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India New Economy Old Economy

Ulco Medical - Manufacturing In India


India New Economy Old Economy

Company: ULCO MEDICAL

State: NEW SOUTH WALES

Sector: MANUFACTURING

Ulco Medical is a Sydney based designer and manufacturer of high
quality medical equipment, particularly anaesthetic and related machines.
Ulco is currently establishing its first overseas manufacturing plant in
the south of India.

Until 1997, about 40 per cent of Ulco's sales were exports, with
major markets in Thailand and Malaysia. However, the Asian financial
crisis undermined these export sales significantly. This, combined with
increased import competition in Australia, forced Ulco to look beyond
their traditional markets and production strategy.

In early 1998, Ulco's Managing Director first visited India. Initial
contacts focussed on sales and distribution; while these were successful,
Ulco' s prices proved too high to create a sustainable market. Hence,
Ulco's second trip to India focused on identifying a suitable partner to
jointly manufacture their equipment for the Indian market. Ulco
subsequently signed a joint venture agreement with a light industrial and
engineering firm from Chennai (Tamil Nadu) in late 2000 and are finalising
plans to establish an assembly plant in Pondicherry (south of Chennai).

Ulco identifies three factors critical to success in India. The first
is the choice of a good local representative in the initial stages of
researching the market. The second is considerable patience, particularly
in negotiations. The third is choosing a business partner who is as
committed to the venture and the product as the Australian partner and
with whom the Australian company is completely comfortable. Without
partner commitment, the normal risks of an overseas venture are greatly
magnified. With just such a partner on board, Ulco considers the
opportunities in the burgeoning Indian private health sector very
promising and looks forward to developing its Indian business.

Source: Ulco Medical, 2001.

Last Updated: 24 September 2014
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