Covidien sets up R&D centre
The 40,000-sft centre, its first in India, comes up in Hyderabad
US-based manufacturer of medical devices and supplies, diagnostic imaging agents and pharmaceuticals, Covidien, opened its first research and development (R&D) centre in India, and its 25th globally, at Hyderabad on Thursday.
The new India centre will tailor products to local market needs, increase speed-to-market, develop breakthrough platforms, besides taking advantage of the huge talent pool available in India to provide a range of engineering services for the company’s medical products business.
“The Indian healthcare devices market, currently pegged at $4 billion and growing at 15 per cent year-on-year, is a considerable part of our focus on emerging markets. The Hyderabad centre will enable us to improve product time to market and create valued-innovation,” Robert Frechette, vice-president (engineering services), told mediapersons here.
The 40,000-sft R&D centre, which the over $11.6-billion NYSE-listed company calls as the Covidien India Engineering Centre (CIEC), is up and running with over 30 engineers and staff involved in its global R&D efforts. It plans to employ up to 350 professional in the next two years.
Stating that the company had over 14,000 patents worldwide, with another 12,000 patent applications pending, Frechette said the idea to set up an R&D centre in India was primarily to support the company’s entire operations globally. Besides generating ideas from here, filing global patents from here was also on the cards, he said.
“We currently spend 5 per cent of our revenues on R&D, which we plan to increase to about 6 per cent starting this year,” he said, adding that the company had so far launched over 100 new products and expected to launch more than 50 products over the next two years.
Covidien, a listed company for the last four-and-a-half years, derives 68 per cent of its revenues from medical devices, 15 per cent from medical supplies and 17 per cent from pharmaceuticals. While the US contributes 55 per cent and Europe 24 per cent to its revenues, Asia-Pacific accounts for 15 per cent.
According to Arjun Sarker, managing director (India sub-continent), though Covidien’s global pharmaceutical business accounted for $2 billion in revenues, the company’s focus here in India was more on surgical solutions and medical devices, which were better sold in emerging markets.
On whether the company, which has manufacturing sites in 37 countries, has any plans to set up a production base in India, Sarker said, “I am not ruling out the possibilities. But, not at the moment.”