Taiwan's medical supplies industry to see 25% output growth in 2005

Taipei, Feb. 14, 2005 (CENS)--The production value of Taiwan's medical equipment industry is expected to grow by 25% in 2005, much higher than the global average growth of 5%, according to Chairman George Lee of Taiwan Medical And Biotech Industry Association (TMBIA).

The annual output value of the local industry has outstripped NT$40 billion (US$1.25 billion at US$1: NT$39) in recent years.

Lee, who is also chairman of Pacific Hospital Supply Co., Ltd., said that his company has successfully developed several new customers and is expected to enjoy an annual revenue growth of over 20% this year.

According to Lee, the long-term prospects for the local medical equipment industry are quite bright due to the growing demands for medical services and increasing aged population worldwide.

Basically, Lee pointed out, the medical device market can be divided into three sectors according to market scales and product prices. The top-end sector, relatively small in scale, is dominated by big international brands. In the low-end segment, both product prices sand technical thresholds are low, yet with fierce price competition.

Taiwan makers are concentrating mainly on the medium-end sector, with their technical levels rivaling those of advanced countries, in addition to high price competitiveness, strong R&D capability, and sufficient support from the island's high-tech industries. "Made in Taiwan" medical devices are the biggest winners in the middle-end traditional medical-device segment," Lee added.

This year, the strongest growth momentums are expected to come from several product categories, including blood-pressure gauges, ear thermometers, surgery gloves, catheters, and home-care products such as air-cushion medical beds and electric home-care beds.

Pacific is a major supplier of urine bags, catheters, and tubes, which account for about 70% of the company's revenue. The company scored pretax earnings of NT$82 million (US$2.57 million) in the first 11 months last year, translating into earnings per share (EPS) of about NT$3 (US$0.09), the best performance since the company's listing on Taiwan's over-the-counter securities market.

According to Lee, international material prices began rising in the second half of 2003 and the prices of some key materials, including PVC, have shot up 40%. Pacific was forced to raise the prices of some products, and develop new items and boost self-production ratio.

Besides striving to win more OEM orders from big medical device brands in Europe and the U.S., Pacific is also actively trying to upgrade its own-brand sales in mainland China and other developing nations.