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November 18, 2009

Indian Medical Devices Cos making a mark

Economic Times has an article on how Indian medical devices companies have started to make a mark on the global market.
The US produces half of the world's medical devices and consumes approximately 40 % of the world's output. Indian manufacturers have leveraged their cost advantage to offer world-class quality at affordable prices. Opto, for instance, makes most of its monitors and sensors at its Indian facilities in Bangalore, Vizag, Chennai and Himachal Pradesh where production costs are lower. It also pays zero taxes due to its EOU status.

Imports of medical equipment and supplies by India were valued at around $12 billion in 2007. “This can be significantly reduced when domestic products are used,” says Puri, whose company plans to make Rs 150 crore by next year.

However, at present, most of them are looking to capture the lucrative markets in western Europe and the US...Here, Indian companies took the inorganic route. Opto acquired EuroCor, a company with proprietary technology, manufacturing facilities and distribution network for 11 million euros in December 2005, which now has the coveted CE (Communit√© European) mark. The company then bought US-based maker and distributor of patient monitoring devices, Criticare Systems, for $70 million in 2008. “This way, you are not spending time developing a product and going through numerous trials. You get the approvals as the target company had done the hard part,” says S Srinivasan, professor at IIIT Bangalore, who’s working on medical and IT technologies.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in