Company: ULCO MEDICAL
State: NEW SOUTH WALES
ULCO MEDICAL – MANUFACTURING IN INDIA
Ulco Medical is a Sydney based designer and manufacturer of high quality medical equipment, particularly anaesthetic and related machines. Ulco is currently establishing its first overseas manufacturing plant in the south of India.
Until 1997, about 40 per cent of Ulco’s sales were exports, with major markets in Thailand and Malaysia. However, the Asian financial crisis undermined these export sales significantly. This, combined with increased import competition in Australia, forced Ulco to look beyond their traditional markets and production strategy.
In early 1998, Ulco’s Managing Director first visited India. Initial contacts focussed on sales and distribution; while these were successful, Ulco’s prices proved too high to create a sustainable market. Hence, Ulco’s second trip to India focused on identifying a suitable partner to jointly manufacture their equipment for the Indian market. Ulco subsequently signed a joint venture agreement with a light industrial and engineering firm from Chennai (Tamil Nadu) in late 2000 and are finalising plans to establish an assembly plant in Pondicherry (south of Chennai).
Ulco identifies three factors critical to success in India. The first is the choice of a good local representative in the initial stages of researching the market. The second is considerable patience, particularly in negotiations. The third is choosing a business partner who is as committed to the venture and the product as the Australian partner and with whom the Australian company is completely comfortable. Without partner commitment, the normal risks of an overseas venture are greatly magnified. With just such a partner on board, Ulco considers the opportunities in the burgeoning Indian private health sector very promising and looks forward to developing its Indian business.
Source: Ulco Medical, 2001.