Exports to drive Gujarat medical device biz

Gujarat-based SME medical device-makers are gearing up for growth, as a number of initiatives in the sector start taking shape. For starters, the SMEs are looking to increase their share in exports, as the West European markets offer opportunities for polymer-based medical devices.

Around 20 companies have already taken possession of land at the upcoming medical devices cluster at Sanand, jointly developed by the Gujarat Industrial Development Corporation and National Institute of Pharmaceutical Education & Research. Around 40 companies had signed MoUs with the government to set up units in the 100-acre park.

Even more significantly, some 20 small-scale manufacturers have come together to form a special purpose vehicle (SPV) to set up a common component manufacturing facility near Ahmedabad.

The upcoming Vibrant Gujarat Global Investors’ Summit in January 2013 will also host an event on medical device technology where state-based medical device-makers are expected to meet overseas buyers. The SPV, called Ahmedabad Medical Disposable Devices, is scouting for land near Ahmedabad, said Mitesh Vyas, owner of Jimit Medico Surgicals, and a member of the group. The Rs 15-crore facility would supply components to all the member companies in the SPV, he added.

D L Pandya, advisor to the SPV and also programme coordinator of the National Biomedical Engineering Society, said, “The common component facility will certainly help to improve the quality of the products.”

A feasibility study for the project has been conducted by Gujarat Industrial and Technical Consultancy Organisation Limited (GITCO). The SPV has also applied for a subsidy from the Union ministry of commerce through the state industries commissioner.

“An in-principle nod from the Centre is expected soon. Under the Central scheme, 70 per cent of the total equipment cost is funded by the Centre in the form of a subsidy. This works out to roughly Rs 10 crore,” Vyas said.

State-based SMEs are working on improving product quality, as they gear up to tap the export market. There are around 200 medical device making companies in Gujarat with a turnover of roughly around Rs 250-300 crore, industry insiders estimated. Around 25-30 per cent of the net production is exported.

At present, countries in Africa and the Commonwealth of Independent States (CIS) region comprise the bulk of the medical device exports from the region, while the share of European countries is around 10-15 per cent at the moment. However, companies are gearing up for exports to European nations as well.

As Pandya points out, cluster development initiatives by government agencies as well as non-profit organisations in the last four to five years has resulted in Gujarat-based device-makers opting for both ISO and CE certifications. From just a couple of companies having CE certifications a couple of years back, the number has gone up to around 40 companies.