The Medical Device Industry in Mexico
Business Intelligence Unit 2015
Index
1.  Healthcare Providers
2.  The Medical Device Industry in Mexico
§ 
Industry Indicators in Mexico
§ 
Production and Consumption
§ 
Mexico's International Trade
§ 
Foreign Direct Investment (FDI)
§ 
Companies
§ 
Supply Chain
3.  Pharmaceuticals
§ 
Industry Indicators in Mexico 2014
§ 
The Pharmaceutical Industry in México
§ 
Production and Consumption
§ 
Mexico’s International Trade
§ 
Foreign Direct Investment (FDI)
§ 
Companies
4.  CostS
Healthcare Providers
• 
In 2014, The Mexican healthcare providers sector reached a value of US$79.3 billion. Its
CAGR between 2010 and 2014 was 6.3%.
• 
It is expected that between 2014 and 2019 the Mexican healthcare providers sector will grow
at a CAGR of 6.1%, reaching a value of US$101 billion in 2019.
• 
Outpatient care was the largest segment of the health care providers sector in 2014,
accounting for 37% of the sector’s total value.
Healthcare providers by segment 2014
Healthcare providers sector projections
CAGR
2013-2018
6.1%
CAGR
2013-2018
4.1%
CAGR
2013-2018
5.9%
Segment
2014
(billions of US
dollars)
%
Outpatient care
29.3
36.95%
Collective services
23.8
30.01%
Inpatienrt care
15.9
20.05%
Medical goods
10.1
12.74%
Long- Term care
0.2
0.25%
Total
79.3
100%
Source: Marketline
1. Medical devices
Business Intelligence Unit 2015
Industry Indicators in Mexico
Production 2014:
US$15.2 billion
Consumption 2014:
US$11.9 billion
Compound annual growth
rate (CAGR) 2014-2020: 5.3%
CAGR 2014-2020: 2.4%
Economic units* recorded in 2015: 2,344, located
Total employees 2014:
148,266 people
mainly in Baja California, Chihuahua, Coahuila, Distrito Federal,
Estado de México, Jalisco, Nuevo León, Sonora and
Tamaulipas
Number of exporting companies in 2014:
655
Main investor countries in 2014:
US, Germany and Italy
Exports 2014:
US$7.7 billion
Main exports:
Medical, surgical, dental or veterinary instruments and devices;
orthopedic articles; mechano-therapy appliances; surgical
furniture; and apparatus based on the use of X-rays.
Sources: Global Trade Atlas, Global Insight,
INEGI and the Ministry of Economy
Production and Consumption
Consumption
Production
Production in the sector reached US$15.2 billion in
2014, and is expected to record a 5.3% CAGR in
the 2014-2020 period.
Consumption in the sector reached US$11.9 billion
in 2014, and is expected to record a 2.4% CAGR in
the 2014-2020 period.
The industry accounted for 1.7 of manufacturing GDP
Medical device consumption in Mexico
2010-2014 (millions of US dollars)
and 0.3% of total GDP.
CAGR 2014-2020:
2.4%
Medical devices production in Mexico
2010-2014 (millions of US dollars)
12,161
13,443
14,188
14,339
15,220
9,841
2010
2010
2011
2012
2013
10,303
10,304
10,543
2011
2012
2013
11,912
2014
2014
Added value ---- Disposable was 20% / electronic devices was 36%
Inputs from foreing countries---- Disposable 32.3% / electronic devices 91.7%
Source: INEGI, Global Trade Atlas and Global Insig
Mexico's International Trade
• Mexico's main trade partner in the sector is the US, with 92.5% of
its exports going to that country and 62.7% of its imports coming
from
it.
• In 2014,
the main products exported from the sector were medical,
In 2014, Mexico exported US$7.7 billion,
ranking as:
9th
1st
Main products exported by Mexico in 2014
•Largest exporter in Latin
America
1st
•Main supplier to the US
Mexico's international trade of medical
devices 2006-2014 (million USD)
4,048 surgical, dental and veterinary instruments and devices.
