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Avail Breaks Ground on China Facility

Originally Published MDDI March 2005 Outsourcing News  

Originally Published MDDI March 2005

Outsourcing News

Sherrie Conroy

The global device market will continue to grow exponentially, according to Daniel Kunst, executive VP of sales at Avail.

Avail Medical Products (Fort Worth, TX) has begun construction of a manufacturing facility in Shenzhen, China. The facility, which is scheduled to open in September 2005, will be a wholly owned subsidiary of the company. Avail will manufacture finished single-use medical devices at the 30,000-sq-ft plant.

“Sterile finished goods—where everything is handled by companies like Avail—is the fastest-growing area of outsourcing. OEMs understand that it's more cost-effective to outsource finished goods, giving all responsibility to the outsourcer,” said Daniel J. Kunst, executive vice president of sales and marketing. Kunst made the

announcement at the MD&M West conference and exhibition on January 10, 2005. “The global medical device business is expected to grow at a compound average rate of 7% through the end of the decade, with the finished goods outsource segment growing at more that twice that rate,” said Kunst.

“Our customers expect not only manufacturing, but also quality systems and supply-chain management in all of our facilities,” he added. “The plant is a wholly owned American plant on Chinese soil.”

The device industry's continued growth requires that outsourcers offer multiple alternatives in terms of capabilities, locations, continuous improvement process programs, and low-cost opportunities, he said.

The company began construction with the support of its customers. “It is part of our long-term plan that was forged with our OEM partners,” said Kunst. “It is a different outsourcing solution: it's our management, our quality system, and our supply chain.” He explained that OEMs are more comfortable using such a facility in China.

The plant in China will have the same quality system and continuous improvement processes that the company has in its other facilities, Kunst said, noting that this is different from most finished medical manufacturing facilities based in China. Kunst said the plant offers its customers a regional manufacturing option for devices to be marketed in Asia. The location of the facility was chosen because of its proximity to Hong Kong, which has a large container port.

The decision to open a facility now was driven by the rising costs of labor, particularly for devices being marketed in Asia, he says. “Asia is a growth market for medical OEMs, and they need manufacturing capabilities in that market.”

Copyright ©2005 Medical Device & Diagnostic Industry

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