Having more than 10 years of experience working as a quality controller under her belt certainly comes in handy for Carol Teo, when she was roped in to help with the setting up and devise the operating procedures for medical gel and personal hygiene product manufacturer ISD Meditech Sdn Bhd.
Founded in 2010, ISD has three founding shareholders including Teo. While the company started by supplying medical gel under the Skygel brand name to local clinics and hospitals, being based in Malaysia, the export market has always been the company’s main growth driver.
“We started with just less than five workers but today we have around 30 staff including production line workers. Most of our medical gel manufacturing processes are also automated to reduce human contact and risk of contamination.
“Our exports currently comprise around 80% of the total sales, with exports to more than 130 countries, though most are indirectly through our distributors and importers.
“The exports consist mainly of medical gel and sanitisers,” said Teo.
To build on its export markets, ISD is also the first medical gel manufacturer in Malaysia to get halal certification.
The company is seeking partners that are either financial investors or strategic with established and strong distribution networks especially in key markets such as India, Vietnam, Indonesia, Thailand, the Philippines and Latin America, said Teo.
ISD products are also certified to be exported to Europe, she added.
Medical or scanning gel products are used in aesthetics, diagnostics and surgical purposes within the medical industry.
Also known as ultrasound gel, it is available in different proprietary compositions at a relatively low cost and used in medical centres across the world.
While ISD’s proprietary Skygel brand of medical gel has received good feedback from doctors and healthcare professionals who are the product’s end consumers, the company currently lacks market access capability as it relies on independent distributors and licensed importers in importing countries.
Teo also said the company is expanding its product range with cleaning liquid and is working to expand its production capacity to cater to its product diversification plans.
It may also open to the idea of bulk purchase or sign up large medical distributors in overseas markets.
ISD has the capacity to produce up to five tonnes of liquid medical gel per day, besides other production lines used to produce sanitiser fogging liquid and its most recent addition, cleaning liquid.
“We are still open to approaches from strategic or financial investors with expertise in the consumer medical product business to help expand our market,” said the co-founder and head of operation.
Investor Approaches
She said the company has received several approaches from local investors seeking a stake or acquiring the business as part of the bolt-on expansion drive among companies in the medical industry, but has so far not reached any agreement.
On the challenges for the company, she said the period after the Covid-19 pandemic shutdown over the past two years were the toughest.
While medical gel has been the company’s bread and butter since its founding, it was the sanitiser that helped ISD tide through the pandemic in 2020 and 2021, when demand for sanitisers skyrocketed.
ISD has seen a slowdown in demand from buyers in certain markets as many of the smaller distributors in countries where it exports have closed or ceased businesses mainly due to the high logistic costs, which make imported products uncompetitive, she said.
“Certain major markets for the healthcare industry like India and Indonesia are also tough to penetrate, as low-cost local backroom operators tend to dominate with cheaper alternatives, albeit most of them have questionable quality control,” she said.
Expansion through mergers and acquisitions (M&As) is seen as timely as the medical and consumer-focused manufacturing sectors have attracted interests from investors for its resilient and long-term growth prospects.
While talks have not reached any deal so far, Teo said ISD is still keen to explore potential partnerships that can help accelerate its expansion.
On the long-term prospect for the medical product manufacturing sector, Teo said Malaysia is still one of the best locations for the industry.
Key ingredients for a quality medical gel comprise mainly of water, stabilising agents such as propylene glycol, glycerin, salts and other proprietary ingredients, and has a thick consistency.
Crucial Elements
While ISD’s products are not particularly high tech or complicated, it does have some crucial elements that are needed for the industry to thrive, citing the well supported manufacturing ecosystem, relatively low cost of key input variables such as labour, electricity and relatively cheap and abundant supply of clean water.
She said ISD is also confident that the increasing adoption of ultrasound gels owing to its property of conducting ultrasonic waves to produce clear images of inaccessible internal organs has led to increased demand for ultrasound gel and is expected to drive revenue growth of the market.
“Most of our distributors and importers are dealing with hospitals and clinics, so it is important for them to ensure the product meets the quality standards and reliable supply,” said Teo.
Some of the advantages that manufacturers like ISD can offer include faster lead time on delivery directly from the factory, clearer line of communication for crucial certifications and documentation needed like accurate laboratories test reports, product liability insurance to better protect customers and direct access to the accurate information and after-sales support, she said.
Diversification is also on the cards, with the company now looking to expand into personal and household cleaning products.
With the expansion in product lines, ISD will be scouting for additional capacity including a bigger factory, which is now part of its growth strategy.
