No Longer Just a Low-Cost Manufacturing Hub, Irish Suppliers
Want to Showcase Their Other Value-Added Services
Driving through the rolling green hills full of yellow heather and aged stone walls, the countryside of Ireland is every bit the beauty of a certain famous soap commercial come to life. As the multitude of sheep and cows might indicate, plenty of people still earn a living in the form of agriculture.
Nestled among all the green fields in Ireland is a booming medical device market.
Over the years, however, Ireland also has become known for its innovation in technology—particularly in the medical device industry, for which advances in this country are paralleling those of the United States.
While outsourcing has become more commonplace in areas such as Mexico and Asia in recent years, Ireland still maintains a stronghold as a European hub for medical device manufacturing, thanks to its cost-efficient yet well-educated labor.
Many Irish-based suppliers, having developed good reputations locally and abroad, now are looking to extend their success by branching out to more US-based companies. While most of these businesses would like to count the large OEMs among their customers, the Irish believe they are especially well suited to serve the needs of smaller US firms looking to build a presence in Europe. The rationale is that companies unfamiliar with European supply chains and regulatory requirements may not realize that an Irish supplier can offer an attractive package for low-cost manufacturing, assembly and supply chain management, among other resources.
As an added bonus, executives say, the Irish work within the same time zone as their European neighbors, something Asia and other lower-cost manufacturing locations can’t boast. And the lack of culture shock or language barriers for US executives doing business in Ireland further sweetens the pot.
“We have a saying: ‘We are closer to Boston than Berlin,’” said Helen Ryan, CEO of Creganna in Galway, a city that boasts a major cluster of med-tech companies.
A Heritage of Innovation
Ireland actually was once a hotbed for the electronics industry 15 years ago. As the nation’s technological advances became apparent to the rest of the world, other industries migrated there as well—eventually branding Ireland less of an agricultural country and more of a sophisticated technicenter. CR Bard was the first US-based medical device OEM to set up shop in Ireland, and Boston Scientific, Stryker, Abbott Laboratories and others soon followed.
Editor Jennifer Whitney recently visited with several companies in Ireland that provide contract services to the med-tech industry. Pictured (left to right) are Alan Crean, VP commercial operations, Creganna; Whitney; Helen Ryan, chief executive officer, Creganna; and Sean McEllin, regional vice president for Enterprise Ireland.
Perhaps the most attractive reason to manufacture in Ireland is the country’s low corporate tax rate of 12.5%. While Irish-based companies realize that this may have the connotation that their country is a place for “cheap” labor, executives there want their US counterparts to know that they have so much more to offer. “We are a knowledge-based enterprise,” Ryan noted. “We invest heavily in our own research and development and we have been narrow in our focus to ensure we have success.”
Several heads of Ireland’s contract service providers are ex-patriots from Irish “multinational” businesses—ie, OEM companies headquartered in the United States (or another country) that have branched out to Ireland for lower-cost manufacturing.
For example, Brivant Limited, a Galway-based company that specializes in guidewires, was formed by a group of engineers who previously spent years working for Boston Scientific and Abbott Laboratories. Having identified a void in the market when they realized nobody was making what they sought in their daily work, these individuals decided to form their own business.
“There aren’t that many companies making interventional guidewires, so we’ve been able to use our experience to provide service from womb to tomb,” said Brivant’s CFO, Bren-
Where Expertise Is Combined With Added Value
Certain needs in the medical device industry are universal to any company operating in this field, especially technical expertise, proven quality assurance, rapid turnaround and supply chain management. And like in the United States, one-stop shopping trends in outsourcing have been flourishing in Ireland.
“Customers are asking us to do more and more. They’re putting more demands on us; they want everything faster and cheaper in a shorter timeframe,” said Tomás Furey, VP of regulatory affairs for Brivant, adding that his company has stepped up to the challenge by handling customer’s needs for everything from rapid prototyping to regulatory, design and distribution.
Creganna, which has been concentrating on the minimally invasive surgical market, similarly has been strategically evaluating where the company can offer value in areas such as complex assemblies. The biggest push, however, has been in contract design services. “Customers were asking us to get involved in design and learn about their design challenges. We’ve had a lot of success in this area,” noted Ryan.
In the quest to become a one-stop shop, Creganna has structured its business model into four distinct
divisions: in-house R&D, design services, rapid prototyping and engineering/production.
