Full article reprinted from PharmAsia News - July 7, 2008
TOKYO - Seeing little growth prospect in Japan's rapidly aging population, leading medical device maker Terumo Corp. will boost its catheter production at plants in Maryland, Belgium, Vietnam and Japan as part of its new mid-term business plan, a company spokesman said July 4.
Phoenix 2010 is a three-year program aimed at spurring Terumo's global sales and production expansion to lessen the potential adverse impact of foreign exchange gyrations, Spokesman Shoji Hatano told PharmAsia News. Hiroshi Matsumura, managing executive officer and general manager of strategy planning, disclosed the project April 30 in releasing fiscal 2007 earnings results.
Terumo plans to start catheter production in the United States and Belgium by the end of fiscal 2008, and will build and start operating a catheter production dedicated assembly line at its Vietnamese factory by 2010. In Japan, it plans to build a new production facility at its Fujimiya Factory, at the foot of Mt. Fuji, according to Hatano.
The company will invest roughly ¥17 billion ($161 million) for the project aimed at increasing sales of treatment and diagnostic catheters to ¥170 billion ($1.6 billion) in the business year ending March 2011, or 40 percent more than the year ended in March 2008 under the just-ended three-year business expansion program, Hatano said.
Terumo's catheter sales worldwide have been growing by 10 percent year-on-year over the past 10 years. Under the new three-year plan, it targets year-on-year growth of 12 percent, he said.
Seeing little growth potential in Japan due to the country's rapidly aging population, Terumo's new three-year program is zeroed in on the U.S. and European markets for medium-term growth.
Underscoring how serious the company is about the U.S. market, Terumo began selling catheters directly to U.S. hospitals two years ago, discontinuing its long-term distribution contract with Boston Scientific, Hatano said.
The company's total U.S. sales were ¥43 billion ($410 million) in the just-ended business year, of which catheter sales accounted for ¥24 billion ($228 million), he said.
Of its total catheter sales worldwide, those in the United States and Europe account for 70 percent - a key reason why Terumo wants to expand overseas production to lessen the impact of the yen's rise against the U.S. dollar and other currencies, he said.
Worldwide medical device sales are estimated at $200 billion, of which the United States accounts for 45 percent; Europe 30 percent; and Japan 10 percent. While denying that Terumo is de-emphasizing the Japanese market, Hatano explained that the market essentially would register flat growth over coming years because of its aging population. Government demographics data project that more than a quarter of the Japanese population will be 65 years and older in 2020 and the population would shrink to 60 million in 2100 from 127 million now.
Such demographic projections aside, Terumo will continue much of its advanced R&D and production of top-end products in Japan, and the Fujimiya factory will foot part of that role, turning out top-end catheters for exports to other markets.
Terumo recently inked a deal with Eisai under which Eisai will transfer all its shares of subsidiary Clinical Supply to Terumo. Details on the deal were not disclosed (PharmAsia News, June 26, 2008).
- Toshio Aritake
PharmAsia News brings you the news and analysis you need to succeed in the competitive global marketplace. Sing up for your 30-day, risk-free trial of PharmAsia News today!
