Malaysia’s Device Market Growing 18% Annually

The Malaysian medical device market was worth approximately $100 million in 1992 and is growing at an annual rate of around 18%, writes Ames Gross. Over 93% of local demand is supplied by imports.

Due to its status as a major rubber producer, Malaysia’s local production is dominated by medical products involving latex. As a result, domestic production consists primarily of surgical gloves, catheters and cannulae. In addition, the country manufactures surgical blades, scissors, syringes and other low-technology products. More than 95% of locally-produced goods — valued at $270 million — are exported. This unique situation leaves foreign producers competing for the domestic market with virtually no local threat.

There are no restrictions on the import of medical equipment into Malaysia, and import licenses are not required. Import duties and sales taxes are, however, levied on medical equipment — import duties typically range from 5-30%, depending on the product, and sales tax is usually 10%. There are no technical requirements for medical equipment, but foreign manufacturers should be aware that the local electrical power supply AC; 400/230 volts; 50 Hz, and weights and measures are based on the metric system.

All government sector purchases are conducted through public tender and foreign firms must have a Malaysian agent to represent them. It should be noted that preference is given to bumiputera (ethnic Malay) agents in the awarding of government contracts. The distribution system for the private sector is different, tapping into a variety of sources. Private hospitals rely on local Malaysian distributors or agents, Singaporean distributors or agents, direct contact with manufacturers and purchasing organizations (“buying houses”) in industrial countries for the supply of medical equipment. The payment schedule differs greatly between sales to the public and sales to the private sector; the government can often take 120-180 days to settle their payments, whereas 30-60 days is more common in the private sector.

… laboratory equipment

A particularly good opportunity for foreign firms in the Malaysian medical market is medical laboratory equipment. Malaysia currently imports about 90% of medical laboratory supplies. Imports in this sector were about $35 million in 1992, with an average annual growth rate of 22%. Due to its traditional ties with the UK, Malaysia used to import much of its medical laboratory equipment from the UK and train its doctors there. In more recent decades, however, the US and Japan have become active players in this market. Until 1990, the US had the largest market share (26% in 1989) of the Malaysian medical laboratory equipment import market, but since then, the Japanese have become dominant, capturing 27% in 1990 and 30.6% in 1991. Best prospects in the medical laboratory sub-sector include: microscopes, laboratory glassware, dental laboratory equipment, centrifuges and mechano-therapy appliances.

The best overall prospects for foreign companies in Malaysia include: spectrometers, X-ray apparatus and tubes, electrocardiographs, dental equipment and dental handpieces and patient monitoring equipment.