Beijing, Zhong Guo (PressExposure) November 25, 2010 -- Benefiting from population aging, consumption upgrading and policy support, the orthopedic instrument industry has witnessed rapid development in recent years. The annual compound growth rate during 2006-2009 was as high as 22.1%, and the market size in 2009 reached RMB6 billion. Joint, trauma and vertebral column products, the three major products in Chinese orthopedic instrument market, achieved market size of RMB1.8 billion, RMB1.67 billion and RMB1.49 billion respectively in 2009.
Subject to R&D and production technology constraints, Chinese orthopedic instrument market is mainly dominated by foreign-funded enterprises (with 56% market share in 2009), including Johnson & Johnson, Medtronic, Synthes, and Stryker. However, by virtue of such advantages as low production cost, mature manufacturing technology, and sound medical marketing channels, local enterprises are scrambling for larger share in the orthopedic instrument market and heading towards the high-end market form low and medium-end market, so, the future will see an evident trend of import products being replaced with domestic products. Trauson Holdings, Kanghui Medical and Weigao Group, the three major domestic enterprises, in particular, held an accumulative total of 17.1% in trauma product market and 13.7% in vertebral column product market in 2009, indicating powerful market competitiveness.
Take Trauson Holdings as an example. In 2009, the company obtained total revenue of RMB211 million, up 21.3% from 2008, hereinto, trauma products realized revenue of RMB135 million and held 8% of the domestic trauma product market, only second to Synthes; vertebral column products made revenue of RMB31 million and occupied 3% of the domestic vertebral column product market, ranking the 6th.
Trauson Holdings is strengthening production, sales, M&A, and the R&D of new products so as to improve the core competitiveness. In June 2010, the company planned to invest the RMB520 million raised through public offering in capacity expansion and equipment upgrading (about RMB200 million), product R&D, market expansion and marketing channel construction (approximately RMB100 million), and M&A (roughly RMB180 million). Up to June 2010, besides the existing 88 kinds of orthopedic products, Trauson Holdings was engaged in the R&D of 11 new products as well as the clinical test of 7 new products, including 5 vertebral column products and 2 joint products; its new factory in Changzhou was under construction according to schedule and was anticipated to be completed by the end of Dec. 2010; adding 40 new distributors, the company expanded the total number of distributors to 430, including 51 overseas distributors.