MedTecs: A Healthy Exercise in R& D, Manufacturing and Profitability

By DavidMonson William Yang, General Manager of MedTecs Never the most cheerful thought the prospect of a layover in a hospital. But prospective patients should take heart-Taiwan's MedTecs International Corp. Ltd. ("MedTecs") has brought a new line of hospital apparel that could make any passage through an operating theatre, the wards or private rooms a more fashionable, even colorful, experience. A visit to the showrooms at MedTecs HQ in Jonghe City, almost roomy enough to accommodate an NBA championship match, bears out General Manager William Yang's confident opening remark: "We want to become the leader in service, supply and products-a one-stop shop for medical apparel, masks and other items." The showrooms boast an assortment of fabrics. Garments, hospital linen, surgical masks, caps and gowns in floral designs and all necessary flaps and opening for discreet medical examination. Not to mention, if you happen to accidentally stumble over them, thermostatically controlled, "high- end and low-end" body bags. A quite lavish display that sums up Yang's pragmatic and long-term approach to the business that has fallen, not altogether accidentally, into his own youthful yet competent hands. Age is not necessarily the measure of a man in a high place today. William Yang fits his elevated position as smoothly as any one of his company's surgical gloves, shoe covers or masks fit the needs of their users. And it doesn't take much prodding for this scion of a quite short line-he represents the second generation of Chinese entrepreneurs from the Philippines-to warm to his subject. Within the space of a little more than two decades, MedTecs, started by his father Clement Yang, now straddles three continents with ten factories "strategically located in relatively low-cost countries" and a multi-million dollar turnover. "Even in a bad year, like 2009, MedTecs was aware of how the 'lingering effects' of the U.S. sub-prime crisis would impact demand for its products and services," said Clement Yang, Chairman of the MedTecs Group, in the Annual Report. The Group strived to focus its attention on maintaining profitability for all stakeholders. As a result, although group revenue declined 29.7% to US$56.7 million, its gross profit was hardly affected and net profit more than doubled to US$2.1 million. Astute financial management this most certainly is but it hasn't been all about chasing markets or fortunes. "We've built our company on solid research and development," the son enthuses. He gets on well with his father, the Group Chairman, although admits, "we sometimes differ on business strategy, on how we should advertise or enter a new market or make an investment. His interests are broader than mine. While I want to concentrate more on the business of MedTecs, he looks at the big picture." An end-user could hardly be aware of the huge chunks of laboratory time invested in the making of a surgical mask. And here William likes to quote the most recent H1N1 flu epidemic, the one that had the world in panic mode not so long ago. Before mainstream manufacturers were jumping aboard the N95 (U.S. standard) or FFP2 (European standard) bandwagons for making the masks that either helped keep the virus to yourself or prevented you from picking it up from someone else, MedTecs had done its homework. Back in 2007 it has been awarded CE certification for its products. "We were able to manufacture and sell right away, which gave us a big jump ahead of the game." "After all, manufacturers are not experts," Yang explains, "so when H1N1 broke out the majority of them just followed the European or American standards, which clearly set out the level of protection you should expect from a mask like this. These are the most widely demanded products and manufacturers aim to meet these standards before they can sellNIKE SB