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Healthy innovation

Businesses add medical products to lineup to boost traditional manufacturing markets

By Paula Schleis
Beacon Journal business writer

Published on Monday, Jun 23, 2008

For a quarter of a century, underground coal mining machinery has been bread and butter to EBO Group, a Sharon Center company that designs, tests and assembles products from power transmissions to renewable energy innovations.

While that market continues to flourish, co-founder Dave Heidenreich predicts an entirely different product line will top the company's sales chart in another year or two.

Medical procedure chairs that the company began designing and building in 2002 are to take the crown.

The decision to tap into the fast-growing health-care sector was EBO's response to a declining steel industry that kept profits flat from about 1998 to 2002, he said.

''Overall, we weren't growing and we recognized that trying to grow this company in a declining market just wasn't the smartest thing to try and continue to do,'' Heidenreich said.

EBO's strategy is one that many traditional manufacturers in Northeast Ohio are employing, said Baiju Shah, president of BioEnterprise, a Northeast Ohio economic development group that works with health-care companies.

In fact, Ohio is now No. 2 in the Midwest for companies that make medical devices or components, with 625 manufacturers and distributors registered with the Food and Drug Administration.

Part of that growth, Shah said, speaks to heavy industry redirecting its equipment and expertise to more profitable areas.

The topic was explored at a recent forum sponsored by BioEnterprise and the manufacturing advocacy organization MAGNET.

Shah said a panel discussion highlighted two recent periods when
area companies began exploring medical markets in earnest — the recessions of 1991 and 2001.

''There was a recognition of a long slow erosion in the profitability of their traditional markets . . . but the recession was the crisis that really forced them to say we need to look elsewhere, and medical clearly stood out to them,'' Shah said.

Time will tell if the current economy will inspire more manufacturers to take that step.

MAGNET spokesman Greg Krizman said he found it interesting that last month's forum attracted about 150 participants when event organizers expected 75.

Krizman said MAGNET and BioEnterprise can help companies explore their potential.

''We would assess your situation to see what you are producing and see what viable alternatives there are for you,'' he said.

Because Northeast Ohio already has a well-established health-care community — from Akron's nationally ranked hospitals to the world famous Cleveland Clinic — manufacturers have a lot of local support and resources.

''It's a strong, strong, strong industry right now and companies that jump into the marketplace will add fuel to the fire of making this region a great one-stop place for medical products,'' Krizman said.

That's what EBO found when it hired displaced employees of a closed medical company to create a line of stretchers that fold into chairs for medical procedures.

Heidenreich said Northeast Ohio suppliers were able to provide all but one part for the line of chairs his staff assembles.

''Northeast Ohio is still a good place to do manufacturing,'' he said.

Shah, of BioEnterprise, said he'd like to see more companies get on board without the prodding of a struggling economy.

''I would hope we are over the tipping point, where instead of having contractions force manufacturers to look at other markets, they see the market growth and profitability opportunity out there,'' he said.

Shah noted that health care is the country's No.1 market and accounts for 18 percent of the United States' gross domestic product.

Quality Synthetic Rubber Inc. in Twinsburg is one company that didn't need a recession to point the direction.

Chief Executive Officer Philip Smith said the company had been making electrical and rubber components for many applications when it decided to pursue the medical market in 1994.

Its primary automotive market was strong at the time, but the company saw the general wisdom of diversification, Smith said.

The company first thought to enter the market by making existing products and competing on price — a strategy that worked when it expanded into the auto industry in 1978 — but the real growth potential was in the development of new products, Smith said.

Quality Synthetic Rubber now sells a variety of medical components. For instance, it created a special tray that not only holds a surgical tool kit, but can carry the tools through the intense sterilization process and be ready for the next use.

''We were not inspired by the financial times,'' Smith said. ''We just thought we would be able to apply our automotive technology — the same tooling and the same processes — to medical [applications] and it's worked out really well.''

 

Paula Schleis can be reached at 330-996-3741 or pschleis@thebeaconjournal.com.

 

For a quarter of a century, underground coal mining machinery has been bread and butter to EBO Group, a Sharon Center company that designs, tests and assembles products from power transmissions to renewable energy innovations.

Get the full article here.


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