Medical Equipment Makers Consolidate Contract Supply Foothold

Leading makers of medical equipment in Taiwan are reporting that a recent surge in orders is being sustained because of the improving global economy, the aging of societies worldwide, and an increasing number of chronically ill patients.

Rossmax International Ltd., the world's fourth-largest manufacturer of blood-pressure monitoring systems, says that it has succeeded in tapping the American and European markets with its wrist- and arm-type blood-pressure monitoring devices. It is taking orders from such chains as Tchibo and Aldi South in Europe, and Wal-Mart and Kmart in the U.S.

Yeah Jian-ho, the company's chairman, indicates that Rossmax will introduce several new models next year and will set up a subsidiary in Italy to market its own-brand products. The company has finalized orders for 50,000 blood-pressure monitoring systems in mainland China, and expects sales in that growing market to reach 70,000 units in 2004.

The chairman notes that his firm uses different marketing strategies in different markets. In Europe it supplies products primarily on an original equipment/design manufacturing (OEM/ODM) basis to such major home-healthcare distributors as 4MBO, Cabem, and IPB. In the U.S., sales are made mainly to big international brands.

Yeah expects his firm's revenues to reach NT$680 million (US$20 million at US$1=NT$34) on sales of 760,000 blood-pressure monitoring devices this year and soar to NT$1 billion (US$29 million) on sales of two million units in 2004.

After gaining a solid foothold in the international electronic thermometer market, Microlife Corp., the world's No. 1 maker of electronic thermometers and No. 3 supplier of ear thermometers, plans to tap the U.S. market next year with its new electronic blood-pressure meters.

The company forecasts revenues of about NT$2.25 billion (US$66 million) this year, with further growth of 20% in 2004 due to its new products. The products have won the necessary certification in Japan, and exports to that market will soon begin on a contract-production basis.

In the European market, sales are split about evenly between contract-production and own-brand supply. More contract-production orders are expected from that market.

The company's chairman says that Microlife will introduce four or five new products in the second quarter of next year in a bid to develop its contract-production business more vigorously. If the firm continues with its competitive triumvirate of solid product quality, on-time delivery, and reasonable prices, he believes, the orders will keep flowing in.

Microlife expects to ship about 260,000 arm-type blood-pressure meters and 1.2 million wrist-type units this year, establishing a new sales record for the firm. It projects shipments of over two million meters in 2004.

Apex Biotechnology Corp., a major supplier of glucose and uric-acid monitoring devices, announced recently that its contract production for Bayer has expanded three-fold over the past two months, and that the two companies have reached an agreement covering the supply of a second-generation glucose-testing device in 2004. Other products under development include self-monitoring systems for cholesterol, lactate, and hemoglobin.

The company will double its production capacity in the middle of next year, and expects to boost its revenue in the second half of the year by 50%. However, its chairman, Shen Jen-shih, worries that excessive competition among the 16 medical-equipment contract manufacturers in Taiwan, who operate on a small scale compared to the international heavyweights, may lead to price-slashing and finally to deteriorating product quality.

Shen says that his company has been in constant cooperative contact with Bayer over the past two years, and that the German company has sent more than 300 officials to handle product certification.

Apex will continue with its concentration on product development by spending more than 10% of its annual revenue on R&D in 2004.

Major Taiwan Diagnostic Product Makers
Company	Major Products	Major Customers	Global Rank
Microlife	Electronic thermometers, ear thermometers		No. 1 maker of electronic thermometers andNo. 3 maker of ear thermometers
Apex	Glucose monitoring/testing products	Hypoguard, Medline, Bayer, IMACO, etc.
Rossmax	Electronic blood-pressure monitor systems	4MBO, Artsna, Wal-Mart, etc.	No. 4 electronic blood-pressure monitoring-systemmaker

Source: The companies