Corporate management at ANSAmed Ltd., an extrusion specialist based in Boyle (Co. Roscommon), has developed a competitive edge by investing in technology and expertise that many OEMs either can’t or don’t want to invest in. Along with micro-bore technology, multi-layer, tapered and multi-lumen extrusion, ANSAmed has been acquiring even more high-tech equipment—all while operating in a class 100,000 cleanroom facility. And to achieve the quick turnaround customers need, the company has beefed up its in-house tooling and streamlined management of production orders and logistics.
Other companies have taken their capabilities one step further by combining their own innovation with value-added service. Proxy Biomedical Ltd., a Galway-based full-service medical device company specializing in biomaterials, manufactures mesh-based wound care products that are distributed through Boston Scientific. The flexible product platform uses Proxy’s own proprietary technology and can be customized for a customer’s particular procedure or specification.
This type of attention toward R&D has helped garner more attention toward Ireland’s innovation, instead of just its tax breaks. In fact, companies such as Creganna and Brivant dedicate as much as 25% of their resources to R&D initiatives. Proxy Biomedical currently has R&D preclinical staff working in the United States with universities such as Case Western. “We outsource to the United States just as US-based companies do to Ireland,” Managing Director Peter Gingras noted.
Gingras’ relationship with the United States is personal, given that he is an American citizen who was born and raised there. While many Irish companies originate in their European homeland and eventually permeate the US market, Gingras has had the opposite experience. Having wanted to start his business years ago, he cherished his Irish heritage and decided to transplant his wife and children to Galway so they could prosper in Ireland’s booming medical device industry while being closer to his family there—all while avoiding culture shock and maintaining standards of living close to (or even better than, he said) what he and his immediate family were used to in the United States.
Partnership With No Borders
Behind the laid-back, jovial charm that the Irish are known for is a burning ambition to gain more ground in the United States.
Established in 1992, ANSAmed is a bit unlike other Irish companies in that the company was originally owned by a US firm based in New Jersey before it was bought by Irish owners. Ever since, the contract service provider has been finding steady work in countries such as Ireland, Germany, the Netherlands and Italy; it even has forayed into China and Japan. Hoping to enter the US market next, ANSAmed already has targeted European operations that have worldwide headquarters in the United States and eventually will concentrate on the US bases themselves.
Understandably, though, the company realizes that successful entry into any new(er) market rests with one thing: It’s all about proving yourself: “You get the opportunity, take it and prove yourself,” said ANSAmed’s Managing Director, Báirbre Meehan. However, she added, “We need to be ahead of the competition in our thinking, delivering differentiating extrusion technologies and supporting them with a strong technical presence in the field.”
Similarly, Dublin-based Pressco has been stepping up efforts to become leaders in electromechanical assembly and supply chain management. As such, the company has invested heavily in its quality programs to keep up with the vast project management it performs in working closely with customers’ suppliers as well as its own. Pressco already has been successful over the years with its US-headquartered customers with facilities in Ireland, such as Tyco, Respironics and Bayer.
“We’ve been content with our success in the Irish market, but now we want to expand into exports,” said John Hayes, business development manager for Pressco. “We realized a few years ago that we’re big fish in a small pool. Now we want to be small fish in a big pool.”
A low corporate tax rate offers US companies a major benefit when outsourcing work to Ireland. Photo courtesy of Creganna.
Schivo partnered with eVent Medical in 2002, with Schivo manufacturing eVent’s complete critical care ventilator system. To further broaden its reach in the med-tech industry, Schivo Group has spent the past year investing about $2.3 million in new technology and adding an automated class 100,000 cleanroom and class 10,000 assembly cleanroom facility. One of Schivo’s recently commissioned technology manufactures to within five microns in a climate-controlled environment, is capable of making components in one single process (ie, no need for multiple machines/processes) and can be monitored in real time by a client from any location globally.
Along with investments in technology and capabilities, the Irish are steadily building a presence at trade shows and other industry venues. Along with market research efforts, these companies also are looking into expansion through acquisitions and licensing opportunities. Many already have established—or plan to—US sales forces and/or offices. “We log quite a few miles in transportation,” Ryan of Creganna noted.
On the flip side, Irish suppliers are hoping that US companies will start logging more miles to come see for themselves the array of potential outsourcing partners in their native land. The Irish, fully aware that American politics have impacted international views toward the United States in general over the past few years, believe that having a partner in the European Union may help a US-based business avoid any friction or resistance in foreign lands.
“If we can get people here, we can show them what we’ll do,” said Hayes of Pressco. “Convincing companies to come and check us out is the challenge, but we know we have great products and service. For instance, how does a small-tiered company set up a manufacturing option to get into Europe? We can give them a low-cost, no-risk option to get into that market.”