•Ninth largest exporter of medical
devices worldwide
4,560 5,064 5,138 6,343 5,798 6,072 2007 2008 2009 Exports
Imports
Balance of Trade
2010 2011 2012 7,699 6,886 2013 Source: Global Trade
Atlas
% 5,841 75.9% Orthopedic items and devices 795 10.3% Mechano-therapy, respiratory therapy
and massage devices 471 6.1% Other 592 7.7% Total 7,699 100.0% Medical, surgical, dental and
veterinary instruments and devices 3,745 3,188 3,473 3,032 2,489 2,782 3,954 2,159 2,183 2,448 3,413 3,040 3,155 3,016 2,649 2,377 2,616 1,889 2006 Exports (millions of us
dollars) Product 2014 2nd
4th
• Second largest exporter globally of tubular needles for
sutures.
4th
•Fourth largest exporter globally of surgical furniture.
4th
•Fourth largest exporter globally of syringes, catheters
and similar instruments.
Source: Global Trade Atlas
Foreign Direct Investment (FDI)
Foreign Direct Investment into the sector reached an accumulated amount of US$1,689
million for the period 2005-2014. The main investor countries were U.S., Italy, Germany, Spain
and Netherlands. In 2014, total flows of FDI into Mexico reached US$150 million.
FDI Share by investor country in 2014
7 5 5 2 France Finland Brazil 2 Cuba 14 Sweden Germany 28 Netherlands 88 Italy United States 101 Spain January 2005 - December 2014 (million usd)
1,494 Source: Ministry of Economy
Foreign Direct Investment (FDI)
Investment announcements in
Mexico between 2010 and
2015/1:
Companie
s
Betting on Mexico...
Capital Investment
(millions of US
dollars)
No. of Companies
172
12
Iceland
48
1
Canada
11
1
New Zealand
3
1
Germany
3
1
Colombia
2
1
Country
U.S.
17
Projects
19
13 Expansion Projects
6
Jobs
6,37
5
Main Destinations:
Guadalajara, Tijuana,
Nuevo Laredo and
Matamoros.
New investments
Source: FDI Markets.
1/ Latest figures available: March 2015
Foreign Direct Investment (FDI)
Investment announcements in Mexico between 2014 and
2015:
Betting on Mexico...
Country
Investment
(Millions of US
dollars)
JOBS
Project type (New
investment or
Expansion)
Description
Mar-­‐15 Medline U.S. n.d. n.d. Expansion US-­‐based Medline Industries has expanded its plant in Nuevo Laredo, Mexico. The company's second expansion at its facility, located at the Oradel Industrial Park, has an addiUonal 20,900 sq m and will allow the company to increase staff levels to 1,800. Sep-­‐14 Baxter U.S. 30 669 Expansion The Mexican division of Baxter will invest $30mn at its plant in Cuernavaca, Mexico. The facility will increase producUon capacity by 40% and is likely to generate new employment opportuniUes in the region. Jul-­‐14 CareFusion U.S. 6 100 New investment CareFusion has invested $6mn to expand its faciliUes in Tijuana, Mexico. The company will create 100 new jobs to increase its medical devices producUon from 1 to 1.5 million units daily to serve the US market. Date
Company
B. Braun Jul-­‐14 Melsungen AG Jun-­‐14 Phase 2 Medical Manufacturing Feb-­‐14 Pexco Feb-­‐14 Surgical SpecialUes Feb-­‐14 Fisher & Paykel Healthcare Jan-­‐14 Mediimplantes Germany 3 68 Expansion Germany-­‐based healthcare company B. Braun Melsungen will invest $3 mn to expand its plant in Santa Cruz AUzapán, Mexico. The company will build a 1,400 sq m logisUcs complex and will triple the producUon space by installing a line to manufacture spine implants. The expansion is scheduled for compleUon in the first quarter of 2016. U.S. 1 20 New investment Phase 2 Medical Manufacturing, a contract medical device manufacturer, has opened a new producUon facility in Tijuana, Mexico. The 2,790 sq m facility has created 20 new jobs. U.S. N.A. N.A. Expansion Canada 11 900 New investment Surgical SpecialUes, subsidiary of Angiotech PharmaceuUcals, plans to open a new manufacturing facility in Tijuana, for producing blades and sutures for surgical use. New Zealand 3 74 Expansion Fisher & Paykel Healthcare(designer and manufacturer of respiratory care devices) will invest $3.3 mn to expand its manufacturing facility in Tijuana. Colombia 2 120 New investment Mediimplantes (manufacture of spinal implants and surgical instruments) plans to establish a $1.6 mn facility in Guadalajara, scheduled to be operaUonal in 2014. Pexco (medical plasUcs processing) plans to expand its facility in Mexicali. The expansion is expected to be completed by August 2014. Source: FDI Markets.
