Business transformation and restructuring of domestic med-tech firm designing, manufacturing and supplying life-saving equipment

Abstract

Established in 1988, Shree Pacetronix Ltd is medical technology company engaged in manufacturing and supply of essential life-saving medical devices ie. implantable and external cardiac pacemakers and its accessories, with the mission to ’give Quality to Life’. SPL is India’s first & only pacemaker manufacturer, and one amongst 06 in the world. While the company generates US$ 1.3 Mn in revenue and reports profits year-on-year basis, the firm has witnessed only limited, or stable at best, growth in over last 30 years of its existence. According to Niti Ayog report titled ‘Investment Opportunities in India’s Healthcare sector’, the scope of the Indian medical devices market is projected at US$ 12 Bn, expected to grow to US$ 50 Billion by 2025. India ranks amongst Top 20 markets globally, and 4th largest in Asia region. However, the country has heavy reliance on imports, esp. high-end medical devices. This segment is served by multinational companies and imports accounts for nearly 90% of the segment. Domestic medical devices industry is marred with challenges, not limited to infrastructure, almost absent supply chain, high cost of capital and inadequate R&D budgets. The report estimates 12-15% cost of manufacturing disability, vis-a-vis competing economies. The government is planning a big boost for India’s medical device sector, certain markers are ~ release of Draft National Medical Device Policy 2022 (Medical device industry was regulate under pharmaceuticals policy), adoption of a ‘Manufacturing Ecosystem Cluster Development’ approach with 5 medical device parks planned with ‘plug & play facilities’, access to testing facilities as well as consolidated raw material procurement etc. With that backdrop, the group worked on ideas leading to business transformation of SPL.