MDS eyes top spot in medical supplies market
MEDICAL DISPOSABLES and Supplies Limited, MDS, has set a plan in motion that it hopes will establish it as market leader in the medical distribution sector.
The distributor of medical and consumer products reported on Tuesday that it developed and implemented a set of specialised internal functions with that goal in mind.
MDS’s medical division, which distributes hospital supplies, medical disposable items, and medical sundries, is one of three divisions that make up the company’s core operation. It also operates a pharmaceutical division and its latest addition, a consumer unit.
For the financial year ending March 2019, MDS reported net profit of $112 million on revenue of $2.22 billion, 70 per of which came from its pharmaceutical division.
The listed junior market company last year diversified into confectionery but says its growth prospects reside in its core business lines.
Other players in the medical equipment and supplies industry include Cari-Med, Jamaica Hospital Supplies, Irad Disposables and Supplies, Aval Medical Supplies and Disposables, and RDL Distributors. Boothe said the unavailability of data made it difficult to estimate MDS’s current market share and standing.
“I’ll openly admit that we got a little complacent, and as a result of that, we’ve placed a lot of focus on the other divisions, especially pharmaceuticals. We got to a level where we felt comfortable in leveraging our resources where we could expand the medical division,” said MDS General Manager Kurt Boothe. “The volumes in the area are not as great, but certainly, the profitability is great,” he told the Financial Gleaner at the company’s annual general meeting in New Kingston.
As a company already engaged in the medical supplies distribution trade, Boothe sees as a plus for MDS the high barrier to market entry, which he explained was due to the “extremely technical” nature of the business.
“It’s not very inviting to a number of players, so if we have expertise in a particular area that is relatively less inviting to competition, then I think it’s a no-brainer that we should expand and look towards being the market leaders in this space,” he said.
While tight-lipped on the details of the “specialised internal functions” adopted by the company, Boothe told the Financial Gleaner that MDS’s investment should lead to new product lines in its medical division, thereby allowing the company to target new business segments.
Prior to the current initiative, MDS’s last touted achievement was its appointment last year as distributor for American technology company 3M.
The new business in the medical division and expansion of the consumer division, was cited as the primary drivers of the 8.6 per cent growth in revenue to $2.2 billion, compared to $2.04 billion a year earlier.
“I think we have the ability to grow this area,” said Boothe. “We’ve had to put in quite a bit of investment, which I think will grow the bottom line, but without the input factors, the output would not grow,” he said.
The company expects to start reaping returns from the undisclosed investment in the medical division by March 2020, he added.
Aside from the medical division, MDS is also looking to continue the build-out of its consumer division by increasing its points of distribution and through marketing efforts. Further, MDS says it continues to take steps in embracing real-time decision-making driven by data analytics and investment in information technology.
MDS closed the 2018 financial year with assets of $1.6 billion, while liabilities of the company climbed to $889 million, which, according to Boothe, was attributable to the adjustments to its business model.