4. Contract Manufacturers Get Bigger

Chris Newmarker

August 30, 2016

1 Min Read
4. Contract Manufacturers Get Bigger

There may be a lull in the huge mega-mergers among medical device OEMs. But the contract manufacturers are still playing catchup as they merge and forge partnerships to stay competitive winning business from more streamlined supply chains.

Yes, the medtech contract manufacturing industry is facing some near-term turbulence, but the outlook is healthy in the future, according to a recent Standard & Poor's report. Even officials at publicly traded Integer Holdings Corp. (formerly Greatbatch Inc.), which has recently had performance below expectations, expect the situation to be temporary.

Said the report: "We believe this turbulence is a period of digestion following a wave of OEM consolidation and that inventory reduction initiatives are finite and likely to be complete soon. We expect (contract manufacturing) industry growth to resume the low- to mid-single-digit growth rate we expect for the medical device industry."

Officials at Lisle, IL-based Molex--which is part of Koch Industries--appear to agree with the assessment. They announced in August that they are buying a significant medical device contract manufacturer, Hudson, WI-based Phillips-Medisize

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[Image courtesy of Polydot on Pixabay]

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