Bill Gerard, President of Providien recently spoke at 10x The Medical Device Conference and presented Providien Medical’s capabilities. This is a summary of what was shared. (a video of his comments is embedded at the bottom of the page).
We’re a device Contract Manufacturing Organization (CMO) with a presence in Southern California and northern Mexico.
Synergies and Lower Costs
The mergers & acquisition activity in the medical device space has exploded in the last five years.
We’re approaching three hundred and fifty billion dollars.
Now, the prime motive behind that is to create shareholder value. And part and parcel to that is to find ways to gain synergies and lower costs.
That’s where our Medical Device Contract Manufacturing comes into play.
Providien pretty much covers the entire medical device industry. We literally have more than 7500 SKUs ranging from small titanium screws for surgery plates all the way up to full Class-Three Medical Devices.
We have four locations in Southern California, with locations from Los Angeles all the way down to a facility in Tijuana, Mexico which has about one thousand employees. Many people have no idea Providien is this big. We have about 1400 employees in total.
Who Should Outsource to Providien
With all of the M&A activity, companies like Covidien and Medtronic should. When they look through their suite of manufacturing locations realize that they have 175 injection molders.
They’ll most likely decide to pare that list down. But rather than just using a company that only does injection molding, we’ve seen tremendous growth when they look for a CM that has multiple verticals.
The scenario looks something like this:
Let’s go to Providien and get our injection molding done.
Then they can ship it down to Tijuana and put it into a final device (assembly).
They can also send it and manage it all the way through packaging.
In many cases, they can do a machine component at their Los Angeles facility.
Then ship it down, insert mold it, etc.
Once again our suite of products really cater to the large OEMs. We’re filling a necessary niche.
Contract Manufacturers in the US
There are hundreds of contract manufacturers in the United States. But what we’ve seen is a
tremendous dichotomy. Over the last seven or eight years, we’ve seen a handful grow to become multi-billion companies: some $10 billion, and one, in particular, $32 billion
There are also a tremendous number of small regional, mom-and-pop, type of manufacturers. We found that having that $100 to $300 million space gives Providien the breadth and the bandwidth to bring capital and to bring resourcing to the equation. Yet we can avoid becoming cumbersome and difficult to work with.
What Type of Contracts Fit With Providien?
We find we don’t want to take on the really large $25 to $35 million programs. As a $150 million CM that’s a little bit more than we’re resourced,
We also tend to stay clear of things like implantables.
We do work on Class Three medical devices, but there’s “Class Three” and then there’s “CLASS THREE.”
We like to stay in that medium complexity area that will generally fit in the size of your hand— relative to working on full devices.
On the component side, we make parts that are all the way up to five- feet by eight-feet large: plastic enclosures for radio-oncology.
The Range of Providien’s Capabilities
Any contract manufacturer will tell you that the earlier we can get involved in the process the better.
We do partner with literally half a dozen design firms all the way from the U.S. to Australia.
We also have internal industrial and mechanical design resources to serve customers.
It’s interesting that some of the largest customers will come to us and say, “My marketing guys are telling me I have a new product line but I’m not resourced to develop it, can you help?”
Our response …. “Sure we can!”