Malaysia

The development of Malaysia's healthcare sector slowed during the Asian economic crisis due to a fall in domestic consumer demand and the devaluation of the Malaysian ringgit, but certain areas are now growing at the same rate as they had had been pre-crisis. One example would be the pharmaceutical market, which was valued at $500 million in 2001.

With the population expected to rise to 32 million by the year 2020, the combined effects of improved life expectancy (the elderly are expected to comprise over 7 percent of the population by 2020), a larger workforce and increased population density in urban areas are expected make stronger demands on Malaysia's health care system.

In anticipation of this, a total of $1.4 billion is being allocated towards the improvement of health services for the period between 2001-2005 under the Eighth Malaysia Plan.

Hans Peter Brenner, president of B Braun Asia Pacific

With this market environment, which for the most part is still supplied by imports, Malaysia is seen to remain a profitable and competitive market for healthcare products and services.

From a slightly different perspective, B Braun is an example of a multinational company, which has not only found a market for its products here, but more importantly, determined Malaysia to be a good center of operations for its many offices within the region.

A commitment to medicine

Over 160 years of experience in the production of quality medical products has made B Braun one of the most trusted names in its field. At present, its worldwide network operates 120 offices spanning 50 countries throughout the globe, with a formidable position in the world market for medical, pharmaceutical, surgical and dialysis products.

Three decades ago the company chose Penang, now known as "Asia's Silicon Island", as a strategic location for one of its production sites. Today, operations in the West Malaysian state have evolved into regional headquarters for B Braun's businesses in the Asia-Pacific region. It coordinates the company's business development and marketing activities for the entire area.

Also located here is the B Braun Group's largest manufacturing site in the world, making Penang a major production hub for B Braun and Aesculap -- the surgical instrument maker with which the company merged in 1997. Not only is a bulk of the group's production done from the coastal city; a large number of its exports originate here as well. Among these are USFDA approved items produced in Malaysia for Europe and the US.

Hans Peter Brenner, president of B Braun Asia Pacific, enumerates the benefits of operating here, such as the good infrastructure and the educated, English-speaking labor force. He goes on to discuss the challenge of remaining competitive in the area of manufacturing in Malaysia while competition among locations for assembly activities in the region continues to intensify.

"One of the main reasons we are here is for manufacturing and we will remain here," he declares. "What we have to do is upgrade the value chain into such things as R&D and design activities, and the automation of manufacturing. A good example of this is our new range of safety products which we have just started to produce here for export to the US and Europe."

"For this we made a calculation: comparing a fully-automated line and investing in the US with a so-called semi-automated line here in Malaysia. The results were clearly in favor of the investment here. This is a good sign. It is for reasons such as this that we are committed to investing in this location."

Brenner asserts that for the long-term, prospects remain very positive for the B Braun Group in Malaysia and in the Asia-Pacific region in general -- where the group has invested very heavily. It is expected to remain a growth region for the group well into the next 20 to 30 years.

"Healthcare grows everywhere, even in countries like the US where 14 percent of GDP is used for healthcare and still increasing," he concludes. "Compare that with Malaysia where it makes up just 3 percent of GDP. You can see the large growth potential for this segment. That strengthens our commitment here."

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