KARACHI: The surgical sector, one of the five prime export-oriented sectors of the country has been facing multiple problems.
The leakage of production technology, rise in production cost of surgical instruments and the export of steel scrap are causing havoc for the metal-related industries as scrap is the major source of locally produced stainless steel, which fulfils approximately 45 percent of the requirement.
Representatives of Surgical Instrument Manufacturers Association of Pakistan (SIMAP) were of the view export of surgical forgings and semi and unfinished products were the most critical components for decline in surgical instruments exports.
“If these products will be exported to other countries, then local industry will suffer heavily in shape of loss of export orders”.
The government should check the export of scrap from the country. Surgical Instrument Manufacturers Association of Pakistan urged Commerce Ministry and Federal Board of Revenue to immediately impose a ban on export of forgings, semi-finished and unfinished products.
“Both India and China, only repack or stamp Pakistan-made instruments and sell them as their own brands.”
Lack of brand development is another major issue concerning this industry. Brand development is such an exercise, which cannot be done by a company due to the fact it requires huge resources and expertise and support of the government.
India and China, which actually have no manufacturing or technical skills in this field, are rapidly penetrating in surgical business, only by doing branding with full support and assistance from their respective governments.
If India could earn huge foreign exchange by brand promotion only, then why can’t we when we produce world-class medical instruments.
Surgical industry could start earning at least $1 billion within three years, provided, it is given due attention by the concerned government departments.
The rising utilities costs, increasing prices of raw materials, high banking service charges, high export refinance rates of central bank and uneven taxation system are added barriers to the falling exports.
“We are the largest suppliers of medical instruments to United States of America (25 percent) of total export, Germany (20 percent), United Kingdom (10 percent), Italy (5.0 percent) and United Arab Emirates (5.0 percent).
In India, where due to realistic and practical policies prepared in consultation with the business community the exports are touching over $140 billion mark.
Trade organisations are not consulted during the preparation of policies and neither are their recommendations included in the policies.
Exporters of Pakistan share merely over 2 percent ($450 million), of the $21 billion global trade, as most of it is lost to outsourcing importers.
Basically, local producers are suppliers to international brands based in the United States and Western Europe, who outsource manufacturing to artisans concentrated in Sialkot.
The sector comprises of around 3,000 companies with production over 10,000 various medical instruments having the labour force ranging from (15-450) per unit, of which around 30 can be considered large units, and 150 as medium sized enterprises.
The industry produces on average over 170 million pieces a year. Of the total production, over 95 percent is exported, which includes 60 percent of disposable and 40 percent of reusable surgical instruments.
United States, United Kingdom, France, Italy, Germany, United Arab Emirates, Japan, Russia, Mexico and Brazil are main exports destinations. America is the largest market for disposable instruments, while a majority of reusable instruments are exported to European Union.
The Ministry of Commerce has failed to help the sector in developing brands.
Pakistan’s direct exports of surgical instruments to China and India are also on satisfactory level. Pakistan’s exports of surgical products remained to $9 million in 2016.
The surgical sector has been facing bottleneck in marketing to adoption of new technology. There is no training institute to train human resource. 95 percent surgical industry operates in small and medium enterprises sector.
There is a need to increase common facility centres to reduce the cost of production.
Published in Daily Times, July 2nd, 2017.