It will take some time before we can move beyond the great uncertainty that the coronavirus pandemic continues to cause. However, we are starting to see several encouraging signs of positive development – in society as well as on the market. The work we are doing, and have done, makes us well-prepared for the future, and for meeting the needs of the medtech industry.
A stable market recovery in Orthopedics, Life Science, and Dental
The recently increased demand in orthopedics products indicates that the market – in the United States in particular – may be recovering faster than we anticipated. Our production facility in Memphis has been designated an essential business by US authorities. This means that they can maintain normal production, despite the current recommendations and restrictions imposed on many American businesses.
While we do expect a production decline in Orthopedics and Life Science during 2020, we also expect to see a slow but stable recovery during the latter half of the year. These business areas were affected by the massive changes in healthcare prioritizations this past spring. We are now seeing patients’ operations and other medical procedures return to their ordinary pre-pandemic levels, if slowly.
The recovery of the Dental market is somewhat more difficult to predict. Several international companies have recently been cautious in their economic forecasts. That said, we are currently experiencing a slight increase in demand from our customers. Dental aesthetics and digital dentistry continue to be long-term driving forces for the dental implant market. We also saw a promising start to 2020, with Dental growing at a higher rate than the market average.
Maintaining Operational Excellence through increased efficiency and specialization
We are continuing to work with our long-term goal of building world class medical device manufacturing expertise through our focus area Operational Excellence. That means continuing to increase efficiency throughout the company group, which is something we have been working with these past few years.
This, in turn, is based on our work with increased specialization – of processes as well as competencies – in order to make our production facilities more competitive, and to lower our operating costs. By better utilizing the expertise, machinery and processes of our facilities, we are able to optimize our global business, and achieve greater short- and long-term profitability.
Maintaining stability and ensuring profitability while adapting to reduced demand
As we expect reduced demand in the market for some time ahead, due to the uncertainty of the pandemic, the Elos Medtech corporate group has taken action to customize our business and ensure short- and long-term profitability. This included production stops and furloughs at our facilities in Timmersdala and Gørløse in the spring, in order to ensure cash flow and necessary adjustments to our cost structure.
These measures, combined with our ongoing work with Operational Excellence, provide a stable foundation for us to stand on. It means that we are able to provide our customers with the production capacity and expertise they expect from us, and to maintain stability even in these unpredictable times.
Other key factors that will help us navigate through the pandemic
Despite the uncertainty of the present, we remain confident about the future. The latest market information gives us cause for optimism, and we currently expect to see a stable recovery later this year. Based on what we know today, we estimate that we will be able to manufacture and deliver in accordance with the changing demands of our customers. Several of our markets have had a more brief decline than anticipated.
There are also other reasons for us to feel optimistic as we move forward:
- Being a global company, with customer bases in several different medtech industry segments, enables us to be and remain a stable business even in an economically shaky environment.
- In spite of the global effects of the coronavirus pandemic, it is clear that conducting business on several continents, with different industry segments around the world, strengthens our company. We remain as confident as ever about our business model.
- Our flexibility allows us to better meet both growing and falling healthcare demands, as the needs of the medtech industry – and of healthcare overall – continue to change over the course of the pandemic and the economic recession.
We are here to stay, and will continue to use our expertise, long history, and dedication to Complete Performance to get through the pandemic, and remain your global partner on the other side of it. Looking ahead, we do not expect to encounter any strong headwinds. Even if we do, we are well-prepared and equipped to make the voyage as smooth as possible.
If you have any questions about our work during the coronavirus pandemic, feel free to contact us. You can read more about our initial response to the coronavirus outbreak here at the Elos Medtech blog. We have also written about how we worked as a team to weather the storm at our facility in Tianjin, China, as well as our work with mobilizing production sites in response to the acute global shortage of life-sustaining ventilators.