As the need for home healthcare continues to increase for the baby boom population, the plastics and medical device industry meets this challenge with expanded growth and new products.
Demand for medical plastics in the U.S. is forecast to expand 2.6% annually to five billion lbs. in 2012, valued at $6.55 billion, according to The Freedonia Group, an international market research firm. Growth will be driven by the greater use of disposable plastic medical devices and supplies, as well as plastic packaging products. An aging populace will cause a rising incidence of acute and chronic conditions and an increasing volume of patient activity.
Frost & Sullivan, a business-consulting firm, released a report in fall 2008 which noted that the underlying fundamentals of the U.S. medical devices industry are strong. Its report supports what The Freedonia Group said about the graying baby boomer population continuing to contribute to the demand for medical devices as the health needs of individuals rise with age. Moreover, technological advancements such as the advent of minimally invasive surgery have altered the landscape for treatment.
The Society of the Plastics Industry points out that in the past few decades, plastics have made healthcare simpler and less painful, and new techniques and prostheses possible. Plastic medical devices have reduced contamination, relieved pain and cut medical costs. They have prolonged, improved and saved lives. The U.S. has the lowest rate of cross-staph infection in the world as a result of its use of plastic medical disposables. Plastics are key components of modern prosthetic devices, providing comfort, flexibility, mobility and a life-like appearance. Artificial hips and knees use plastics to help provide smoothly working, trouble-free joints. As the need for home healthcare continues to increase, plastics will play a major role in creating simple, portable and effective medical devices.
And reports created by the U.S. Census Bureau also noted that as the U.S. population ages, healthcare will be increasingly delivered in alternative settings, such as nursing homes, hospices, and, especially, the patient’s own home. As a result, home healthcare products are expected to become one of the fastest growing segments of the medical device industry.
Here are some of the locations that are creating opportunities for medical plastics companies to locate and expand their facilities in their regions.
Putnam County, WV: Growth on the Fast Track
Putnam County, one the fastest growing counties in West Virginia, is equidistant from Charleston and Huntington, the state’s two largest cities. The area has undergone a period of rapid suburbanization, while still retaining its rural flavor. West Virginia is home to the Polymer Alliance Zone (PAZ), one of the highest concentrations of resin producers in the world, including GE, DuPont and M&G Polymers.
Twenty-eight of West Virginia’s 134 polymer companies are located in the zone. The plastics industry employs nearly 7,000 workers statewide, making plastics the state’s fourth largest manufacturing sector. The region has experienced phenomenal growth in plastics fabrication, which increased from 1,300 employees in 1990 to more than 3,500 employees in 2004, for an average annual growth rate of nearly 8%.
The Virtual Center of Polymer Excellence, created by the Polymer Alliance Zone, showcases the capabilities of West Virginia’s polymer industry, its member companies and the Polymer Alliance Zone. Other collaborative efforts include identifying resources such as research capabilities of institutions and individual support for workforce training programs. .
The state has a large supply of trained production supervisors, chemists, chemical technicians, plant and equipment operators, molding, forming and extrusion machine operators numbering more than 48,000 strong. The workforce is very affordable with average industry wages in West Virginia at 90% of the average wage in competing states and 83% of the national average.
The state ranked 10th nationally in plastic resin output per worker and second in output per custom compounding. West Virginia ensures a workforce equipped to meet the challenges presented by today’s advanced technology, with computer literacy required in grades K through 12. West Virginia’s higher education system offers degree programs in all facets of today’s high-technology industries, including biometrics. Vocational facilities aid in meeting the expanding educational needs of the workforce. Putnam County’s location is ideal; Interstate 64 passes through the center of the county, joining I-77 and I-79, providing direct connections to Lexington, KY; Cleveland, OH; Pittsburgh, PA; and Columbus, OH. Other major connectors are U.S. 35 and U.S. 60, WV 34 and WV 62.
U.S. 35 now is undergoing a major upgrade. The new four-lane highway will cross the southern portion of the Putnam Business Park (one of 14 business and industrial parks in the county) and will have direct access to the park. In early 2007, work began on construction of Phase II of Putnam Business Park in Fraziers Bottom. Putnam County Development Authority has advertised for bids for construction of the industrial access road extension at the park. The park includes 205 acres and is located about three miles from Toyota Motor Manufacturing, WV.
Forty-six trucking companies serve the area, 20 of which are headquartered in Putnam County. Norfolk Southern and CSX Transportation are the rail service providers in the county. Running southeast to northwest through Putnam County is the Kanawha River; some 30 barge companies use this waterway for commercial traffic. Regional airports, located both in Cabell and Kanawha Counties provide commercial, cargo and general aviation. West Virginia offers low cost electricity, skilled labor, and available developed industrial sites.
