Yu Hing bides its time while building medical business

By Steve Toloken
PLASTICS NEWS STAFF

HONG KONG (January 20, 2009) — A simple plastic watch strap may not seem to have much in common with a precision-engineered surgical tool used to remove the gallbladder during an operation. But for one Hong Kong injection molding firm, Yu Hing Mfg. Co., molding those watch straps led to the surgeon’s table.

How Yu Hing did that offers a look at how one small Chinese firm hopes it can use new markets and adapt technology to survive the implosion of manufacturing in China’s Pearl River Delta corridor.

Yu Hing began as a watch-strap maker in 1976, but an interest in technology and a project assisting a charity administer cataract surgery to poor communities in China helped launch the firm’s medical division, MediConcepts Ltd.

Benjamin Chan, MediConcepts director, said in an interview at his Hong Kong offices that his father, company founder C.C. Chan, was an engineer who liked to tinker. The company was an early adapter of standardized tools in the 1980s, and was one of the first to use electroforming technology to make molds for PVC straps for Timex and other international firms, back when the industry was looking for a cheaper alternative to leather.

That grew into embedding antennas into the straps to make combination pager-watches, when that was seen as the newest technology of the 1980s. From there, the firm made forays into heart monitoring watches and other health-care products.

But, it was a project helping an Australian charity, the Fred Hollows Foundation, deliver cataract surgery in mainland China in the 1990s that helped galvanize the firm’s interest in medical work, Ben Chan said.

The company introduced the foundation to Chinese officials and helped the charity set up operations in several provinces, as it also made some simple plastic lens cases and other peripherals for the foundation.

But more importantly, Chan said, it also began exploring how to use its electroforming technology in making the lenses. That research was never commercialized, but it was crucial in helping the firm see that it could branch into medical markets, said Chan, who is also vice chairman of the Hong Kong Medical and Health Care Device Manufacturers Association.

MediConcepts’ work with charity groups and funding of medical research at universities in Hong Kong helps it stay in touch with the medical community and keep up with doctors who might be looking to develop their own products, Chan said.

“Because we do business with charity groups, we know a lot of surgeons in the market who have innovative designs,” Chan said. “They come and look for us and ask if we want to develop with them.

“We do not knock on the door of [medical device makers] and ask them if they want to give us some medical business,” Chan said. “We work with the surgeons. We work with the inventors.”

The company, for example, helped develop a surgical tool for removing gallbladders and other organs, and is sponsoring a clinical trial for using nitinol shape-memory metals to make a device used in spinal implant surgery, said David Wong, business development president.

Medical remains a small part of its business. Yu Hing has seven molding machines for medical projects in a clean room in Shenzhen, among more than 70 injection presses, including 13 Arburg machines and one Sodick magnesium injection press. But the company is looking for its medical-device division to help push growth at its 500-employee, Shenzhen, Guangdong province, injection molding factory, even as other firms in South China shed workers.

Chan said its watch business is still OK, and while its margins are getting tighter across all its business, Yu Hing expects it may pick up work in the watch industry, as the economic downturn pushes competitors to close.

He said the company has actually delayed leave for its tooling workers for the Chinese New Year, because it’s seeing more work as other firms shut down.

As well, Chan said he expects the company’s medical staff to grow, from about 50 now to 100 or 150 in a year, and add three presses. Much of the medical expansion will focus on adding quality-control staff, he said.

“If I double my [medical] workforce, I’ll triple or quadruple my [quality-control] team,” he said. “That is your guard dog, you have to have that.”

“You want manufacturing to be a low-risk, low-return business,” he said. You have to be more conservative in running a manufacturing business.”

Still, the company is getting more aggressive in medical. It’s exhibiting at trade shows, looking at taking a broader interest in marketing some of the devices it manufacturers, and has gotten involved with a government project in the United Kingdom to encourage doctors and nurses to develop their ideas into medical products, Wong said.

For Chan, the strategy is to get through what he thinks will be a two-year economic down cycle, and then be in position for the next pick up.

“We think this will be a two-year cycle,”he said. “We have enough bullets and the mental quotient to sit through it as a company and wait for another big time to come.”

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