02.05.09
Medical Product Outsourcing will bring together leaders from medical device manufacturers for its first-ever international symposium from March 4-6 at the Costa Rica Marriott San Jose. Here, discusses how his country is working to create an infrastructure to meet the needs of high-tech manufacturers.
What makes Costa Rica a good option for companies looking to manufacture medical devices?
Marco V. Ruiz, Costa Rica’s minister of foreign trade. |
By the end of 2008, there were 28 companies from the medical devices sector already set up in the country, generating more than 8,000 jobs (six times more than 1998). Hospira, Hologic, Boston Scientific, Baxter and St. Jude Medical are some of these companies.
What do you feel are the country’s commercial strengths?
Costa Rica is a small and open country—fourth place in Latin America, 2008 Heritage Freedom Index—whose location at the heart of the Americas allows quick access to the largest markets in the world. Costa Rica has signed several agreements with its main trade partners, among which the free trade agreements with the United States, the Dominican Republic and Central American countries—part of the Central America Free Trade Agreement, Chile, Panama, Canada and Mexico stand out. In addition, agreements with the European Union, China and Singapore are being negotiated.
Costa Rica has become an excellent platform for the exportation of goods and services for the world.
What peripheral industries (suppliers, support industries, etc.) have taken root in Costa Rica that could benefit device manufacturers?
Some peripheral industries are: metal work, plastic injection molding, medical wire, trays, sterilization, springs, contract manufacturers, packaging, tubing and pouches, coating and engineering.
This well-established supplier base complies with international quality standards and supports high-tech multinational companies in several core processes. In addition, there are programs aimed at developing linkages with domestic small and medium enterprises through capacity building, training, financing and certification services, the most relevant of which is Costa Rica Provee.
How does Costa Rica compare to other manufacturing centers in Latin America—particularly for high-tech goods? How does it compare to Asia?
In Costa Rica, there are a lot of high-tech companies. Forty-five percent of the country’s manufactured products have high technology content. According to the last “World Development Indicators” report from the World Bank in 2008, Costa Rica ranks fourth in the world as exporter of high-tech goods, behind Singapore, Malaysia and the Philippines. It is No. 1 in Latin America.
How has the country’s infrastructure improved to support the needs of 21st century, high-tech firms?
A lot has been invested in the country’s infrastructure, reducing the response time demanded by high-tech companies. This has caused the country to climb four places in the competitiveness ranking published annually by the World Economic Forum. Recently, the Juan Santamaría International airport was remodeled, where a new information system was implemented to simplify customs procedures. Also, an expedited procedure to obtain residency for expatriates of multinational companies was implemented. The rules and regulations for free zones have been modernized, providing more operation flexibility to high-tech companies. New roads are under construction through highway concession, which will connect San Jose with the main port on the Pacific in half the time. This year, the telecommunications and insurance markets will open. The presence of new global players in the domestic market will allow for the improvement of efficiency, which will directly benefit the business sector of Costa Rica.
What plans does the Costa Rican government have to foster economic expansion and attract new international manufacturing firms?
The law of incentives for free zones will be modified to ensure, among other things, the lowest effective tax rate for companies that set up in our country. Main objectives are to comply with the World Trade Organization’s Agreement on Subsidies and Compensatory Measures, to maintain the country’s competitiveness regarding taxation and to provide incentives for multinational companies to settle in areas of lower relative development.
There will be continuous investment in the country’s infrastructure. The ports of Limon and Moin on the Atlantic will be modernized; a metropolitan train will be in operation in San Jose in order to alleviate heavy traffic in the city. Finally, highway concessions will continue in order to speed up the transportation of people and goods in the country.
One of the areas where the country has concentrated its efforts, and will continue to, is education. The greatest appeal of the country is its renowned, highly trained and productive employees. In order to continue attracting high-tech foreign direct investment (FDI) to the country, a series of initiatives are being carried out, such as: Costa Rica Multilingual, a program which aims to have 100 percent of public high school graduates speaking English at an intermediate level in a 10-year period; the creation of new technical majors and the modification of existing majors curricula in order to fulfill the increasing demand of high-tech companies. Finally, the offering of technical courses at the National Training Institute and technical schools is increasing in order to have a higher number of graduates from majors relevant to high-tech companies.
Aside from the economic impact, how has having medical device firms establish manufacturing centers in Costa Rica helped the country?
High-tech FDI, such as medical device companies, has two kinds of impact on the country. The first one, which is more tangible, translates into more and better jobs, into a significant increase in the exportation of products with technology content, into an increase in the exportation of high-added value services, into having a large part of the current account deficit financed and into a perception of a generalized economic prosperity.
The second effect, called the “dynamic effect,” is related to the transfer of knowledge and technology from medical device multinational companies toward the domestic market. Thanks to the medical device companies, our people are now trained to work under the highest quality standards—ISO 13485, 9001:2003, 14000; GMP (good manufacturing practices) , Lean, Six Sigma, JIT (just in time), 5s). They have experience working in a clean-room environment and are capable of handling FDA approved Class III devices.
Click here for more information on the agenda or to register for the MPO Symposium Costa Rica.