Philips Opens Facility in India

Royal Philips Electronics N.V. has opened a new medical imaging systems manufacturing facility in Chakan, India. The Philips Development and Manufacturing Center is located approximately 124 miles east of Mumbai, in Chakan, near Pune.

The plant will focus on diagnostic and interventional imaging solutions, and will serve mainly smaller hospitals in the country with limited budgets.

“We will continue to provide top hospitals in the cities with our high-end equipment from Best, the Netherlands,” executive vice president at Philips Healthcare Bert van Meurs told Bloomberg. “At the same time we will supply smaller hospitals with machines from this facility in India, which require less complex products because the medical procedures at those places are less complicated.”

At first, the products will be designed for the Indian market, but will soon be marketed globally. They will eventually be marketed to the “value segment,” as company spokesperson Steve Klink put it, in the BRIC nations and other regions in Asia that are looking for entry-level products. At the same time, the facility was designed for flexibility in manufacturing, so it will also be able to aid mature markets that are seeking upgrades or replacements for their entry-level diagnostics devices.

The first products to be manufactured in the facility will be diagnostic X-ray systems and the Allura FC, Philips’ first catheterization lab (cath lab) in India. The Allura FC cath lab, a compact cardiovascular X-ray system, is used in the diagnosis and minimally-invasive treatment of cardiovascular disease which is one of the leading causes of death in India.

“This plant is an example of how Philips can combine its technology strengths and market knowledge to manufacture products for a healthier India,” said Rajeev Chopra, managing director and vice chairman of Philips India. “The Pune facility is producing X-ray and cath lab equipment … that is affordable for tier-two and tier-three towns and rural markets.”

Locating the facility in India allows Philips to develop and maintain close relationships with local partners, says Gene Saragnese, CEO of Imaging Systems at Philips Healthcare:

“In order to make a difference in this market, we need local expertise, low-cost manufacturing capacity and close relationships with our customers.”

Local relationships are indeed important. Amy Hariani, director and legal counsel for U.S.-India Business Council, said recently at the Medical Device Manufacturers Association’s annual meeting in Washington, D.C.:

“You don’t need a local partner, but because of … their familiarity with the culture, it’s advisable to do so. They can help the navigate regulatory maze and they will have knowledge of the distribution networks and hospitals.”

According to a press release announcing the new facility, Philips has conducted “in-depth research to understand the on-the-ground requirements,” and has “worked closely with healthcare partners to gain better insight into their ‘Made in India’ needs.” Philips is basing its game plan on the results of this research, which shows low operating costs, energy-efficiency, easy serviceability and support for high patient volumes, are critical to increasing healthcare access in India and thereby improving patient outcomes. Philips will endeavor to tailor its offerings from the new facility to these unique factors for the Indian market.

In 2008, Philips initiated the expansion of its industrial and commercial footprint in India with the acquisition of Alpha X-ray Technologies and Meditronics, manufacturers of cardiovascular X-ray solutions and general X-ray systems, respectively.

Philips Healthcare is a subsidiary of Royal Philips Electronics N.V., and has its U.S. headquarters in Andover, Mass. Philips Healthcare produces a range of technology for diagnostics, treatment and preventative care.