6 Jan 2016
Chinese Suppliers Brave Red Tape to Target Argentine Medical Market
Despite off-putting import requirements, some 18 Chinese companies took the 24,500 mile round trip to exhibit at the ExpoMedical event in Buenos Aires, Argentina's largest trade show for manufacturers in the medical supplies industry.
With restrictive government regulations making it difficult for foreign companies to enter the market and stiff domestic competition in certain product categories, the medical sector in Argentina received a mixed diagnosis from exhibitors at Buenos Aires' ExpoMedical event. Although somewhat overshadowed by the neighbouring Brazilian market and stymied by both a sluggish economy and a seemingly dominant public sector, a number of international exhibitors saw clear opportunities in Argentina. This was particularly the case or several of the more price-competitive Chinese exporters.
Regardless of sector, there are tough obstacles to overcome before exporting to Argentina, most notably the issue of product registration. Unless the exporter has an office in the country, an Argentina Registration Holder (ARH) must be appointed to submit the application. This means a trustworthy partner based in the country is required for all such transactions and, even then, the approval process may take up to a year.
Many companies entering the Argentine market for the first time find the process far slower than they anticipated. One such novice was Yongkang Electronic Technology (Yonker). Based in Jiangsu, this was the first time the company had exhibited in Buenos Aires. Kathy Zhang, the company's Regional Manager for the Americas, said: "It is very hard to register to sell medical products here as there is a lot of paperwork. We have now found a local partner to help us register and, hopefully, this is just the beginning of our co-operation. People here seem to like our product, so we will be back."
A fellow Jiangsu company, Suzhou Sunan Zimmered Medical Instruments, began attending international exhibitions in 2012 and now exhibits at up to nine shows a year. Jane Chien, the company's representative in Buenos Aires, said: "Our biggest problem in Argentina is getting registered. It is like getting FDA [US Federal Drug Administration] approval, it can take up to a year and it costs a lot of money.
"We have to supply test results on all our equipment. It is important that we choose the right partner to work with on that."
All such product registration must take place via the Medical Technology department of ANMAT, the National Administration for medicines, foods and medical technology, (www.anmat.gov.ar) part of the Ministry of Health. To complicate things still further, the process differs depending on the type of medical product concerned.
This bureaucracy, however, had not deterred Jiangsu-based Saikang Medical from making the 24,500 mile round trip to the Argentinian capital. The company had, however, encountered many of the same problems as its competitors. Leon Chen, the company's Sale Manager, said: "This is a big country, but with a small population. We also need to register to sell our medical furniture here, so we are looking to find a local partner."
Aside from the obstacles to getting products into Argentina in the first place, a number of medical product categories also face stiff domestic competition. Overall, a substantial number of hospital beds, emergency carts, operating tables and patient transport trolleys are all manufactured locally. Addressing this particular challenge, Chen said: "Our product has a good price in China and we have to see what the price here will be after shipping and taxes. I have checked out the products of the local manufacturers and I believe our quality is better."
Of the 140 medical equipment suppliers exhibiting at this year's event, around a quarter were from outside Argentina. For those looking at other South American markets, ExpoMedical included a business matching service with medical distributors from Cuba, Peru, Nicaragua, El Salvador, Colombia, Guatemala, Paraguay and Bolivia all in attendance. Parallel to the exhibition, the associated conference included a talk by the Minister of Health, Professor Hugo Magonza, and a visit by the Minister of Industry.
The main exhibition entrance was dominated by Argentine companies. Five local manufacturers occupied a combined stand, jointly highlighting Baguette Anaesthesia, Faeta drying and sterilisation ovens, incubators, warming baths and mortuary coolers, FAICO surgical implements, Pettinari surgery tables, as well as Dinan X-ray machines.
Buenos Aires-based Dinan manufactures a variety of X-ray systems, from horizontal table workstations and vertical-tilting workstations with programmable radiology control system, to portable microprocessor controlled X-ray generators, with 80 pre-programmed routines for home or hospital use, Elizabeth Karina, a Director of the business, said: "This company was founded by my father and is 44 years old. In the past we have sold to Chile, Peru, Uruguay, and throughout South America. Now, though, the government is buying all our equipment.
"The Government used to buy from Siemens or Philips, but they can get two of our X-ray systems for the same price, without using foreign currency. It is also true that only the Government has money at the moment."
The event also had a strong representation from the Chamber of Argentine Hospital Equipment Manufacturers (CAEFHA), with most of its 100+ members having a presence at the show. Overall, the Argentine manufacturers demonstrated particular strengths across a number of sectors, including hospital furniture – notably beds, incubators and stretchers – and wheelchairs, with Alison, Metal Medica, Quiromed and Del Vecchio taking a lead in the latter segment.
Medical sterilisers and cleaning systems were also well represented, with the lead manufacturers here proving to be Mario del Giudice, Cleanson, Aitec Ingeneria, Hogner and Antonio Matacana. On the medical-related information technology side, the key local players are GS1 Argentina and Selis, with both companies showcasing their barcode bracelets and data systems.
Aside from the home team, the largest national presence came courtesy of a delegation of 18 Chinese suppliers. Collectively, they had on offer a wide range of medical equipment and supplies, including operating tables, motorised beds, surgical instruments, cotton and gauze bandages, rubber grommets, biopsy forceps, ultrasound imaging, electrocardiographs, fiberscopes and endoscopy instruments.
There was also a remarkable LED lighting system on show from Wuhan Yage Optical. This was said to be ideal for the treatment of neck pain, headaches and swellings and was described as able to improve blood circulation, relax the muscles and reduce inflammation.
Despite the difficulties of exporting to Argentina, the Chinese exhibitors were broadly positive. Estela Deng, Americas Sales Manager for Zhuhai-based Biolight, said: "The market here is promising, though not so attractive as Brazil, largely because of the smaller population and a number of economic issues."
The Brazilian market is, actually, about four times the size of that of Argentina. With 40 million people and GDP of US$560 billion, the Argentine medical equipment market, though, is still worth more than US$640 million, with 70% of that relating to imports (according to US government figures).
Acknowledging the potential of the market, Deng said: "Chinese companies clearly have opportunities here. We are very price competitive and our quality is improving, although that is an issue we need to continue to address."
One company clearly aware of the quality issue was Wuhan-based Landing Qomo. The manufacturer was attending the expo to showcase a number of products, but was particularly highlighting its automated cervical screening system. Explaining its suitability for the Argentine market, Tracy Liu, the company's General Manager, said: "The system is already being used in rural areas in China, areas where there have not previously been healthcare services of this kind."
The system is based on a DNA content analysis system, which looks at each cell on a smear slide and counts cancerous cells. Partially developed in Canada, it has been refined over many years of screening experience in Hubei.
Liu said: "We are partnering with the government of Hubei province which screens 500,000 cases per annum. Our laboratory in Wuhan is processing more than 100,000 cases annually by automated screening, with further manual inspection used to check positives and a proportion of negatives."
ExpoMedical was the 13th International Fair for Health Products, Equipment and Services held at the Centro Costa Salguero, Buenos Aires, Argentina. The event was held from 23-25 September 2015.
John Haigh, Special Correspondent, Buenos Aires