Medical tech exports could hit $1b
Big players like F&P Healthcare tipped to provide most growth.
Thursday, June 30 2011 || News || BY Nick Krause, Businessday.co.nz
The Medical Technology Association of New Zealand, which this week hosted the inaugural national healthcare congress, said it already contributes almost $600 million in exports to the New Zealand economy. MTA chief executive officer Faye Sumner said the sector would benefit from rising healthcare spending and advances in medical science globally.
She's also predicting that the big hitters will provide most of the growth, with the listed Fisher & Paykel Healthcare likely to reach the $1b revenue target on its own within five years.
F&P Healthcare chief executive Michael Daniell said 99 per cent of its $506m record operating revenue for the year to March 31 was generated outside of New Zealand.
''We typically double in size every five years or so and that's a little bit exchange rate dependent because we sell in other currencies and convert to New Zealand dollars so ... over the next five years or so we would be hoping ourselves to be getting close to the $1b revenue mark,'' Daniell said.
That would make the target straightforward for the rest of the industry.
Although the company was facing a headwind in converting its sales to NZ dollars, it was ''quite well buffered'' from foreign exchange hedging to protect it from volatility, he said.
Guidance for full year 2012 puts F&P Healthcare's revenue at between $530 and $580m and net profit in the range of $62m to $76m compared to $63.9m in the last financial year.
''We predicted quite a strong underlying growth setting aside any fluctuations in the dollar. We've been a little cautious because the world is a bit of an uncertain place at present,'' he said.
An industry sector blueprint by the MTA earlier this year outlined the growth potential, particularly with the increasing overlap of health IT and medical devices creating a new path for innovation.
New Zealand was well-positioned to capitalise on growth in established markets such as the US, Europe, Japan and Australia along with the fast-growing Chinese market.
And as well as F&P Healthcare, there were other successful companies like mid-sized Orthopaedic Synergy (orthopaedic devices), Dynamic Controls (electronic wheelchairs and scooters) and Triodent (dental technology).
Sumner compared New Zealand's sector growth with that of Denmark, which had a similar population but had 1000 companies operating in the healthcare sector with more than 220 dedicated to medical technology. It had $26,400 higher exports per capita against New Zealand's $9200 in 2009. In the year to August 2010 Denmark exported US$2.6b in medical devices compared to our $600m.
The industry would need to bump up investment in research and development ($65.3m was spent last financial year), clinical trials and skilled staff while the government was critical in ensuring the right operating environment, including a regulatory framework that supported local manufacturers, she said.
The MTA blueprint said the sector planned to hire 165 full time workers in the next two years while 22 companies planned to raise $44.1m in the same period.
''We've nearly doubled our exports in the last three years and I've got no doubt we'll do it again in the next few years,'' she said.
