From outsider to industry leader
Surprisingly, Liu was an industry outsider prior to founding what has become one of the few Taiwanese medical device companies with global reach.
The company’s 59-year-old founder received her undergraduate degree in law from Fu Jen Catholic University before pursuing an MBA in the United States. Though she didn’t have a strong personal connection to the healthcare industry, she saw opportunities in the medical devices sector when she examined it from a market perspective.
After founding her company with just NT$6 million, she began manufacturing wiring for medical instruments. She then gradually moved into manufacturing components with the help and guidance of larger firms.
New Deantronics’ approach to business has been to focus on a single field and to seek constantly to improve.
Electrocautery pens are invasive devices that must be sterile. In its early days, New Deantronics had its customers handle the testing, packaging and sterilization of its products after delivery. Liu later decided to increase her company’s value-added by moving these functions in house.
The company built an ISO Class 7 compliant clean room in 2011 so that it could injection mold its plastics in a sterile environment. Workers entering the production area now must first thoroughly wash their hands, then don cleanroom clothing from head to foot (including a hat, gloves, and a mask) before going inside. The company has also built a microbiology laboratory specifically to monitor the bacteria in its production environment.
Now certified by the company’s large partners, New Deantronics’ products no longer need to be inspected and sterilized on delivery, and can go straight into inventory.
In spite of having already achieved great success—it is partnered with Covidien, the world’s top electrocautery brand with 76% of the global market—New Deantronics has no plans to rest on its laurels. In fact, the company introduced its own brand—E Surgical— just a few years ago and now distributes it in Australia, New Zealand, Japan, South Korea and France.
Rooted in Taiwan
Since its 1987 founding, New Deantronics has slowly grown from an industry outsider into a world-class medical device maker, from a small startup with fewer than 10 workers into a medium-sized enterprise with more than 470 employees. The road was long and arduous, but Liu’s faith never wavered.
Her objective has always been to run a business here in Taiwan, where she understands the environment. “If pursuing my career had meant going to a place where I didn’t know the culture or laws, it wouldn’t have been worth it to me.” She therefore did her utmost to make things work in Taiwan.
New Deantronics’s production processes adhere to her “Made in Taiwan” principle. With the exception of a few plastics that can’t be sourced from Taiwanese suppliers, Liu acquires all her basic materials, the stainless steel, the copper, and the plastic, in Taiwan. Her 400-plus employees are all Taiwanese as well.
“If you’re running your business here, you should hire Taiwanese,” says Liu, who argues that labor-intensive businesses end up having to deal with rising labor costs no matter where they go. “You’re better off putting thought into how to move your business forward than you are chasing from place to place in search of cheap labor.”
Over the years, the company has automated the portions of its production that were labor-intensive, freeing its employees from repetitious tasks and enabling them to fulfill a greater variety of functions. It has also increased the value-added of its production line by, for example, manufacturing the many different lengths and shapes of electrocautery tip required by minimally invasive orthopedic surgeries. That, in turn, has required contributions from a greater number of employees.
New Deantronics has devoted considerable effort to automation, and has generated a number of patents around the world as a result. Its production machine can now produce an electrocautery pen every five seconds, and as many as 3.8 million pens per year. The company plans to add two more machines and increase their annual production to 10 million units by 2015.
Building a medical devices network
While the company’s annual revenues of roughly NT$1 billion are hardly those of a large firm, it is very influential within its area of expertise.
“Working in healthcare is about helping others,” says Liu. “To sustain your business over the long term, you must have drive, learn continually, and be innovative.” Even though New Deantronics operates in a relatively non-competitive industry, it still needs R&D. Liu notes that cardiac electrocautery is ripe for a breakthrough.
The treatment of cardiovascular disease is an important area and will continue to be so in the future, but Liu notes that foreign firms control many key patents. New Deantronics is therefore seeking to develop its own technologies for reusable cardiological devices, such as defibrillators for the operating theater. “Having to dispose of something after a single use is very expensive, and hospitals are looking for reusable options,” explains Liu.
The company has also been exploring the development of power supplies/control panels for their electrocautery pens, and that research is already beginning to bear fruit.
Liu isn’t content with having created a company that is merely the “hidden champion” of the electrocautery pens industry. Before she retires, she hopes to bring other small medical device makers together under her company’s umbrella, creating a Taiwanese network of device manufacturers that can market its products to the world.
If she succeeds in her ambitions, Taiwan’s entire medical devices industry will reap the rewards.