting to bear fruit as the added capacity will put it in a good position to ride the waves of the growing market. Plans are also afoot to continue expanding its capabilities.
“A couple of years ago, we invested in a new RM8mil facility, located next to the present plant, which started operations at the end of December.
“In southern Thailand, we have purchased a site for expansion in 2022.
“Both these plants will be focused on making rubber medical parts such as tubings for laryngeal masks, valves for IV catheters, and urinary catheter balloons, ” says Yeoh.
The new plant in Sungai Petani has the capacity to produce 40 million pieces of rubber medical components.
Meanwhile, the plant in Thailand, where they plan to invest some RM4mil in, will have the capacity to produce 80 million pieces of rubber medical components.
Yeoh says both the plants will have clean rooms specifically designed for the production of medical components.
Growing demand for urinary catheters will keep the new plant in Sungai Petani busy and help boost the company’s revenue growth by 60% in 2021 from RM15mil last year.
“The urinary catheter market, known also as Foley catheters, was valued at US$37.3bil (RM150.58bil) in 2018 and is expected to witness a compounded annual growth rate (CAGR) of 9.7% over the 2019-2026 period.
“Rising prevalence of chronic disorders leading to hospitalisation has fueled the growth of this market. The presence of multinational manufacturers, improving medical facilities and supportive insurance policies are also some of the key factors propelling the market.
“Based on customers’ demand and forecast, we should be able to capture about 10% to 12% of the global urinary catheters market share, ” he adds.
Silcotech imports silicone from Germany and Japan to make the balloons for the urinary catheters.
The company is also exploring options to venture into the production of other rubber medical components used in products such as disposables, surgical instruments, implants and prosthetics.
“The global medical grade silicone rubber market is expected to grow at a CAGR of 6.3% from 2020 to 2027.
“According to the US Centers for Medicare and Medicaid Services, healthcare spending in the country is projected to see a growth rate of 5.7% from 2020 to 2027 and reach about US$6 trillion by 2027.
“Healthcare spending is anticipated to account for approximately 19.4% share of the nation’s gross domestic product by 2027, up from 17.9% in 2017. The US is a big market for us, ” Yeoh says.
Silcotech currently produces 80 million to 90 million pieces of rubber components annually for the consumer goods and medical sectors.
“Currently, the medical device business contributes about 30% of our revenue. In two years, we expect to see the medical device segment generating close to 50% of the revenue.
“We spend about 15% of our profit on design and development activities to produce new products, ” he adds.
The company is looking into new markets like Thailand, Indonesia, India and China for its rubber medical component products.
Currently, about 80% of Silcotech‘s rubber medical components are sold to multinational corporations in the country, and the remaining 20% to the Netherlands.
“The market in Asia Pacific is likely to expand at a rapid pace in the next few years. The increase in the number of baby boomers with urologic diseases requiring long-term care in countries such as India and China is expected to provide lucrative opportunities to the market in the near future.
“Moreover, an increase in focus of leading players on these emerging countries is another major factor propelling the Foley catheters market in Asia Pacific, ” Yeoh says.
Did you find this article insightful?