Indiana scores well on recent medical device cost and location survey

July 18, 2011 – News Release

Please see Inside Indiana Business for the full release

A recently completed corporate location study compares the cost of operating a medical technology manufacturing facility in 55 comparative locations in the U.S. and near shore alternatives in Canada, Mexico and Latin America. The report, keyed to the medical devices & supplies industry, also includes the Warsaw area, home of med tech giants Biomet and Zimmer Holdings.

Warsaw-based Zimmer designs and markets orthopedic products, including reconstructive implants used in knee or hip replacement surgery, spinal stabilizers, shoulder implants that restore function in arthritic joints, and dental implant systems and bone and tissue grafting materials.

Warsaw-based Biomet manufactures and markets products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. Biomet’s product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and dental reconstructive implants.

The medical devices & supplies industry is an important driver to the Northeast Indiana regional economy employing some 10,000 workers with an annual payroll in excess of $500 million.

The Boyd study analyzes all major geographically-variable operating costs that are most pivotal to a medical devices &
supplies company’s decision where to locate new production facilities. Overall costs in the study are scaled to a hypothetical 175,000 sq. ft. production plant employing 325 workers and shipping to a national U.S. market. Among the U.S. locations, annual costs range from a high of $30.7 million in San Jose, CA, to a low of $22.6 million in Sioux Falls, SD.

A Maquiladora border site in Mexico registers the lowest operating costs in the study at $16.8 million per year. Northeast Indiana, designated as Fort Wayne/Warsaw in the Boyd report, registers $23.4 million annually, showing significant cost savings vis-à-vis national med tech centers like Boston, New Jersey, Philadelphia, Minneapolis, Chicago, San Diego and California’s Silicon Valley.

Costa Rica, a popular near shore destination for medical devices & supplies manufacturing, shows costs of $17.8 million per year, second lowest of all surveyed locations. All costs in the analysis are expressed in U.S. dollars. Canadian costs are at parity and Mexican figures reflect an exchange rate of .0916. Costa Rican costs reflect an exchange rate of 585 colones per $U.S.

Major benchmark cost centers for the medical devices & supplies industry in New Jersey, Minnesota, Massachusetts, Connecticut, Illinois, Florida, Utah and California are included in the Boyd analysis as are a series of other North American manufacturing hubs.

About Boyd
Founded in 1975, The Boyd Company of Princeton, NJ, provides independent location counsel to leading U.S. and
overseas corporations like PepsiCo, United Technologies and HP. Devoted exclusively to corporate mobility, The Boyd
Company is a leading authority in comparative business cost analysis and strategic corporate site selection.

Source: The Boyd Co. Inc.

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