Companies
In 2014, 2,344 economic units* specialized in medical
devices had operations in Mexico.
The same year, approximately 655 companies reported
exports.
*Includes companies, plants, commercial and sales
offices
Source: INEGI and Ministry of Economy
Baja California:
•  Location of Mexico's main medical
devices cluster.
•  Accounts for 33% of the country's
total exports in the sector.
•  Has 189 economic units and over
80 companies that export medical
devices.
Source: ProMéxico with data from the Ministry of
Supply Chain
Industrial Processes
There are several companies that provide important
processes for the medical devices manufacturing industry in
Mexico, which are located mainly in Coahuila, Nuevo León,
the State of Mexico, Chihuahua, Puebla, Tamaulipas,
Durango and Mexico City.
Foundry
102 companies
Machining
310 companies
Mechanical Assemlies
221 companies
Electronics
One area of the electronic industry takes
care of the manufacturing, assembly and
incorporation of electronic components into
medical devices.
Leading global electronic manufacturing
services providers (EMS) have operations
in Mexico.
Company die casting
50 companies
Plastic injection Molding
114 companies
Source: ProMéxico
Die-Cutting and Stamping
225 companies
Thermal Surface
Treatments
160 companies
Country of origin Presence in Mexico Chihuahua, Baja California and Tamaulipas Foxconn Taiwan Flextronics Singapore Jalisco, Chihuahua and Aguascalientes Jabil US Tamaulipas, Jalisco and Chihuahua CelesDca Canada Nuevo León and Tamaulipas Sanmina US Jalisco Plexus Brazil Baja California Wistron Taiwan Chihuahua Source: ProMéxico
Costs
Costs
Mexico offers lower operation and labor costs for every level of specialization, as well as lower manufacturing costs for medical
equipment, electronic devices and precision components, in comparison to countries that are representative of the industry.
Mexican Offer
Index of savings on medical device manufacturing costs 2013 Germany U.S. 0.2% 0.0% Australia -­‐0.7% Japan -­‐1.1% Italy -­‐2.6% France -­‐2.8% U.K. Netherlands -­‐4.2% Canada -­‐5.0% -­‐5.4% Canada U.K. Mexico Compared to the US, Mexico offers
18.9% savings on manufacturing costs
for the medical device industry.
-­‐18.9% Source: KPMG, Competitive Alternatives, 2014
Index of savings on precision component manufacturing costs 2013 Germany Italy U.S. 1.1% 0.5% 0.0% Australia -­‐0.1% France -­‐0.7% Japan -­‐1.5% Netherlandas -­‐1.9% -­‐3.1% 0.0% Germany Japan Italy Australia France U.K. -­‐4.6% -­‐6.4% -­‐6.7% -­‐10.0% -­‐11.9% -­‐14.3% Compared to the US, Mexico offered
7.8% savings on manufacturing costs
for precision components, making it a
globally competitive country.
