Opto Circuits Limited in the
European Union (EU)
Opto Circuits Limited is present in the EU through
its subsidiaries Mediaid Inc. and Eurocor GmbH.
Mediaid was incorporated in 2002 in the USA and
has its distribution network spanning the USA,
Latin America and Europe. In 2006, Opto Circuits
acquired Eurocor to diversify its product portfolio
and expand its base in the EU.The geographical
break-up of Opto Circuits’ revenues in FY 2006
is depicted in the figure below:
Opto Circuits Limited in Germany
Eurocor, a subsidiary of Opto Circuits, is
headquartered in Germany and deals in a variety
of cardiac and peripheral stents. It is based at Bonn,
Germany. Opto Circuits is also present at
Company Background
Opto Circuits Limited, headquartered at Bangalore
in India, was established in 1992. It offers a wide
range of electronic devices and monitoring
products in the healthcare segment such as digital
thermometers, pulse oximeter, pulse oximeter
sensors, fluid warmers, cholesterol monitors and
stents. It is one of the major suppliers to original
equipment manufacturers (OEMs) in the medical
electronics field.
Opto Circuits has its international operations in
the USA, Germany and Dubai, through its wholly
owned subsidiary, Mediaid Inc.; and in France,
Germany and Poland through another wholly
owned subsidiary, Eurocor. It also has a 60-per cent
stake in Advanced Micronic Devices Limited, a
Bangalore-based company dealing in cardiac care
and other healthcare equipment. Opto Circuits has
well-equipped manufacturing and R&D facilities
at Bangalore. Owing to the company’s prominence
in exports, it has been awarded 2 Star Trading
House Status by the Government of India; this
accreditation gives certain import/export privileges
to the company.
Opto Circuits generated revenues of EUR 21.6
million in the financial year ending 31 March 2006.
Following the acquisition of Eurocor in January
2006, the company’s revenues surged to EUR 5.4
million for first quarter (Q1) of FY 2007,
as compared to EUR 3.7 million for the same
quarter in the previous year.
12%
%
Grevenbroich in Germany through the office of its
subsidiary, Mediaid Inc.
Opto Circuits Limited in Other
EU Countries
Eurocor has its branch offices in France and Poland.
The company has a wide distribution network in
the EU spanning Germany, France, the UK, Italy,
Spain, Portugal, Austria, Poland, Czech Republic,
Slovakia, the Netherlands and Belgium.
Factors for Success
Strategic Acquisitions
The recent acquisition of Eurocor has provided the
company with a diversified portfolio along with an
established widespread presence in the EU.
Eurocor has its presence in over 36 countries
across the globe and covers most EU regions.
Innovation
Innovation has driven the growth of Eurocor and
given it an edge over its competitors. Eurocor is
tone of the few companies offering stents that are
biodegradable-coated and anti-allergic.
Economies of Scale`
Opto Circuits benefits immensely from its
widespread manufacturing and distribution network.
This network gives it the advantage of economies
of scale over its competitors, thereby reducing its
manufacturing expenses per product and thus
making its products cost competitive.The company’s
manufacturing, as well as administration and
marketing expenses reduced by 4.2 per cent and
0.8 per cent, respectively, in the first nine months
of FY 2006.This increased the operating profit
margin by 510 basis points (bps) to 31.6 per cent.
considering both organic and inorganic routes to
achieve this target. After its recent acquisition of
Eurocor, it is looking forward to more acquisitions
in the USA and Europe.
Investments in R&D
Eurocor’s success in the past can be attributed
mainly to its R&D activities, and the company will
continue its focus on R&D. It will invest heavily
to develop second-generation and third-generation
stents.The company plans to develop new stents
at lower costs and earn better margins in the
market. It is also targeting joint R&D with other
leading companies.
Aggressive Marketing
Eurocor wants to increase its visibility in the
international as well as domestic market and is
therefore coming up with an aggressive strategy
for marketing its products.The company has plans
to organise press meetings and seminars, and
advertise its brand by advertising through television
and magazines.11 The company is aggressively
marketing its products by opening new offices,
thereby reducing its dependence on a single
geography.
Stents – A Huge Opportunity
The recent acquisition of Eurocor is helping
Opto Circuits gain a strong foothold in the global
stents market, which was valued at EUR 4.8 billion
in 2004 and has been estimated to grow to
approximately EUR 8 billion by 2008. It is expected
that in 2008, the US, Europe, and the Far East and
Latin America will account for approximately 50
per cent, 30 per cent and 20 per cent, respectively,
of the global stents market. Opto Circuits plans
to leverage the capabilities of Eurocor to garner
a 5-per cent share in the European stents market
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