Prospettive e tendenze del ramo medtech in

Corea.

2

Agenda.

2

• Land Area: 99'678 km2 (108th)

• Population: 48.6m (24th)

• Birth Rate: 1.2

• Capital: Seoul (9.8 mil)

• 16 local governments incl. Cities & 9 provinces

• GDP: 1,164 Bil USD (15th)

GDP/ppp: 1,549 Bil USD (12th)

• GDP/capita: 20,591 USD (34th in 2010)

GDP(ppp)/capita: 31,700 USD (26th)

• GDP Growth: 3.6%

• Trading volume: 1 Tri. USD (9th)

• Inflation (CPI): 4%

• Unemployment rate: 3.4%

• Global Mfng Competiveness index

: 3rd (2010)

• Politics: Presidential system

2 elections in 2012

• Religions: Atheists (47%)

Christians (29%)

Buddhist (23%)

Source: www.eiu.com 2

Seoul 1961

Seoul 2013

5

Korea as it is known.

• 4th largest economy in Asia

• 7th exporter / 20/50 club

• Gateway to China, Japan and SE Asian market

• Attractive domestic market

• Test market for Asia

• High-tech infrastructure

• EFTA FTA – no tariff barriers

• Employing cutting-edge technology in production

from mobile phone to ships

• Quick decision-making, driving force

• Innovation capabilities

• Good market environment – stable legal basis,

FTAs, well trained staff, predictable economy

• 8th in business environment (out of 183 countries)

- 2012 Doing Business Report by World Bank

Growth rate of the Korean Economy

Copyright © Osec 2009. All rights reserved.

Korean companies‘ performance

Copyright © Osec 2009. All rights reserved.

8 <Source: IMF, BOK, KGCCI >

Asian Financial Crisis

Unit: USD

Global Finanical Crisis

Korea GDP per Capita.

9

Korea - From Yesterday to Today

1960s 1970s 1980s 1990s 2000s 2010s

Development Stages

Factory Driven Investment Driven Innovation Driven

Light

Industries

High-Technology

Innovation

Technology

Intensive

Heavy &

Chemical

Industries

Knowledge

Based Industry

Sophistication

& Value Added

Korean Exports

11

Korea as it is not known.

12

• Swiss capital stock in Korea in 2010: 4.8 bn. CHF

• FDI from Korea into Switzerland: USD 188 Mio (+ 121%)

• More than 100 JV and subsidiaries have been established in

Korea covering the traditional sectors of Swiss excellence

• Personnel at Swiss companies in Korea: 9’900 persons

• Trade volume 2011: CHF 2.813 bn.

• Switzerland has trade surplus of CHF 1.8 bn.

(exports to ROK 2011: CHF 2.31 bn.)

Economical Interests of Switzerland in Korea.

Key factors of the Korean market

• Very qualified and well educated labor

• High industrial capacity (and again speed…)

• Korea not known in Switzerland and Switzerland not

known in Korea (only small, innovative country not

known)

Copyright © Osec 2009. All rights reserved.

14

Korea opens more and more.

14

In effect Concluded Underway On the agenda

Chile, Singapore, EFTA, ASEAN, India, EU, Peru, USA

Turkey

Canada, Mexico, GCC, Australia,

New Zealand, Colombia, China

Japan, Korea-China-Japan,

MERCOSUR, Russia, Israel, Vietnam, Mongolia, SACU, Central America, Indonesia,

Malaysia (Source: www.fta.go.kr, Ministry of Foreign Affairs and Trade)

Medtech Industry in Korea

South Korea: Aging Tiger

Korean National Medical Expense Ratio

• Korea: 6.9 (% of GDP)

• OECD: 9.6

• UK: 9.8

• Germany: 11.6

• France: 11.8

• Korea ranks lowest in

OECD

• Chart: Health Expenditure over 65

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Korean Medtech Industry - Overview

• Medical Device Industry Trend

– Paradigm Shift : From Treatment to Prevention

– Industry Technology Trend : The development of IT, BT, NT led into

value added convergence of advanced medical technology.

• Market Size:

– > 3,8 billion USD( 2011)

– Market Size in KRW has been continuosly increasing since 2004.

• Import Market:

– Import > 2,5 billionUSD (2011)

– Import Dependency : 65%

– Top 5 import products by value : stent, contact lens, CT system, MRI

system and artificial knee joint

18

Korean Medtech Industry – market trend

• Due to the weaker dollar in 2006 and 2007, the figure looks like the market has

been decreasing in 2008 and 2009, however, the actual market size in KRW has

been continuously increasing.

(million USD)

19

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2004 2005 2006 2007 2008 2009 2010 2011

Production Exports Imports Market Size

Korean Medtech Industry - characteristics

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• Characteristics of Korean Medtech Industry

– Vulnerable Industry Structure

– Immature Technology Level : Domestic medical products are generally

targeting low-priced market

– Chronic Trade Deficit (848million USD, 2011)

– IT Convergence Medical Information System such as PACS is

consistently increasing towards advanced countries.

