Enterprise
Bringing Malaysian-made devices to the fore
Behonce Beh 
Customisation and quality assurance enables Malaysian manufacturers to compete abroad
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MANUFACTURING capabilities in the country extend across various industries. And in the disposable medical devices segment, our products are said to be on par with those of developed nations.

However, the presence of local products in the segment is still small as it is dominated by foreign imports.

Disposable medical devices intended for one-time or temporary use include tubing, syringes, hypodermic needles, suction catheters, speculum and hemodialysis membranes.

Foresight Industries Sdn Bhd executive director Aidi Roslan Abu Bakar says: “About 90% of disposable medical devices are imported. The trust is still on devices from multinationals.”

The company produces medical and surgical disposables ranging from procedural, transfusion and infusion sets, to tubing and catheters as well as haemodialysis consumables for bloodlines and arteriovenous fistulas.

“During the initial stage of our business, there was distrust for a local brand like ours despite the fact that we comply with international standards.

“We sent samples to be scrutinised by [Ministry of Health] technical committees, and once we established our quality and service, our products were accepted,” says Aidi.

That said, there is still room to grow by convincing the market to switch to locally made devices.

More often than not, many players tend to throw prices in order to compete. However, Comcorde Medical (M) Sdn Bhd managing director Wong Wan Kit believes those who deploy price war tactics are often unable to keep up with inflating operational costs.

Wong says made-in-Malaysia disposable medical devices cost more than those manufactured in India or China, but they are of high quality

 

Comcorde Medical is a broad-based disposable medical devices manufacturer with over 200 stock keeping units.

 

Cost versus quality

He says Malaysian products generally costs 20-30% more compared to China- or India-made disposable medical devices.

It is estimated that there are over 362 hospitals in the country with over 66% of them privately owned and managed.

However, the Health Ministry remains the largest healthcare provider as almost 75% of all hospital beds and 71% of total hospital admissions are in the public sector.

Medical devices are governed by the Medical Devices Authority under the Medical Devices Act 2012 (Act 737) which falls within the Health Ministry’s purview.

“The public sector is still the biggest contributor to our business, but our plans to specialise in the hemodialysis segment will strengthen our niche in the private sector,” says Aidi.

Foresight’s monthly turnover hovers between RM2 mil and RM2.5 mil. It plans to increase the figure to RM4 mil next year.

Wong says a single order from Hospital Kuala Lumpur for disposable medical devices can range anywhere between 200,000 and 300,000 pieces.

He believes it is important to have a capable marketing team to serve clients on an almost twice weekly basis.

“Our marketing team needs to know the products well and be able to demonstrate to doctors how to use them. When you see the customer, you train them and then throw the item away,” he says.

The disposable nature of the products ensures a fair repeat income for manufacturers, as clients would have to repurchase once they run out of a certain device.

Asked about challenges, Aidi laments that the ringgit’s depreciation has impacted margins as certain components and raw materials are imported.

“The sluggish economy puts pressure on our business through pricing. But people do not try to be stingy when it comes to medical and health spending. It is a volume game in this business,” he says.

Most of Foresight Industries’ spending is in marketing, research and development, and training.

 

Export market untapped

Despite enjoying fairly favourable returns domestically, Wong says the export market remains one that is largely untapped by local manufacturers.

“There is an annual exhibition in Germany called Medica where Malaysian companies showcase their products.

“Many of those who’ve been there share the same story that Malaysian-made disposable devices may cost more than those manufactured in India or China, but they are of high quality. And this is what makes the products widely sought after by foreign buyers,” he says.

About 15% of Comcorde’s business is from exports to Vietnam, Macau and Brunei.

“Our business is customer-based. We must be able to customise our solutions to meet the hospital’s or doctor’s requirements.

“That means our sales people have to engage clients closely and support their needs,” Wong says.

Such close working relationships with clients require Malaysian manufacturers to set up their own offices in respective export markets.

“We have to look at customisation and quality control. Only then we can stand a chance to penetrate foreign markets,” Wong says.

Owing to thin margins, automating the manufacturing process can lower operating costs.

Haemodialysers are commonly reused by the same patient. But the blood tubing that connects the machine to the body cannot be reused despite sterilisation, says Aidi

Aidi, whose company exports to Indonesia, concurs. He says while the business in that country remains lucrative, it can be saturated in major cities.

“We started exporting to Indonesia in 2014 but backtracked as the service provided by our local representatives there did not meet expectations.

“This time around, we are working with local government hospitals through a public and private initiative in Sumatra Barat,” he says.

Aidi says there are over 30 provinces in Indonesia, and markets beyond Jakarta have their own growth potential.

Asked about the impact of disposables on the environment, he says although it is possible to develop eco-friendly devices, the higher cost incurred by the end-user may deter the adoption of such products.

“A blood tubing for dialysis patients cost about RM7. If the material used is, for example, silicon or soluble plastic, the cost would be much higher,” he says.

Any cost increase will definitely be felt by those who use disposables on a regular basis such as dialysis patients who have to undergo about 156 dialysis treatments in a year.

 

Concerns over reusing disposables

In October, Malaysians were shocked upon reading reports quoting sources from the healthcare sector alleging that some government hospitals were reusing single-use devices owing to the lack of funds.

Health director-general Dr Noor Hisham Abdullah refuted the claims. He says all consumables and single-use medical devices for patients with blood-borne diseases were discarded after use.

“There are some single-use medical devices that are used more than once after it has undergone reprocessing via thorough cleansing and sterilisation processes.

“This has been long-practised in the country, and has no correlation with health financing or budget issues,” he says.

However, industry players pointed out that disposable medical devices that are reused are due to scarcity and higher price.

Foresight Industries Sdn Bhd executive director Aidi Roslan Abu Bakar says high-priced medical devices such as haemodialysers are commonly reused by the same patient.

Haemodialysers are used in dialysis treatments for blood filtration. But the blood tubing that connects the machine to the body cannot be reused despite sterilisation.



This article first appeared in Focus Malaysia Issue 260.