-­‐3.4% -­‐7.8% Index of savings on electronic systems development and tesDng costs 2013 U.S. Mexico Source: KPMG, Competitive Alternatives, 2014
Canada Netherlands Mexico -­‐18.5% Compared to the US, Mexico offered
39.3% savings on product testing.
-­‐20.0% -­‐39.3% Source: KPMG, Competitive Alternatives, 2014
1. Pharmaceuticals
Business Intelligence Unit 2015
Industry Indicators in México 2014
Production 2014
US$11,430 million
CAGR
2015-2020
8.7%
Imports of the pharmaceutical
industry
US$4,939 million
Foreign Direct Investment
(FDI) 2005-2014
US$3,172 million
Consumption 2014
US$16,916 million
Main investor countries in the
sector United States, Ireland
and Spain
CAGR 2015-2020
8.4%
Companies in Mexico
MSD, Boehringer Ingelheim,
Schering Plough, Bayer,
AstraZeneca, Pfizer and
GlaxoSmithKline, among others.
E x p o r t s o f t h e
pharmaceutical industry
US$1,847 million
Total employees
59,386
The Pharmaceutical Industry in Mexico
Mexico has become an attractive
destination for
investment in the pharmaceutical
industry due to an improved
regulatory framework and to the
increase in quality certifications.
20 out of the 25 most important
companies worldwide have
presence in the country.
Mexico is the second largest market
in Latin America in the
pharmaceutical industry and also an
important producer of
high-tech drugs.
Production and Consumption
In 2014, Mexico’s pharmaceutical sector produced US
$11,430 million. It is expected a CAGR of 8.7%
between 2015 and 2020 .
The industry accounted for 2.9 of manufacturing GDP
Consumption of pharmaceutical in Mexico
reached a value of US$16.9 billion. It is
expected to record a CAGR of 8.4 % for
the next five years.
and 0.48% of total GDP, and its added value was 54%.
41.6% of production inputs came from foreing
countries.
Pharmaceutical Consumption Forecast 2010-2015
(Millions of US dollars)
Pharmaceutical Production Forecast 2010-2015
(Millions of US dollars)
13,656 16,962 13,236 13,143 12,656 16,158 15,857 11,430 2010 Source: INEGI
2011 2012 2013 2014 15,972 15,129 2010 2011 2012 2013 2014 Source: INEGI yGlobal Insight
Mexico’s International Trade
In 2014, Mexico was the leading
pharmaceutical exporter in Latin America, with
total exports of US$1,847 million.
Main Export Destinations 2014
País
Millions of US dollars
%Part
The same year, Mexico imported
pharmaceutical products for a total of US
$4,939 million. Mexico’s main suppliers
were United States, Germany and
France.
Main Suppliers 2014
Millions of US dollars
%
Country
2012
2013
2014
2014
2014/2013
414
452
444
24.03
- 1.77
17
17
225
12.21
1252.08
223
191
206
11.16
7.97
329
263
202
10.92
- 23.21
111
96
109
5.93
13.94
79
67
77
4.15
13.75
68
62
73
3.96
18.10
141
105
67
3.64
- 36.18
55
30
55
2.97
81.48
34
42
43
2.31
2.57
Otros
404
385
346
18.7
10.2
Otros
Total
1,874
1,709
1,847
100.00
8.03
Total
1 United States
2 Switzerland
3 Panama
4 Venezuela
5 Colombia
6 Ecuador
7 Guatemala
8 Brazil
9 Canada
10 France
Main products exported by Mexico:
•  Medicines containing alkaloids or their
derivatives
•  Antiserums
•  Drugs containing antibiotics
1 United States
2 Germany
3 France
4 Puerto Rico
5 Switzerland
6 Italy
7 Canada
8 Ireland
9 Belgium
10 Spain
%
2012
2013
2014
2014/2013
1,168
1,130
1,045
- 7.47
791
849
901
6.16
470
554
559
0.84
429
345
423
22.75
288
292
303
3.80
218
202
215