– Conglomerates Entering into Medical Device Market

(e.g. Samsung, SK and LG)

Untransparent rules

Swiss companies in Korean medical device market

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• Overview

– Swiss products’ market share : 4.6% of Import Market (10th)

– Top 5 Product groups by Value :

Orthopedic Materials, Dental Materials, Human Tissue & Its Function

Replacement , Clinical Thermometric System Instruments

– Top 5 companies by Value :

Synthes GmbH, Cendres+Métaux, Key Tronic Coporation,

Medtronic Europe Sarl, STAAR Surgical AG

– The 90% Swiss’ export of medical device is concentrated on top 30

companies

Opportunies in Korean medical device market

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• Prospective Products

– Emergency & Trauma Treatment Products

– Disposable Products

– Products Not Available in Korea

(e.g. linear accelerator, digital X-ray, clinical pathologist

diagnostic devices, endoscope, and microscope)

– Rehabilitation Devices

– Minimal Invasive Operation Products

Recommendations for Swiss companies

23

• Suggestions and Recommendations for Swiss Companies

– Understanding of Regulatory Requirements (KFDA)

– Preparation to GMP Inspections for Manufacturing Site

– Preparation to IEC 60601 3rd Edition

• Opportunities for Swiss Companies

– Market Entry through Multi-National Clinical Trial

– Strategic Alliance through OEM with Korean Medical Device

Manufacturer *

– Technical Partnership with Korean Medical Device Manufacturers

Important to know

• Be aware of cultural differences

• Less planning than Swiss and getting to solutions more rapidly

• Hierarchy dominated society (from A to Z)

• Pace of communication very rapid

• Be prepared (do homework, hire a lawyer, et.)

• Take time to study the market

• Talk with others / important to learn from somebody else

experience (experts, other companies. etc.)

• Start (open doors) rather difficult but when it works can get very

lucrative

Copyright © Osec 2009. All rights reserved.

Korea Medtech Study (75 pages)

• Medical Device Industry Overview

(Trend, Overview, Outlook)

• The Role of Government

(Organisations, Management system,

Regulations, Import Procedures)

• Korean Medtech Sector

(Hospital, Dental, Orthopedics & Trauma,

Disposables , Instruments, Rehabilitation

Machines, Laboratory & In-Vitro

Diagnostics, Ophthamologic Devices)

• Opportunities for Swiss SMEs

(Companies, Suggestions & Opportunities)

• www.osec.ch/de/blog/osec-marktstudie-

medtech-industry-koreamendations

Swiss Medtech Delegation to Korea

• Quando: 13 - 16 ottobre 2013

• Scopo: - dare la possibilità di familiarizzarsi con il mercato

coreano (attori, imprese, associazioni,

regolamentazione, ecc.)

• Programma: - seminario con partecipazione di specialisti coreani e

imprese svizzere in Corea

- visita ad imprese (piccolo/medie e conglomerati-

Samsung)

- visita di un parco Medtech (Taegu)

- serata di networking

Shanghai / Hong Kong

Swiss Business Hub services

• Providing up-to-date market-relevant information and product data

• Assisting companies who are seeking distributors, representatives and

import partners

• Individual consulting for small and medium-sized enterprises

• Assistance to SME’s participating in trade fairs and reporting on these

events

• Information about the Korean economy and market via the central

information platform at Osec Business Network Switzerland

• Organizing promotional events for Swiss industry and providing media

access

• Providing information on the Swiss economy to Korean companies and

media

Domande?

28

29

Claudio Mazzucchelli

Executive Director

Swiss Business Hub Korea

Embassy of Switzerland

Seoul, Republic of Korea

32-10 Songwol-dong, Jongro-gu, Seoul 110-101

C.P.O. Box 2900, SEOUL 100-629, Republic of Korea

Phone +82 2 3704 4741

E-Mail claudio.mazzucchelli@eda.admin.ch

Web www.osec.ch // www.poolofexperts.ch // www.eda.admin.ch/seoul

29

The Roots of Korean Management

32

Strengths Weaknesses

SWOT Analysis.

• World leader in flat screens, memory chips, batteries shipbuilding

• Excellent IT infrastructure

• Very open to new technologies (especially in telecommunication)

• High reserves in strong currencies

• International competitiveness limited to some companies and sectors

• High dependence from foreign technologies and components

• Low productivity in service sector

• Contradictory administrative rules and little transparency

• Occasionaly very hard labor conflicts

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Opportunities Threats

SWOT Analysis.

• Large scale investments in R&D

• FTA with EU, US and potentiallyChina

• Proximity to Chinese market

• High reserves in strong currencies

• Strong export dependence from few markets and producs groups

• Now row materials and depending from energy imports

• Political instability in the peninsula

• High debt of private households and partially high companies debts

• High short term debt, especially banks

34

Korea Switzerland

Korea and Switzerland - Companies & Economy.

• Conglomerate (Chaebol) dominance

• Focus on manufacturing and export

• Competitive IT infrastructure

• Hierarchy in daily business

• Distinct business etiquette (dress, greeting, contracting)

• “Bally bally” attitude

• “Can do” mentality

• Loyalty towards company often for

a life time

• Swiss SME dominance in economy

• Strong services industry

• Lag behind IT developments

• Bottom-up or team based proceeding

• Less formal and standardized rules

• Longer decision making process

• Worker fluctuation seen as normal

Ratio working / non working