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MEDICAL DEVICES
From Site Selection magazine, September 2005


Clusters Keep Getting Bigger

The medical device industry likes to expand in established areas.

by John W. McCurry

BD Medical has expanded seven times over the last 25 years at its huge facility in Sandy, Utah. In addition to the company's three-state, $175-million production expansion plan, it just announced in early August a $40-million distribution center in Plainfield, Ind.
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good sign your new manufacturing operation is being met with open arms in its new location is when the president of the country attends your ribbon cutting ceremony.
     That was the case in May 2005 when President Vicente Fox of Mexico was on hand for festivities marking the inauguration of Wilson Greatbatch Technologies' new 144,000-sq-ft. (13,400-sq-m.) manufacturing operation in Tijuana. Wilson Greatbatch, a developer and manufacturer of components going into implantable medical devices including pacemakers and defibrillators, joins an established medical device manufacturing cluster in Tijuana that includes Medtronic, Tyco Healthcare and Johnson & Johnson.
     Wilson Greatbatch is closing its facility in Carson City, Nev., as it ramps up Tijuana operations, but the Mexico facility will create new revenue opportunities for the company, officials say.
     Mauricio Arellano, president of Greatbatch Mexico, says his company looked at about five locations in Mexico before narrowing the field to Tijuana and Tecate, about 20 miles (32 km.) away. He says Tijuana's education system and the availability of trained labor were major selling points.
     "Tijuana has 18 universities and technical schools, graduating industrial, mechanical, electrical systems and other engineering disciplines to support industry growth," Arellano says. "There is an industrial culture in place that dates back 40 years of constant evolution. Lean manufacturing and Six-Sigma tools are commonly used in most medical device operations.
     "We've hired a lot of engineers, Mexican nationals who have their PhDs," he continues. "From the first day of recruitment, we've had no issues in attracting talent. When you look at my management staff, each one of them comes from a medical device manufacturing background."
     Wilson Greatbatch's new facility is in ProLogis Tijuana Park, just two miles (3.2 km.) from the
Wilson Greatbatch recently opened a new facility in
Tijuana, Mexico.
U.S. border. Aiding logistics is the presence of about 50 specialized international freight companies and more than 100 trucking firms serving the Tijuana-San Diego area, Arellano says.
     The building is equipped with the latest technology. Production began in March and by late July, 112 workers were on board. Plans call for 400-500 workers at the facility by 2008.
     "It's a state-of-the-art facility and I'm not just saying that as a cliché," Arellano says. "We have automated controls systems. ProLogis is our partner and their business model is the same everywhere. They promised a completed building in six months and they did it. They have the best infrastructure in Tijuana. Being this close to the border, traffic of goods and visitors is incredibly convenient."
     Medical device manufacturing is by no means new to Mexico, but now the evolution is towards high-value-added manufacturing, Arellano says, adding that the entire state of Baja California is targeting this advanced sector of the industry.

Utah's Cluster Also Expanding
     Clustering of manufacturers is common in medical device manufacturing. Another industry stronghold seeing expansion is the Salt Lake City area. BD Medical, a division of Becton, Dickinson & Co., has had a strong presence in the suburb of Sandy for nearly 50 years with frequent major expansions.
     The Sandy facility, which is the world's largest catheter manufacturing operation, has expanded seven times over the last 25 years. The latest is now under way with a US$31-million project to add 40,000 sq. ft. (3,700 sq. m.) of manufacturing space, bringing the sprawling complex to 540,000 sq. ft. (50,100 sq. m.).
     The expansion is part of a $175-million development of the company's production capacity in Utah, Nebraska and South Carolina for advanced safety-engineered devices.
     The Sandy facility will boost capacity for a new BD Vacutainer Push Button Blood Collection Set that utilizes a spring-loaded fixture. The product is designed to prevent needle-stick injuries during the blood sample collection process by healthcare workers.
     Long-range plans for the Sandy complex call for an additional 100,000 sq. ft. (9,300 sq. m.) of manufacturing space to be added between 2008 and 2010. The ability to recruit trainable workers has been a key to the facility's success and regular expansions, company officials say. This is particularly crucial in the manufacture of high-tech medical devices.
     "The culture in Utah is very acceptable to a team-based manufacturing environment," says Michael Halladay, BD plant manager at Sandy. "It's a great place to expand. We've been able to transition our work force to high-skilled jobs. We are a center of highly complicated automated manufacturing processes and we've been able to bring production here that might have gone to other states."
     BD Medical is also expanding in the U.K., with a $5-million project at its Swindon facility to increase production of the company's Preventis hypodermic needle. The investment will create about 20 jobs and the new line will be operational in March 2006.

Growth Sends Firm
Across Ohio River
     MedVenture Technology Corp., a designer and manufacturer of minimally invasive surgical products and other medical devices, is moving from Louisville, Ky., across the Ohio River to Jeffersonville, Ind., in its quest for larger manufacturing space. The firm will move to an 85,000-sq.-ft (7,900-sq.-m.) facility in the NorthPort Business Center, which the state is designating as a Certified Technology Park, offering special tax incentives.
     MedVenture will receive more than $4 million in incentives from Jeffersonville and the state. The company also has a new product development agreement with Purdue University.
     MedVenture plans to create about 170 jobs by 2007 and more than 500 by 2010.Site Selection



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