Laurens County, SC: Great Industrial Parks
Laurens County is located in the upstate of South Carolina, mid-way between Greenville-Spartanburg and Columbia. It is bisected by Interstates 26 and 385, which make the county easily accessible to I-85 and the Port of Charleston. Clemson’s Advance Material Research lab is located in neighboring Anderson County. This facility is just a short distance away and easily accessible by the Interstate systems.
Laurens County has four Industrial Parks located along its two interstate systems. Woodfield Industrial Park is located near Exit 22 on I-385 and Owings Industrial Park is located near Exit 19 on I-385; both are near the Greenville/Laurens County line.
Woodfield Industrial Park has approximately 130 acres remaining and Owings Industrial Park has 316 acres. Owings Park has rail service provided by RailAmerica. RailAmerica transports more than 500 million pounds of polymer annually. Hunter Industrial Park is located on I-385 and US 221 at Exit 9 and has almost 400 available acres and is rail served by CSX. ClintonPark Corporate Center Phase III is available for industrial development. Phase 3 is just over one mile from Exit 54 on I-26 and has 140 acres available. It has access to rail, which is served by CSX. Owings, Hunter and Clinton Park III are certified sites by the South Carolina Department of Commerce.
In addition to the parks, Laurens County has several stand-alone sites that are rail served. One such property is the Fleming Smith site, which is 1,500 acres. It is located at the intersection of I-385 and U.S. 221. The site is rail served by CSX. A Site Evaluation and Engineering Report (SEER) has been completed on this site. The SEER includes a Phase I Environmental Study; a Geotechnical Study; a Wetlands Determination; an Endangered Species Study; a Cultural Resources Study; a Seismic Study; and an Infrastructure Evaluation with Infrastructure Cost Estimates. The site also has been master planned.
The county has several buildings available for immediate occupancy. There is a 31,600-square-foot spec building with 28- to 33-foot ceiling heights in the Woodfield Industrial Park. This building was completed in January 2007. Also available in Gray Court is an 80,000-square-foot building that was formerly occupied by BBA Non-Woven. The building has six silos, a rail spur with a covered unloading area and a ground water tank for fire suppression.
The current unemployment in the county is 11%, which is slightly above the state average of 10.4%. Thirty-two percent of the employment in the county is in the plastics industry, which also services the automobile industry.
The cost of operation in Laurens County is very attractive. Laurens County Council is very pro-business and offers aggressive tax reductions. For example, on a $2.5-million investment, the county can reduce the assessment ratio, thus reducing taxes by more than 40% for a period of twenty years.
In addition, the county also has the ability to offer a Special Source Revenue Credit that further reduces taxes for a period of 10 years. Laurens County is classified as a Level Two county by the state, which makes state incentives very attractive. In addition to these incentives, the county’s average wage is below the state average resulting in an even lower cost of operation. The State of South Carolina also offers one of the nation’s best training programs with ReadySC. This program is consistently one of the top-ranked training programs in the country.
Why locate in Laurens County? It is an excellent location with easy accessibility, a good available workforce, low cost of operation and a great rural community in which to raise a family. For more information, visit www.laurenscounty.org.
Irvine, CA: Where Masimo Corp. Found Inspiration
A device that measures vital blood characteristics without a needle, and patient monitoring sensors that maintain wireless contact with healthcare providers—some of the world’s most sophisticated and innovative patient-monitoring equipment and medical technology comes from Masimo Corporation.
This means that some of the world’s most sophisticated and innovative medical technology comes from Irvine, CA.
Founded in 1989 by Joe E. Kiani, who remains the company’s chairman and CEO, Masimo’s development of noninvasive testing and patient monitoring tools has garnered the company worldwide acclaim and consistent growth.
In August 2007, Masimo staged the most successful initial public offering from an Orange County company in years, raising $233 million, including $48 million for the company.
The company’s shares closed up 23% in its first day or trading and remains approximately 50% higher than its IPO price, despite the extremely difficult equity market over the past year.
Masimo has more than 1,700 employees and contractors, and advanced patient monitoring products in top hospitals and healthcare facilities worldwide, as well as breakthrough technologies inside 100 multiparameter monitors and 40 monitoring brands, including Atom, Datascope, GE Medical, Medtronic, Philips, Spacelabs, and Zoll. The company’s founder remains as committed to innovation and development as he did when Masimo was a private “garage start-up”—and remains equally committed to the city that is home to both himself and his company.
“We selected Irvine as a place to do business because it’s where we wanted to live. I always thought that wherever we start a business should be where we want to live the rest of our lives,” Kiani says.
As true now as 20 years ago, there is the added benefit that the nature of Irvine itself has provided Kiani and Masimo with the sorts of resources that an ambitious technology startup requires.
“Irvine has been a hotbed for technology and medical technology from the early days of AST and Western Digital, to the medical companies like Edwards and McGaw,” Kiani observes. “We’ve had tremendous access to resources, from engineers to businesspeople, that we gather not only from Orange County, but also San Diego and Los Angeles.”
