Grasping the Chinese diagnostic markets: A Success Story
Interview with Mr. Ismo Råman, CEO of Medix Biochemica
Medix Biochemica is a Finnish biotechnology company that develops, produces and markets high quality raw materials such as monoclonal antibodies, antibody services and recombinant antigens for In Vitro Diagnostics (IVD) industry as well as diagnostic rapid tests for human healthcare worldwide.
The company has over 30 years’ experience in immunodiagnostics and it devotes a substantial part of its revenue to R&D. Medix Biochemica has operations in Finland and in China and it employs 100 highly educated people. Medix Biochemica’s products are sold to global market place. The biggest sales go to China, USA, Japan and major EU countries. High quality is the corner stone of Medix Biochemica’s operations, which are ISO 13485 certified and conform to US FDA QSR requirements.
Why investing in the Chinese market?
The global IVD market is growing at 5 % per annum rate but the Chinese market is growing well above 10 %. That is the main reason why we have now established ourselves in China. The Chinese diagnostic market is facing evolution, where the general health reform is the driving force. The emerging domestic production is changing the diagnostic market in China. Foreign companies, like Medix Biochemica are needed to ensure the high quality.
Medix Biochemica has been on the Chinese market since 2001. Our expectation for the Chinese market has been right from the beginning major growth. In our Bioreagent business we used local distributor but we felt that we need to have closer contacts with our customers. In this way, we can have better insight to customers’ future needs and help our product development.
Establishing in China: practical arrangements
Our strategy was to establish WOFE (wholly owned foreign enterprise) right from the beginning to enable direct contacts. In the China company establishment, the most important element was to find a good and reliable general manager for the company. We used a well-known recruitment company for this. In order to control potential risks, we decided to outsource accounting services and use well known multinational company for auditing book keeping. We also decided to use Fintrade services for the role of company supervisor.
When we started the Medix China project we looked at different consulting companies for setting up to the company. Fintrade was selected because of long and well established history in setting up companies in China. Fintrade took care of all necessary details and managed the process very well and in time. We selected Shanghai as the place mainly because there are so many IVD customers around Shanghai area and also because of good connections from Finland.
Milestones in Medix Biochemica China operations
Medix China was registered in the beginning of March 2016. The office was fully operational from the beginning of July 2016 with totally 4 employees. The start-up phase of our own China operation has been really fast. Since that time the sales have grown significantly, over 60 %. Last August we opened an application laboratory in the Medix China office to provide technical service to our Chinese customers. Medix China currently employs 9 people and we are in the process of recruiting more people.
What is on the agenda ?
Our future goal is to double the sales in the next 2-3 years. In addition to application laboratory we are considering setting up R&D activities and possibly also local manufacturing in China. This means we step in to the second phase in our China operations.
One negative thing is that Shanghai area is becoming very expensive to place to have own office. In general, the challenge is to find trained and qualified people with good enough skills in English. But we have been able to build an excellent team in our China office. It is importantto have Medix Biochemica as a great place to work, also in China. To conclude, the take home message from the Medix Biochemica story in China, so far, is to encourage Companies, and not only in the field of diagnostics, to daringly grasp the market potential.
Story to be continued…