August 2016 : AMTZ Special Issue

AMTZ: On the Road of Creating World-Class Products

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Manish_Gangal

Manish Gangal
Vice President (Operations), AMTZ

In this first-of-its-kind medical device park, we are looking at a three-pronged strategy, including import substitution, export promotion and using the economy of scale to reduce the cost of healthcare, shares Manish Gangal, Vice President (Operations), AMTZ in an exclusive interview with Sudheer Goutham of Elets News Network (ENN)

Please share the details of Andhra MedTech Zone (AMTZ).

Overall, AMTZ will have two major areas. This includes the common scientific facilities that will comprise of high-end laboratories and the other part would be manufacturing units. The manufacturing area is totally dedicated to the manufacturers, who will have the complete freedom to choose their products and manufacturing processes. In total, we are aiming to host around 300 manufacturing units in the AMTZ.

Since manufacturers will be able to use the common facilities, the idea is not everyone needs to spend a lot of money or capital expenditure on machines or costly equipment. They can use the shared facilities to reduce the cost of manufacturing. Given that these scientific facilities are very capital expensive it may not make sense for manufacturers to invest in them individually.

What kind of measures have been undertaken to ensure quality across the products to be manufactured at AMTZ?

From the direction of quality, the Association of Medical Device Industry (AIMED) has already adopted a voluntary standard IC-MED which is in line with the global standards. Additionally, certain benchmarks have also been established to ensure that our products are at par with the world-class products.

All the scientific facilities in the AMTZ will provide certifications with proper documentation to the manufacturers stating that their products subscribe to international quality which includes those required for electromagnetic interference certification, radiation testing etc. Overall, the driving idea is to ensure cost reduction by providing common facilities to all the manufacturers.

Please provide details of other facilities to be established in the AMTZ.

As this facility is spread over 270 acres, there will be common areas in terms of administration, warehouse with a big parking facility, scientific facilities related to radiation and electromagnetic testing, and similar facilities. Additionally, there is a dedicated area for manufacturers. These areas have been determined in terms of functionality. Each area will support a dedicated function.

In the entire AMTZ project, what will be your role & vision?

Please specify. Looking at the scale of the project, a lot many people will have to share many responsibilities. We need to ensure that these facilities are monitored for its functionality. As such, we are going to operate most of the things in the public“private partnership (PPP) mode. The entire project involves other people who need to be oriented towards the AMTZ vision. My goal will include monitoring of all these functions.

What are the key benefits of AMTZ for the entire Indian medical device industry?

AMTZ is a limited company, with 100 per cent of ownership with the Department of Health, Government of Andhra Pradesh. In terms of medical devices, we still witness a very scattered approach across the Indian market, mostly labour-intensive products or technologies with low spectrum. Overall, we need to learn how to become self-reliant on technologies that are of a high spectrum. The provision of common facilities is one of the most important factors that can address the above challenge, otherwise at an organizational level, manufacturers need to bear huge capital expenditure. We can prevent such a huge expenditure and even simultaneously ensure that they get to use the common facilities. There are dedicated parks in other countries, such as Germany and China, and smaller parks in Taiwan and other countries. However, looking at the size of the requirement, the AMTZ will offer a great opportunity for self-reliance and to reduce the cost of healthcare to the common patients.

Additionally, about 75 per cent of the medical devices (consumables) are imported. Therefore, there is a lot that can be done through import substitution, which is close to Rs 20,000 to 25,000 crore. At the same time, we have export potential, which is close to Rs 6,000 to Rs 7,000 crore. If we are manufacturing globally accepted qualitative products by ensuring cost reduction, it will definitely assist us in terms of improving our export performance.

Key Features – Andhra MedTech Zone (AMTZ)
  •  Includes two major areas – common scientific facilities & laboratories or scientific testing
  • Expecting 100 to 200 manufacturers
  • Has established benchmarks to manufacture world-class products

If we have good import substitution and export potential, we can benefit from the scale of economy, which will also reduce the availability of products for the domestic market. Thats the reason, we are looking at a three-pronged strategy, including import substitution, export promotion and using the economy of scale to reduce the cost of healthcare. It is first-of-its kind medical device park in India. At this particular point in time, the import and export figures together are in the range of Rs 25,000 to Rs 30,000 crore.

The import of medical devices ranges from consumables to high-end machines, everything in between. Therefore, our dependence on import is very high from the angle of all products. As each product requires its own specific machines, trained pool of people, etc., at AMTZ, we would give facilities that are common and certifications that are easy. Its not going to be very capital-intensive activity for the manufacturers.

 Cost Reduction in Manufactured Medical Devices
 Constituents of product costs  Factors aimed at reducing the cost
Comprehensive Ecosystem, Suitable for
Medical Devices
Costs Associated with Sourcing
Components, Software, FirmWare
and Such Services
 On-Site Showrooms/Offices for
Suppliers, Developers, Experts and
Solution Providers
Machines & Skilled Labour Common Scientific Facilities,
Operated by Skilled People on Pay
for Use Basis
 Costs Associated with Design/Trials  On-Site Design & Rapid Prototyping
Facility
Cost of Infrastructure Developed Land with Ready to
Move-in Structure at Nominal
Charges
 Sterilisation On-Site Sterilisation, Including
Gamma Irradiation Facilities
 Testing & Certifications Costs,
Logistics and Delays
On-Site, Cost Effective Accredited
Test and Certification Facilities
Cost of Warehousing On-Site Common Warehousing with
Cold Chain
Logistics Costs Proximity to Rail, Road, Air and Port
Facilities
Costs Associated with Client
Education, Training
On-Site Expo Hall and Convention
Center

What is the vision of the State Government on the entire AMTZ project?

The Government wants to see Andhra Pradesh as the manufacturing hub of medical devices in India and globally producing world-class products benefitting the entire humanity. The land has already been given to AMTZ. The AIMED has already has pledged its support to the AMTZ project.

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