Home grown devices pushed

More of what is used by health industry would be Md.-made

Consortium being formed

Droopy companies might be revived by a new product line

April 07, 2002|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

A Baltimore consulting firm wants more Maryland manufacturers to take part in producing the medical devices used by the state's lucrative health industry.

Bottom Line Connection hopes a consortium it is creating will make it easier for small Maryland companies to enter the field, keeping more of the business in the state.

"There's a lot of medical development going on in the state, and a lot of the companies that produce the components used in this development are from out of state," said J. Morris Binder, Bottom Line's president. "We're trying to create more companies that can produce these products."

The Atlantic Medical Device Consortium is aimed at companies that already produce medical devices or the parts used to make them, but want to increase capacity.

Bottom Line officials also want to attract companies, particularly those in declining industries, that don't produce the devices but have skills that can be easily adapted.

Medical device production, a $64 billion industry nationwide, is expected to grow 8 percent this year and 10 percent next year, according to Medical Device & Diagnostic Industry magazine. Maryland companies often buy their products from New Jersey and Pennsylvania.

The industry tends to do well even during difficult economic times, making it attractive to manufacturers, industry experts said. People don't stop getting sick when budgets become tight.

"What we find is that whenever there is a recession, a lot of the companies that are in the high-tech industry that start to lose business come looking to the medical device industry because it's stable," said John Bethune, editorial director for Medical Device & Diagnostic Industry.

Three companies are in the Atlantic Medical Device Consortium so far, and Binder has made contact with at least a dozen others.

Hagerstown-based Electromet Corp. is one that has joined. The precision sheet metal and machine shop makes cases used to hold several types of medical equipment. One of its biggest clients uses the product to house postnatal care equipment.

The company's president and owner, David McCain, said he expand the consortium will help him grow the medical part of the business to 40 percent from 15 percent.

"It looked like a good opportunity to be able to get more involved in the medical industry," McCain said. "It's an important part of our strategy for this year and the next couple of years.

"I think Maryland offers a good opportunity for growth in the industry with [Johns] Hopkins and the National Institutes of Health both being in the area and strong in research."

Companies will pay about $22,000 for consortium membership and Bottom Line receives a portion of that. With that comes a spot on Atlantic Medical's Web site and other marketing tools, such as direct mailing. But most importantly, the members said, is that they'll share booth space at some of the country's major medical device conferences - where many business deals are made. The first is in New York in June.

By itself, a company would have to spend thousands on signage and could afford only a small booth in a noncentral location. The consortium will have a large, highly visible booth where potential clients can look at several businesses at one time.

"We will probably spend the same amount of money as we would on our own, but we'll be much more effective," said Alex Doyle, president of consortium member Micro Machining.

Baltimore-based Micro Machining has its roots in the defense industry, but started producing medical device components in the 1990s when the government cut back on defense spending. It makes parts for endoscopes, diagnostic tubes used to take pictures of internal organs. The company, like Electromet, hopes the consortium will help to expand the medical side of its business, now about 20 percent.

Bethune said high-tech companies and those that make parts that meet high quality standards, such as those for airplanes, are the best candidates for converting to the medical device field.

It's not just manufacturing companies that see the potential of the medical market.

Some business leaders say that it's a good market to tap as companies such as Bethlehem Steel lay off workers. Many of these workers could learn the skills to produce medical equipment, said Paul Taylor, executive director of the Small Business Resource Center in Baltimore.

"We already have a concentration of some of the best medical hospitals," Taylor said. "Since we already have that as an asset, why not build off of it?"

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