And the available resources extend beyond Masimo’s offices, labs and campus. “A lot of the vendors that we need to work with have facilities here—either manufacturing centers or distribution centers locally,” Kiani observes.
“Everyone from integrated circuit companies to tooling companies to printing companies,” he says. “We have access to a lot of people who do a great job in manufacturing, business and engineering. They’ve been educated and trained here by many other companies before Masimo. Local universities like the University of California, Irvine, and Cal State, Fullerton, as well as schools in San Diego and Los Angeles, provide a rich pool of business professionals and very talented engineers.”
Another aspect of Irvine came into play as Kiani was starting Masimo: “Even at the early stages, when we had to rely on venture capital funds—there are venture capitalists here.”
While Kiani remains impressed with the local workforce, he also appreciates the appeal Irvine offers to those brought in from outside the city.
“I would describe Irvine not only as a place that has great weather,” he says, “but a place that is really a great combination of the good things that you feel in a small town, and a metropolitan city, teeming with an energy. It’s got that sense of newness that just wants to expand and grow. Once you come to Irvine, you grow with it.”
Nurturing that energy and growth has been as important to Irvine as to Masimo. Showing a 25-fold sales increase over the past five years, the company’s annual reports and quarterly statements reflect the success that comes from enthusiasm, brilliance and drive, but also from the ongoing success that comes from carefully managed and prudent expansion.
Likewise the city, named by the FBI as the safest large city in America for the fourth year in a row, was recently selected by BusinessWeek as one of the “20 Cities Best Suited to Withstand a Recession.”
Poised now for further success, Masimo and Irvine remain a perfect match, one that Kiani is happy to recommend to others.
“For companies that are looking to relocate to Irvine, or expand in Irvine, I would say that Irvine is going to continue to grow and grow again,” says Kiani. “That is why we chose to locate here and why we continue to expand and grow in Irvine.”
Growth without loss of focus or character is at the heart of Masimo and the city Joe Kiani chose as the home for his company and himself: “The environment that we get to be part of here in Irvine, where everyone has this constructive energy to move things forward in a positive way—I think it’s second to none.”
Rancho Cucamonga—A City That Always Stands Out
It’s no secret that companies of all types work hard at building a business that stands out in their industry. Since 1981, Rancho Cucamonga has worked hard to make the city stand out by meeting the diverse needs of businesses that choose to locate, relocate or expand there. Teaming with the business community, the Rancho Cucamonga Redevelopment Agency continues to provide substantial support that helps to ensure the growing success of businesses that choose to operate within the community.
The fear of encountering a shortage of qualified and talented employees is strong among businesses. Understanding this concern, Rancho Cucamonga has worked to make certain that businesses within the city have a well-matched local talent pool from which to draw—not just today but also in the years to come.
With the addition of many educational resources, including local colleges (a community college and two university satellite campuses) along with the internationally recognized Universal Technical Institute (automotive training), residents of and employees in the city have convenient access to earning a wide variety of degrees and certifications. The fact that the city is surrounded by well-known research-oriented universities and colleges, including the University of California, Riverside and the Claremont Colleges has influenced the overall interest in advanced training and education of people who live and work in Rancho Cucamonga.
In the past 13 years, several economic and quality-of-life factors have positively impacted the face of the workforce in Rancho Cucamonga. During that time the City has seen an influx of highly educated managerial, technical and executive level professionals who also have become residents. More than 25% of Rancho Cucamonga’s residents hold advanced degrees in a variety of disciplines. These residents also have a strong desire to work closer to home.
Along with a local talented workforce, Rancho Cucamonga offers an exceptional business environment including a diverse selection of Class A office space for lease and for sale. The selection includes some of the largest floorplates available in the area (42,215 square feet). This fact makes it possible for companies of all sizes to find a perfect fit for their unique needs.
The city is a major hub for manufacturing/R&D, distribution, and logistical operations. The city’s centralized location provides easy access to several major interstate highways, an international airport and the busiest container port in the United States. While they vary in size and operation, medical-related companies including Eyeonics Inc. (a division of Baush & Lomb), Amphastar Pharmaceuticals and Bio Calth International have found Rancho Cucamonga to be the ideal location for their businesses. To meet the needs of businesses and residents, the Rancho Cucamonga Redevelopment Agency administers a variety of economic development, redevelopment and housing-related programs.
A sampling of these programs and services include: Rancho Advantage, which provides principal department representatives that can advise new companies and business start-ups; services of a consulting electrical engineer to streamline and reduce costs during the electrical certification process; a Business Visitation Program, which brings together business owners and redevelopment staff to discuss business issues and opportunities; a First-Time Homebuyer’s Program to assist employees with purchasing homes in the city; and a GIS-based property site selection tool to assist in site location (www.InsideRancho.com).
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