MEDICAL DEVICES
Growing From Within
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| Kalamazoo, Mich.-based Stryker Corp. is investing more than $60 million to expand at two sites in nearby Portage, Mich. |
he medical device industry may not grab as many headlines
as the pharmaceutical industry and other subsectors of the life sciences
field, but an argument can be made that it is the field's backbone.
While a few states dominate the industry, many others have taken the
specializ ation route, cultivating niches. Estimates place the U.S.
industry at US$43 billion in annual sales. With the aging of baby
boomers, this sector figures to stay healthy.
Recent research by the Battelle organization shows the medical device and equipment industry is the largest life sciences subsector in the U.S., employing more than 320,000 at nearly 6,200 locations, with an average annual wage of $52,000.
Battelle, which released its findings as part of a comprehensive bioscience report at the BIO conference in San Francisco in June 2004, says just four states -- California, Massachusetts, Minnesota and Pennsylvania -- have large employment bases. These states account for 38 percent of U.S. employment in the industry. California has 19 percent of overall U.S. employment with approximately 62,000 workers. Florida, New York, Indiana, New Jersey, Texas, Illinois, Ohio and Wisconsin have "sizable" medical device employment, according to Battelle.
Most medical device company executives believe future growth in the industry will come organically, rather than through blockbuster merger and acquisition activity seen in the pharmaceutical industry, according to a recent study by Tunnell Consulting, a King of Prussia, Pa., firm that serves the life sciences industry. Medical device manufacturers say that filling the R&D pipeline with new products with higher margins is a priority.
One of the largest current medical device industry construction projects is under way in Portage, Mich., where Fortune 500 member Stryker Corp. is developing two expansions at separate sites with a total investment of more than $60 million.
The company's Stryker Instruments division, which manufactures orthopedic surgery devices and currently employs about 660, is adding a 200,000-sq.-ft. (18,580-sq.-m.) facility and renovating its current 250,000-sq.-ft. (23,225-sq.-m.) building. The $29-million project includes $9.5 million for site development, new machinery and equipment.
The Stryker Medical division, which manufactures patient care and handling equipment, is building a 400,000-sq.-ft. (37,160-sq.-m.) facility. The $32-million investment includes about $10 million for site development, new machinery and equipment.
Patrick Anderson, Stryker's vice president of strategy and communications, says the company looked at several sites in the greater Kalamazoo area, as well as locations outside the area. As a global company with 14 divisions around the world, Stryker could have moved far afield, but the company's long history in the region played a pivotal role in the decision to stay home.
"The company was founded here by Dr. Homer Stryker and has a long heritage here, so we felt a long-term commitment to the community," Anderson says. "Secondly, we've got an excellent, well-trained work force that has the kind of skills and worth ethic we need. By remaining here, we were able to keep the work force in place and have a chance to add to that in the future."
Anderson says plans call for both projects to be complete in 2005 and create about 125 jobs. Founded in 1941, Stryker posted sales of $3.6 billion in 2003.
Warsaw, Ind., a leading center of orthopedic device manufacturing, is home to Zimmer Holdings, which is investing $64 million to expand its facilities there. Zimmer plans to add 128,000 sq. ft. (11,900 sq. m.) to its distribution center and 50,000 sq. ft. (4,645 sq. m.) of manufacturing space. The expansion will create about 400 jobs over the next three years, 250 of which will come from the Austin, Texas, facility of Centerpulse AG, which Zimmer acquired in 2003.
Recent research by the Battelle organization shows the medical device and equipment industry is the largest life sciences subsector in the U.S., employing more than 320,000 at nearly 6,200 locations, with an average annual wage of $52,000.
Battelle, which released its findings as part of a comprehensive bioscience report at the BIO conference in San Francisco in June 2004, says just four states -- California, Massachusetts, Minnesota and Pennsylvania -- have large employment bases. These states account for 38 percent of U.S. employment in the industry. California has 19 percent of overall U.S. employment with approximately 62,000 workers. Florida, New York, Indiana, New Jersey, Texas, Illinois, Ohio and Wisconsin have "sizable" medical device employment, according to Battelle.
Most medical device company executives believe future growth in the industry will come organically, rather than through blockbuster merger and acquisition activity seen in the pharmaceutical industry, according to a recent study by Tunnell Consulting, a King of Prussia, Pa., firm that serves the life sciences industry. Medical device manufacturers say that filling the R&D pipeline with new products with higher margins is a priority.
One of the largest current medical device industry construction projects is under way in Portage, Mich., where Fortune 500 member Stryker Corp. is developing two expansions at separate sites with a total investment of more than $60 million.
The company's Stryker Instruments division, which manufactures orthopedic surgery devices and currently employs about 660, is adding a 200,000-sq.-ft. (18,580-sq.-m.) facility and renovating its current 250,000-sq.-ft. (23,225-sq.-m.) building. The $29-million project includes $9.5 million for site development, new machinery and equipment.
The Stryker Medical division, which manufactures patient care and handling equipment, is building a 400,000-sq.-ft. (37,160-sq.-m.) facility. The $32-million investment includes about $10 million for site development, new machinery and equipment.
Patrick Anderson, Stryker's vice president of strategy and communications, says the company looked at several sites in the greater Kalamazoo area, as well as locations outside the area. As a global company with 14 divisions around the world, Stryker could have moved far afield, but the company's long history in the region played a pivotal role in the decision to stay home.
"The company was founded here by Dr. Homer Stryker and has a long heritage here, so we felt a long-term commitment to the community," Anderson says. "Secondly, we've got an excellent, well-trained work force that has the kind of skills and worth ethic we need. By remaining here, we were able to keep the work force in place and have a chance to add to that in the future."
Anderson says plans call for both projects to be complete in 2005 and create about 125 jobs. Founded in 1941, Stryker posted sales of $3.6 billion in 2003.
Warsaw, Ind., a leading center of orthopedic device manufacturing, is home to Zimmer Holdings, which is investing $64 million to expand its facilities there. Zimmer plans to add 128,000 sq. ft. (11,900 sq. m.) to its distribution center and 50,000 sq. ft. (4,645 sq. m.) of manufacturing space. The expansion will create about 400 jobs over the next three years, 250 of which will come from the Austin, Texas, facility of Centerpulse AG, which Zimmer acquired in 2003.
