REGIONAL FOCUS
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It almost sounds too pat to be true. In the early 1960s, former pharmaceuticals representative Mario Veronesi sensed that a market opportunity was emerging for disposable sterile products. To replace rubber infusion tubing that had to be sterilized prior to use, Veronesi began tinkering with plastic infusion tubing in his garage. By 1964 he had opened his first factory, Sterilplast, and Mirandola’s biomedical die was cast. Over the years, Biomedical Valley, as it has come to be called, has attracted major device manufacturers such as Dideco, Gambro, Fresenius, and B. Braun. They spawned a dynamic network of local suppliers, primarily focused on the extrusion, moulding, and assembly of disposables. The consistent growth that the sector experienced through the 1990s, however, has begun to flag as low-wage countries compete for business.
Every three years, biomedical industry analysts under the auspices of the Biomedical Observatory in Mirandola issue a report on the state of the biomedical industry in the Modena region. The most recent report, which was published in 2004, showed a modest decline in the number of disposables manufactured in the region as a percentage of total output of medical products. The share of electromedical equipment, on the other hand, rose from 13.2% of total output in 1997 to 19.1% in 2003. That is one indication of what industry needs to do to weather this storm, says Luciano Fecondini, director of Medica Group (Medolla, MO) and president of industry consortium Consobiomed.
“Competition is coming from China, of course, but also from India and Egypt,” says Fecondini. This is not going to go away, and one way that local industry can react is by diversifying. The rise in output of electromedical equipment is an indication that this process is already well under way, he notes.
Creating value by developing sophisticated medical equipment is another way in which companies, like Medica, are building for the future. “We have invested in sophisticated equipment, such as a chemotherapy system that directly targets the tumour and rapidly removes the chemicals.” The company’s traditional forte has been in the haemodialysis and filtration fields, but, says Fecondini, “we have no choice but to take the technology to a higher level if we want to maintain the stature of our biomedical industry.”
It’s undeniable that Chinese manufacturers are getting business that used to come to the Modenese manufacturing hub, concurs Alessio Caleffi Garutti, sales manager at Aries Biomedical Devices (Mirandola, MO), “but it’s not as big a problem as some people think. You just have to know what to do.” Garutti agrees with Fecondini that a renewed commitment to product development is the way forward.
“When Aries started out making infusion pumps, we went directly to the hospitals and clinicians to find out what their problems were with existing devices. Then we found ways to solve them,” says Garutti. “Developing new technologies and improving existing devices, and not simply manufacturing me-too products, is the way to stay competitive.”
Haemodialysis in Regression
Haemodialysis has been a key application area for manufacturers in and around Mirandola. Italy’s first artificial kidney was produced there, and that landmark achievement continues to set the tone.
About 45% of all medical products made in the region involve haemodialysis. But its traditional role as a driver of the local economy is in slow decline. In the Biomedical Observatory report, industry analysts note that “half of the companies [established between 2000 and 2003] in the district manufacture products destined to new sectors of use. Although their current production volumes are low, it is hoped that they may grow in the future.”
Although the Mirandola district’s traditional industries are facing stiff competition, it would be premature to count them out. Even for the production of seemingly simple products, lean companies in Mirandola may still be able to compete with Chinese firms. Sergio Innocente, international marketing and sales manager at BioService Medical Devices, cites the case of urine bags.
“China exports a lot of them to the European Union,” says Innocente. “But EU distributors have to take into account the quality of the products. The companies need to prove themselves over time,” he says, and show that they can consistently supply products that meet strict quality requirements. “So far,” he adds, “we have not lost any business.”
BioService Medical Devices designs and manufactures critical-care products, biopsy needles, and orthopaedic devices. Providing in-house moulding and extrusion services, the company supplies disposable medical devices for use in urology, general surgery, anaesthesia, intensive care, and respiratory care under its own name and for private-label use.
The accompanying section profiles numerous suppliers operating in the Biomedical Valley, as well as companies located farther afield near Milan or Genoa. These companies offer a breadth of products and services from microextruders to single-use components for IV devices. What they share, however, is a history of meeting stringent quality requirements and exacting specifications at a competitive price.
