B. Braun Medical Industries

PAVING THE WAY FOR PENANG AS A MEDICAL TECHNOLOGY HUB

1972 was a landmark year for Malaysia’s medical devices sector, as German giant B. Braun Melsungen AG decided to open its first Asia-Pacific manufacturing plant in Penang’s Bayan Lepas Free Trade Zone (known today as a Free Industrial Zone) and in doing so become the first foreign medical devices company to be established in Malaysia.

Today, Malaysia is home to the largest medical devices industry in ASEAN, valued at over US$1.8 billion and hosts to more than 200 manufacturers. Malaysia-made medical devices are exported around the world, mainly to the United States, Germany, Singapore, Belgium, Japan, China, the UK, the Netherlands, Australia and Brazil. In fact, B. Braun Medical Industries Sdn Bhd (BMI) is a key contributor to these exports as it manufactures intravenous (IV) catheters, hypodermic needles, special needles, elastomeric pumps, surgical instruments and pharmaceutical solutions.

There is little doubt that Malaysia’s position as a regional medical devices manufacturing hub would not have been possible without B. Braun’s crucial decision to open up its Bayan Lepas plant all those years ago. But more than just start the ball rolling for the development of the industry in Malaysia, BMI has also played a crucial role in the development of human capital. In fact, Invest-in-Penang CEO Datuk Loo Lee Lian has even credited BMI for being the training ground for many CEOs in the Malaysian medical devices industry.

For B. Braun Asia Pacific’s President Lam Chee Hong, this statement is something that fills him with pride. Speaking to International Business Review, he said, “I am very heartened that our alumni have found success after leaving B. Braun and that they are still carrying on the culture of Sharing Expertise. This shows that we have been successful in imparting the right skills and knowledge that has enabled our people to grow.”

Lam Chee Hong definitely knows a thing or two about the opportunities provided by BMI. Having joined the company in the 1980s as a medical sales representative, he has advanced through the years and now oversees B. Braun’s entire operations in the Asia-Pacific.

And with nearly 40 years in the company, Lam Chee Hong has also seen the growth and evolution of BMI to where it is today. “When the company first started, we only had about 200 employees in one plant. Today, we are home to B. Braun’s largest manufacturing site in the Asia Pacific, responsible for over 7,500 jobs as well as being the location of the company’s Asia Pacific regional headquarters and Centre of Excellence for Intravenous Access (CoE IVA),” he said proudly.

Why Penang and Malaysia?

While there are several other countries that have also positioned themselves as medical device manufacturing hubs such as Puerto Rico, Costa Rica and Ireland, B. Braun has placed great trust and confidence in Malaysia. And this is reflected in the substantial investments that the company has put into its operations here.

“Since our inception, we have invested close to RM5 billion, including RM100 million annually on automation, facilities, equipment upgrade and capacity expansion,” Lam Chee Hong revealed.

Further expounding on Malaysia’s strengths as an investment destination, he highlighted, “Malaysia is strategically located at the heart of Southeast Asia, and serves major economies such as India, China and Japan. It also has strong economic fundamentals and business-friendly policies and a government that is welcoming of investors with tax incentives, grants and solid intellectual property protection laws.”

For Lam Chee Hong, Penang, in particular, has “the right ingredients to become a hub for medical device manufacturers and a key destination for med-tech companies. As the Silicon Valley of the East, Penang has developed a conducive ecosystem including a strong supply chain, infrastructure and skilled workforce which also caters to the needs of medical device manufacturers.”

Enhancing the Ecosystem in Penang

BMI, of course, has tapped into this ecosystem to become the success that it is today. At the same time, it has also given back through helping to develop talent. This includes working with the Penang Skills Development Centre (PSDC) and the Malaysian-German Chamber of Commerce as part of the German Dual Vocational Training programme. BMI also works with local universities such as Universiti Malaysia Perlis (UniMAP) and Universiti Sains Malaysia (USM) to develop custom-designed programmes.

Elaborating on the vocational training programme, Lam Chee Hong explained, “This is an on-the-job experience which enables students to get their feet wet and be better prepared for the workforce. This is a crucial talent pipeline for both B. Braun and the country as it upskills the existing technical workforce and young graduates with international-level competencies.”

Through these programmes, BMI is also helping to plug the gap that would take Penang and Malaysia to the next level in the med-tech industry. “The main issue that a lot of companies are facing is in the shortage of manpower. There needs to be more effort to prepare a pipeline of technical skills human capital to sustain the growth that we are seeing,” Lam Chee Hong opined.

A Hub for Research and Development

The B. Braun Asia-Pacific President also noted having a strong technical talent pool will enable companies to set up research and development (R&D). As B. Braun’s global CoE IVA, BMI is playing its part in realising that goal by being the heart of R&D and production technology for safety products and systems like IV catheters, scalp vein sets (SVS) and hypodermic needles.

“We are investing heavily in R&D to prepare a solid pipeline for the future and increase in production capacity of IVA products. We currently have a team of over 130 members consisting of majority local employees. We are very pleased that ideas are gathered from across other global R&D centres and translated into the creation of products,” Lam Chee Hong proudly revealed.

In the world of medical devices, sterility and efficiency of the equipment is of utmost importance. Lam Chee Hong was pleased to highlight the role played by BMI’s Global Test Centre, which “conducts design validation, discovery and shelf-life testing, and failure analysis. All products are tested to ensure adherence to the stringent requirements of the European Medical Device Regulation (EU MDR), United States Food & Drug Administration (US FDA) and other recognised regulatory authorities.”

BMI has also been a key partner to the regional healthcare industry. As Lam Chee Hong revealed, “We share our experience with our customers to help them improve processes and efficiency. For instance, we have developed our in-house Aesculap Consulting Solutions to improve the turnaround of surgical instruments processing and sterilisation. Through recognising current trends and market developments, we develop solutions to reduce costs and improve patient safety.”

Moving forward, Lam Chee Hong highlighted that BMI will be focusing on expanding its manufacturing base and production line, as well as automation and R&D in order to spur innovation and smart solutions. The company is also committed to environmental, social and governance (ESG) initiatives as per the goals of its parent company, and he aims for BMI and B. Braun Asia Pacific to fulfil the Group’s sustainability targets.

Lam Chee Hong is confident of Penang’s trajectory and said, “I must give due credit to the hard work and consistency of the Penang State government for their visionary planning and working with the Ministry of Investment, Trade and Investment (MITI) and the Malaysian Investment Development Authority (MIDA) to facilitate investments from abroad.”

And as B. Braun so aptly demonstrates, good things come indeed to those who set up in Penang.