The medical device contract manufacturer says the purchase was driven by its customers desire to manufacture products closer to the emerging markets where they'll be sold.
Medical device makers are increasingly looking to global markets for growth, and contract manufacturer Phillips-Medisize is catering to that demand by expanding its operations around the world.
The Hudson, WI-based company announced in July an agreement to purchase medical technology manufacturing operations in China and Mexico from Adval Tech Group, which specializes in metal stamping and forming and plastic injection molding.
Phillips-Medisize president and CEO Matt Jennings says the acquisition was driven by existing customers’ desire to make products closer to the emerging markets where they’ll be sold. OEMs’ strategy is no longer to manufacture devices in China or Mexico for distribution in the United States and Europe, he says. Instead, they are making products in these countries for regional and local distribution.
“To line up with our global customers, who are manufacturing in Asia for Asia, Europe for Europe, and the Americas for the Americas, we need to have capabilities in each of those geographies,” Jennings says.
Phillips-Medisize was drawn to Adval Tech’s China and Mexico assets because they had “strong management, a medical focus, a strong engineering focus, and good facilities” to help the company scale up its drug-delivery business, Jennings says. The two plants will focus on devices including injector pens, inhalers, glucose meters, and consumable diagnostics.
The facility in the Querétaro state of Mexico will be Phillips-Medisize’s first in the country. Located in an industrial area northwest of Mexico City, the plant is close to the Universidad Autonoma de Querétaro, a university with an engineering program. The facility is ISO 9001 and ISO 13485 compliant and FDA-registered to manufacture components and subassemblies, drug-delivery systems, and other related medical devices.
The facility in Suzhou, China, east of Shanghai, is ISO 9001 and ISO 13485 compliant and certified by China’s State Food and Drug Administration to manufacture finished drug-delivery systems and related medical devices. Phillips-Medisize previously had a joint venture in China for tooling, but this will be its first plant manufacturing finished devices in the country.
The two facilities employ approximately 350 workers, and Jennings says the company plans to keep all of them onboard. “We expect to retain and to continue to grow those sites as we bring in new business for those sites from our existing customers,” he says.
The sites will also be supported by three newly hired engineers based in Phillips-Medisize’s Nürensdorf, Switzerland location.
“These three engineers come with experience in the design and industrialization of drug-delivery devices,” Jennings says. “They’ll be working with these new facilities, supporting them as a satellite design and development group for our drug-delivery program for China, Europe, and Mexico.”
The acquisition was pending regulatory approval as of press time, but Jennings says it should be finalized by mid-September. He would not comment on the price of the deal.
—Jamie Hartford, managing editor, MD+DI