TECHCOMP HOLDINGS is set for another boost in its business, with its plan announced yesterday to ramp up production capacity for equipment targeted at hospital laboratories. Specifically, the equipment are biosafety cabinets are used to provide primary containment in the laboratory when the investigator is using potentially infectious materials.

In a nutshell:

Biosafety cabinets shield operators and facilities from exposure to potentially hazardous materials. Photo: Internet

Event: Sometime this month, Techcomp Holdings will inaugurate a new facility to ramp up the production capacity for its biological safety cabinets, which are widely used in hospital laboratories across China.

Rationale: There is huge demand coming on stream for the equipment, according to Techcomp.

How huge: “As part of its overall rural healthcare reform, the PRC government will be constructing 2,000 country-level hospitals, 29,000 township clinics, 2,400 community healthcare centers and to upgrade 5,000 township clinics and 3,700 community healthcare centers by 2011. I believe this will boost demand for healthcare and medical equipment, which will benefit Techcomp in the long run,” said Richard Lo, President & CEO of Techcomp.

Consequence: The PRC healthcare laboratory market is set to become another major growth driver for Techcomp in the coming year.

Richard Lo, President & CEO, Techcomp.
Photo by Leong Chan Teik

Techcomp’s experience to date: “Our expansion into the manufacturing of the biological safety cabinet was a huge success. To date, our existing production facility is running at 90% utilization rate and enquiries are still coming in. We are expanding our production capacity to cater to the next phase of growth in the PRC,” said Richard Lo.

Techcomp obtained ISO13485 last year for the development and production of its healthcare laboratory product. This certification recognizes its achievement on quality management system for medical devices.

Techcomp is looking to build on this platform to expand its market share in the PRC healthcare laboratory market.

According to a Deutsche report dated 25 August 2010, the PRC medical device market is worth approximately USD 26 billion in 2010, reaching USD 62 billion by 2015.

The diagnostic market alone was estimated to be USD 4.4 to USD 5.9 billion and the IVD market to be around USD 1.8 billion in China.

Source: Bloomberg (Techcomp stock price: 39.5 c)

The report also highlighted that China medical equipment market is highly fragmented with over 13,000 manufacturers with intense competition among domestic manufacturers in the low-end equipment market, while global players dominated the high-end market.

Techcomp with its strong foreign alliance in R&D capabilities and domestic manufacturing capacity is well positioned to capture more market share in the mid-high tier market.

Therefore, the Group plans to further establish a separate division in its sales channel for the healthcare laboratory market as the management believes that this will become another important growth driver for the Group in the coming years.

Recent stories:

TECHCOMP: Growth in 1H, much stronger 2H to come

TECHCOMP: Exploring opportunities, including European buyouts

TECHCOMP: From HK$50K to S$70 million in 20 years

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