Dive Brief:
- GE HealthCare has formed a long-term joint venture with a subsidiary of a Chinese state-owned drugmaker to provide non-premium CT and general imaging ultrasound solutions.
- The joint venture will develop, manufacture and commercialize medical equipment, with a focus on primary care and rural health. GE HealthCare and its partner, China National Medical Device Co. (CMDC), may expand the scope of the joint venture in the future.
- The joint venture continues GE HealthCare’s more than 30-year history of working with Chinese partners to manufacture and commercialize medical devices in the country.
Dive Insight:
GE HealthCare and Sinopharm, the parent company of CMDC, have an existing joint venture relationship through Hangwei, a medical equipment manufacturer that the partners formed in 1991. The latest deal adds to GE HealthCare’s ties to the country.
In a statement to disclose the joint venture, GE HealthCare framed the agreement as being in line with its “business strategy to grow in emerging markets with a local approach tailored to customer needs.” The focus on non-premium CT and general imaging ultrasound solutions will put the joint venture in competition with local, China-based companies.
In an earnings call earlier this month, CFO Helmut Zodl said government stimulus funds have created “robust demand” for imaging equipment in China but “there’s always been lots of local competitors.”
GE HealthCare’s strategy dating back to the 1991 joint venture means it is “a local player” in many of its modalities, Zodl said, because it designs and makes medical devices in China for China.
“A very large component of our portfolio is localized. It’s not close to 100%, but not far off 100%, and we continue to expand that on an ongoing basis,” Zodl said. “It’s not only the localization of manufacturing, but there’s also the innovation in China. Having specific products that’s really made for China, made in China, that’s really how we look at it.”
The formation of the new joint venture is subject to regulatory approvals in China.