6.47
152
156
189
21.71
103
138
118
- 14.65
90
111
115
3.72
100
113
112
- 0.49
1,175
4,985
1,150
5,038
958
4,939
-0.17
- 1.98
Source: Global Trade Atlas
Main markets of mexican exports of pharmaceutical industry 2014
(mdd) Colombia
Ecuador
Venezuela 6%
4%
11%
Guatemala
4%
Others
19%
Panama
11%
Others
[PORCENTAJE]
Switzerland
12%
United States
24%
Source: Global Trade Atlas
France
2%
Canada
3%
Brazil
4%
Exports of pharmaceutical industry 2004-2014
(mdd) 2,000 1,874 1,774 1,800 1,709 1,266 1,257 1,225 1,311 1,305 1,461 15% 15% 1,274 10% 1,200 8% 7% 6% 1,000 800 -­‐1% -­‐1% -­‐3% 600 25% 20% 21% 1,600 1,400 1,847 5% 0% -­‐2% -­‐5% 400 -­‐9% -­‐10% 200 0 -­‐15% 2004 2005 2006 Source: Global Trade Atlas
2007 2008 2009 2010 2011 2012 2013 2014 Imports of pharmaceutical industry 2004-2014
(mdd) 6,000 30.0% 4,985 24.2% 5,000 19.9% 4,063 4,000 4,325 5,038 4,939 4,540 20.0% 3,881 15.0% 3,389 12.3% 3,025 25.0% 12.0% 11.4% 3,000 10.0% 9.8% 2,435 2,169 5.0% 5.0% 2,000 1.1% 0.0% -­‐2.0% 1,000 -­‐4.5% -­‐5.0% 0 -­‐10.0% 2004 2005 Source: Global Trade Atlas
2006 2007 2008 2009 2010 2011 2012 2013 2014 Foreign Direct Investment
Between 2005 and 2014, the pharmaceutical sector received US$3,172 million of FDI. In
2014, the country received US$174 million of FDI.
FDI by country
(millions of US dollars) 2005-2014
Country
FDI
United States
1,154
Luxembourg
370
Ireland
369
Germany
364
Spain
234
Others
681
Total
3,172
Source: Ministry of Economy *1 st Quarterr
Foreign direct investment
The industry requires greater investment in the subsector
pharmochemicals, in order to provide inputs and active ingredients
for the Mexican pharmaceutical industry.
Mexico has become an attractive destination for investment in the
pharmaceutical industry due to its wide market and the improved
legal framework that protects intellectual property and opens new
business niches such as generic drugs and biopharmaceuticals.
Spanish companies like Almirall and Genome Systems are
interested in investing in Mexico in order to expand its presence
in emerging markets.
Several companies such as Daiichi Sankyo Pharmaceutical
Company and Chiesi have begun operations in Mexico in order to
sell their products in the Mexican market and other countries in
Latin America
Companies
There are a total of 718 economic units* in Mexico that specialize in the pharmaceutical
industry. Currently, the pharmaceutical sector generates approximately 59,386 jobs. The
companies are located mainly in Mexico City, Jalisco, the State of Mexico, Puebla.
Economic Units
Main companies in Mexico by sales
2014
(Millions of US dollars)
Company
Bayer de México
Pfizer
MSD
Grupo Novartis
México
Country
Sales in Mexico 2014
millions of US dollars
Germany
USA
USA
Switzerland
*Includes companies, plants and administrative and sales
1,430
876
789
529
State
# Economic units
Distrito Federal
Jalisco
Estado México
Puebla
Morelos
Nuevo León
222
Veracruz
Querétaro
Guanajuato
Michoacán
Others
26
130
TOTAL
718
135
72
33
31
27
23
19
19
Source: DENUE, ANFAM and CNN Expansión
Companies
The mexican pharmaceutical industry stands out because it counts with the presence of 20
out of the 25 largest companies worldwide, but also because its national companies are wellknown for their quality and experience.
Costs
Thank You
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