Ortho Development Corporation Signs Contract to Establish Joint Venture Company in China
Draper, Utah, February 9, 2021
Ortho Development Corporation (ODEV) is pleased to announce the signing of an agreement with Changzhou Waston Medical Appliance Co., Ltd. (WASTON) for the establishment of a joint venture company in the People’s Republic of China. WASTON is an orthopedic device manufacturing company located in the city of Changzhou, Jiangsu Province. WASTON’s primary business focus is the development, manufacture and sale of trauma fracture repair and spinal fixation products. Their sales network includes over 1,400 hospitals in 234 cities in China.
China is the second largest market in the world for orthopedic medical devices. With a large, aging population (>160 million people over the age of 65) and improvement in health insurance policies, the demand for total joint replacement procedures in China has been increasing rapidly. “Our long-term strategic vision includes expanding distribution beyond the U.S. and Japanese markets into high-growth, emerging markets like China,” said Brent Bartholomew, President of ODEV.
In June 2020, ODEV signed an exclusive distribution agreement with WASTON for the sale of its total knee replacement product, the Balanced Knee® System (BKS), in China. Concurrently, both companies began a series of discussions on business expansion strategy in the Chinese market. “The challenge of trade frictions between the U.S. and China, coupled with intensifying price pressures triggered by government policy to reduce medical expenses, make pursuit of manufacturing in China for the Chinese market a necessity,” said Mr. Bartholomew.
The joint venture company will be established in Changzhou, Jiangsu Province and focus on the manufacturing and sales of orthopedic devices in China. Initially, the JV will sell the imported BKS product while building the infrastructure needed for manufacturing of ODEV designed hip and knee joint replacement products. The companies anticipate sales of the JV manufactured product in China by 2023.
Mr. Bartholomew added, “We have been seeking the right partner in China for quite some time, and are delighted to be working with an established, reputable partner like WASTON. This JV company will have the advantage of utilizing WASTON’s price-competitive domestic production capabilities, coupled with ODEV’s unique design, quality, and manufacturing technology for joint reconstruction products.”