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Mergon Corp. plans to expand its Anderson plant to manufacture medical products. The latest edition of GSA Business spotlights the growing medical-device industry in the Upstate.
by Scott Miller
smiller@scbiznews.com
Mergon Corp. plans to expand its Anderson plant to manufacture products for the U.S. medical device industry.
The 100,000-square-foot plant currently employs 130 people who make automotive components for BMW Manufacturing Co. and Honda. The plastics manufacturer plans to build a new clean room and hire more employees as it upfits the plant to produce re-agent containers, hospital-bed panels and other healthcare-related equipment.
Ireland-based Mergon already has a healthcare line at its locations in other countries. Its Ireland plant already has business relations with some OEMs that are based in the U.S., said Caolan Bushell, business development manager for the company’s healthcare division.
“We’re really looking to kick that business up in the U.S.,” he said. “We’ve seen some downturn in our other business units in the last 18 months but our healthcare businesses has remained fairly steady.”
The company hasn’t ironed out the details yet of its expansion or its hiring, he said.
“That depends on the opportunity,” Bushell said.
Mergon is part of a growing medical device industry in the Upstate.
A 2007 Batelle report listed Greenville as one of six emerging medium-sized U.S. regions for the medical device industry. That was based on local employment growth within the industry of 20% during the first half of the decade. The report was funded by the Biotechnology Industry Organization.
In a later report, BIO noted that South Carolina has outpaced the rest of the nation in the receipt of funding for biosciences research from the National Institutes of Health. The organization also credited the state’s Centers of Economic Excellence program, the SC Bio business incubator at the Greenwood Genetics Centers and other university programs with boosting that state’s biosciences industry. The top employer within that sector, BIO said, was the medical devices and equipment industry, which employed 4,274 South Carolinians in 2006. That’s an increase of 61% from 2000, BIO said.
The industry seems to be maintaining its momentum, one announcement at a time.
Spartanburg-based Norgenix Pharmaceuticals recently made a multi-million dollar investment in Glenveigh Medical LLC for the launch and commercialization of several new medical devices and instruments. Lab21 Ltd., a medical diagnostics firm founded in the U.K., recently acquired the Upstate’s Selah Technology. The venture plans to locate its U.S. headquarters in Greenville and create 65 jobs in the next five years. Deltex Medical, a U.K. firm that makes surgical monitoring devices, established its U.S. operations in Greenville in 2008. And St. Jude Medical opened its second plant in Liberty last year. The plant makes microelectronic circuits for pacemakers and could employ 300 people in the next several years.
In its recent targeted industry study, the Upstate Alliance indentified biosciences companies among those that economic development agencies should pursue, based on the infrastructure already in place to support such firms. That report cited more than 30 pharmaceutical companies already located here, the Greenwood Genetics Center, Clemson University and number of manufacturers of healthcare-related products, among other assets.
The biosciences field is one of the Upstate Alliance’s four targeted industries, joining the automotive, energy and advanced materials industries. Within the biosciences sector, the medical device industry is poised for the most immediate growth, said Amy Holloway, president of Avalanche Consulting Inc., which conducted the targeted industry.
More than 50 medical device or related companies are now located in the Upstate, according to the region’s medical device cluster, called S.C. MedTech, formed through New Carolina, South Carolina’s Council on Competiveness. That includes raw materials companies, firms that handle materials synthesis processing, subcomponent manufacturers, distribution and sales companies, post-manufacturing processing companies and functional-device manufacturers.
The industry has benefitted from state-supported programs like SC Launch and the S.C. Venture Capital Investment Act of 2004, said Matt Gevaert, CEO of Kiyatec Inc. of Pendleton and chairman of the Upstate Medical Device Cluster.
The 2006 Industry Partners Act allows individuals and corporations to make tax deductible donations to SC Launch, which then invests in startup companies like Gevaert’s Kiyatec.
To date, SC Launch has supported approximately 270 startup companies, either through funding or support services. Of those, around 40 offer biopharmaceutical-, biomed- or biotech-related products and services, said Bill Mahoney, CEO of the S.C. Research Authority, which oversees SC Launch.
“Four years ago, only two of those companies existed,” Mahoney said, noting that patents from the state’s three research universities are creating products that are ready to take to the market.
In addition to startups founded in South Carolina, SC Launch has also funded a significant number of bioscience companies that have relocated to the Palmetto State, Mahoney added.
“There’s a remarkable growth both in the number of companies and the amount of investment that is coming in,” he said.
The Venture Capital Investment Act, meanwhile, allowed Invest SC to take out a $50 million line of credit, secured by state tax credits, that was committed to four private equity firms.
Of those four firms, Nexus Medical Partners has committed the most investments, Gevaert pointed out.
“That’s were the innovation is. That’s where the growth is,” he said of the medical industry.
Nexus invested $2 million – along with an additional $2 million from its affiliate, Medicis Capital Partners of Germany – in Deltex. Nexus also recruited Sabal Medical to Charleston by leading a $2.6 million investment and was part of a $7.7 million investment that brought Myconostica Ltd., a medical company based in the United Kingdom, to Charleston.
The Massachusetts-based private equity firm was also part of an investment team that steered Lab21 to South Carolina. So was SC Launch.
“This is a pretty good place to do business,” Gevaert said. “When lots of other things were crashing and burning big time, the medical device sector here was doing quite well.”
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