More medical device manufacturing jobs leaving Baystate

[paineinthearse]

http://www.bizjournals.com/industries/manufacturing/general/2005/05/09/boston_story1.html

Boston Business Journal

From the May 9, 2005 print edition
Device cos. eye China frontier

With massive opportunities comes threat to Mass. manufacturing base

Mark Hollmer


Journal Staff
After more than 50 years in Massachusetts, Dielectrics Inc. is launching Dielectrics Asia -- its first manufacturing plant in China -- with full production of plastic components for other medical device firms' products expected to begin there later this year. Chicopee-based Dielectrics, which makes parts for other medical device company clients, employs 250 people here in both research and manufacturing. They'll hire 50 or more manufacturing employees in China once production kicks in at the new plant, a joint venture with a Taiwanese partner. Chief Operating Officer Christopher Nesbitt says the expansion will give Dielectrics' customers a new source for parts with cheaper labor. But there's also the reality that Dielectrics will have jumped into a potential market of more than 1.3 billion people, with enormous potential for added customers in China, Taiwan, Japan and elsewhere who want to manufacture in China for their markets and others.

For the medical device industry in Massachusetts and elsewhere, China looms as the next great frontier, with an estimated $7 billion market growing 15 percent annually. Anyone curious about Bay State medical device company interest in boosting business in China needed only to attend a recent Massachusetts Medical Device Industry Council conference held to point the way to selling products in China. More than 120 companies, including Dielectrics, signed up for the MassMedic event. One of the things they learned: 40 percent of the market demand is met through imports, which presents Massachusetts companies with enormous opportunity for sales growth, armed as they are with technology that already has a progressive reputation.

"We're on the cutting edge," said Robert Ward, executive director of the Massachusetts Office of International Trade and Investment. "So we can compete around the world and especially in places like China." But opportunity also carries risk to the more than 21,000 manufacturing jobs the sector has here now, and state officials are trying to grow. Massachusetts has clung to the production of sophisticated and high-margin devices, but China is increasingly working to accommodate more than commodity manufacturing.

While experts and company officials interviewed for this story say they expect research and development and high-end manufacturing to continue here, companies like Dielectrics and Nypro Inc. in Clinton are already expanding basic manufacturing of product components in China to help manage clients' and their costs.

Tapping new client base With medical device companies often outsourcing some of their manufacturing anyway, they are trying to keep and expand their client base as companies turn to overseas and Chinese component manufacturers. Consider, too, the MassMedic China conference. While most were there to focus on expanding their Chinese sales, some, including an official with Philips Medical Systems -- a medical device division of the Dutch conglomerate that employs 2,000 people in Massachusetts -- quietly asked speakers about manufacturing opportunities in China. (Philips also launched a joint venture in Beijing last year in northeast China to make ultrasound and X-ray gear.) And then there are companies like AgaMatrix Inc. in Cambridge, which is looking to cut costs, in part by moving to New Hampshire, but is also planning to manufacture its glucose-monitoring meter in Asia or China.

more...

Mark Hollmer can be reached at [e-mail].

[Rockholm]

1. Thanks Mitt Romney.

[Kathy in Cambridge]

2. Mitt has brought SO many jobs to the Baystate!

:sarcasm: