For most Taiwanese manufacturers, specialisation is the key to success. The export-orientated island is a global centre for high-tech manufacturing in large part because it is home to companies that focus on making a single electronic component well – and as cheaply as possible.
Scandinavian Health, also known as SHL Group, is not like most Taiwanese companies. The privately held medical device manufacturer is as much influenced by its Swedish founder’s love of engineering techniques as by the fact it was founded in Taiwan.
It is the world’s biggest supplier of drug delivery systems, which include different types of inhalers and injectors. Yet besides holding more than half the global market for those devices and counting some of the world’s biggest pharmaceutical companies among his clients, Roger Samuelsson, founder and group president, has expanded Scandinavian Health’s business to other types of medical equipment such as medical slings and rehabilitation beds.
He has also made Scandinavian Health increasingly vertically integrated and able to provide services from moulding and tooling all the way to final assembly and labelling.
At the beginning of next year, the company will open a new plant in south Florida in the US specifically for final assembly, labelling and packaging services.
This process of “in-sourcing” capabilities, Mr Samuelsson says, is starting to pay off. With business growing at a double-digit rate and orders continuing to come in despite the financial crisis, he expects the Scandinavian Health group to at least double in size within the next three years.
“We’ve signed contracts [with clients] and need to deliver,” he says. “We are at 1000 staff in Taiwan now, and it will not be that hard to grow to 4,000-5,000 people because it’s just doing more of what we’ve always been doing. We don’t need to invest in new technology.”
Scandinavian Health hopes the expansion will boost its market share in drug delivery systems to 70 per cent by 2012. The industry as a whole is growing as well, Mr Samuelsson says. “More and more drugs are being used on a routine basis, and it is too expensive and inconvenient for patients to have to go to the hospital every week or even every day,” he says. This makes the use of disposable injectors, one of Scandinavian Health’s key products, more attractive.
The company was shielded from much of the impact of the financial crisis because it works with large, international pharmaceutical companies and because its delivery devices are one of the last steps in getting a new drug to market.
“It’s at the tail end of the development process, so the pharmaceutical companies were even more anxious to launch new drugs on time during the downturn,” says Mr Samuelsson.
Another shift over the past few years that is driving Scandinavian Health’s expansion is the rise of Asian pharmaceutical companies. “We are getting enquiries from China over the past six months, which never happened two or three years ago,” Mr Samuelsson says.
This is a particularly good development for Scandinavian Health, as its Taiwanese origins means it is much closer, geographically and culturally, to those clients.