Medical Device MNCs’ investment, expansion and cooperation in China
While some multinational healthcare companies are currently downsizing their China operations in the face of rising geopolitical risks, declining reimbursement prices and economic uncertainty, some others are also expanding their operations and businesses in China.?
The fundamentals of the medical device market in China have not changed. China's fast growing healthcare sector, fueled by factors such as an aging population – aging faster than analysts had anticipated - and rising incomes – also rising faster than analysts had anticipated -?still offers lots of opportunities for multinational medical device companies with differentiated offers.??
In this article we highlight 3 multinational medical device companies that have renewed their interest and investments in the Chinese market in this year 2023.?
Elekta Established a Joint-venture with Sinopharm?
This year, Elekta, a leading precision radiation therapy developer, has entered into a joint venture with Sinopharm, a Shanghai-based healthcare company, to promote the adoption of radiation therapy in China. This initiative aims to extend radiation therapy to lower-tier cities, which account for approximately 70% of China's population. Elekta, with its advanced tools and treatment planning systems for radiotherapy, radiosurgery, and brachytherapy, is committed to providing comprehensive cancer care solutions. Sinopharm, being the second-largest pharmaceutical business in the world, brings comprehensive healthcare coverage, including pharmaceuticals and logistics, to the partnership. The collaboration between Elekta and Sinopharm is expected to improve access to radiation therapy across more than 1,000 medical institutions, focusing on small cities within Sinopharm's service network.?
?Elekta CEO Gustaf Salford expressed confidence in the collaboration, stating, "By leveraging Sinopharm's platform and service network with Elekta's advanced radiation therapy technology and deep expertise, I am confident that we can collectively bring hope to everyone dealing with cancer." This joint venture aims to help China meet the International Atomic Energy Agency's recommendations of having four radiotherapy units per million people, with a minimum of 1.5 units per million.?
Elos Medtech Expands Production Facilities in China?
Elos Medtech AB, a company specializing in medical products and medical technology solutions, is also recognizing the potential of the Chinese market and has renewed their interest and investment into their China business.?
?Between this year 2023 and next year 2024, Elos Medtech is investing approximately RMB 50 million in production equipment to meet the increasing demand of the Chinese medical device market. This investment will involve the implementation of advanced automated machines and production processes, solidifying the company's position as a leading global CDMO and enabling it to cater to the evolving needs of its customers worldwide.?
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?Amid the COVID-19 pandemic, the demand for medical devices in China, particularly for diagnostic equipment, respiratory devices, and personal protective equipment, has surged. This surge in demand has created a favorable landscape with numerous opportunities for industry players like Elos Medtech. As a trusted Contract Development and Manufacturing Organization (CDMO), Elos Medtech has observed a growing demand for its development and manufacturing services. In response, the company has announced a new agreement with one of its long-term customers, a prominent global healthcare company. This agreement includes a commitment to expand production capacity at its Tianjin site.?
Siemens Continues Investment in China market?
In 2023, German industrial giant Siemens has allocated EUR 140 million for the expansion in southwest China's Sichuan Province. Siemens holds an important position in China by offering high-quality medical platforms and operating systems.??
?Siemens aims to enhance its digital factory located in Chengdu, the capital city of Sichuan Province, which will result in the creation of 400 new job opportunities. This expansion aligns with the company's strategy of capitalizing on local growth opportunities in China for China. Although Siemens did not disclose the sales figures of its core Digital Industries division in China, it is estimated to exceed 2 billion euros and is projected to double by 2025, according to German newspaper Handelsblatt. Siemens highlighted that many of its Chinese customers are early adopters of new technologies, particularly in the areas of digitization and high-tech manufacturing.?
?In addition to the expansion in Sichuan Province, Siemens plans to invest in a new digital research and development (R&D) innovation center in Shenzhen, located in south China's Guangdong Province. This center aims to accelerate the development of motion control systems using digitization and power electronics technology.?
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