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EF: What are your priorities for 2024?
GB: The key priority in the previous period has been regulatory compliance with the new European medical device regulations (MDR). Fortunately, we have successfully navigated this challenge, and all of our products are now MDR-approved, in addition to already having FDA approval. Our current priority is to grow our footprint. We are currently present in 26 countries and plan to expand into several new countries.
Our goal is to enter at least one new country per year, though sometimes we manage to enter two or more. We are focusing on European countries where we were not previously present due to regulatory hurdles, as well as exploring opportunities in Asian countries and South America. This global expansion effort is particularly centered around our dental implant product line.
EF: What does your product portfolio currently look like?
GB: We have been introducing one major innovation approximately every 5 years. The most recent example is a specialized implant for anterior tooth replacement, developed in collaboration with renowned academics Steven Chu and Dennis Tarnow from New York. Our approach involves partnering with top experts in the industry to create cutting-edge products, which we then protect with patents. This collaboration with leading professionals and focus on high-end innovations is a key differentiator for us, setting us apart from cheaper manufacturers who focus on more basic products.
A significant aspect of our strategy is our emphasis on education. To support the introduction and adoption of our innovative products, we allocate a substantial budget to educational initiatives. We organize training courses around the world, featuring key opinion leaders who lecture and train others. For example, in just the first few months of this year, we have conducted over six major courses globally. These courses often include hands-on training, and we frequently run cadaver courses.
EF: How does being in South Africa help you achieve high quality in your local products?
GB: The material side of our operations is fundamental, and our success here is due to our deep knowledge and strong partnerships with key suppliers. My background in metallurgy has provided me with insights into the latest developments and technologies. This expertise allows us to innovate with new materials, which we protect with patents, particularly in the dental implant sector.
One critical advantage we have over many competitors is our ability to maintain high quality in production. While large-scale producers often operate in high-cost labor markets and run machines continuously, they rely on broad tolerance bands. This is similar to the difference between mass-producing cars and crafting a Formula One car. The latter requires meticulous attention to detail, with each component measured and adjusted to ensure optimal performance. In contrast, our production environment benefits from more reasonable labor costs, allowing us to assign one operator per machine. This ensures that each item is carefully measured and adjusted as needed, resulting in consistently high-quality products. Our strategy is akin to producing Formula One cars repeatedly, rather than mass-market vehicles, focusing on smaller volumes but superior precision. This approach is particularly beneficial for treating patients with complex anatomical challenges, where precision is crucial.
The key difference lies in our current workforce's dedication and stability, with most employees having over 10 years of tenure. This tenure is the cornerstone of our success. Our team includes highly skilled bioengineers, tool makers, fitters, and turners, all essential for our operations. The local education system supports this by providing a steady stream of qualified professionals, ensuring we have the right people to maintain our high standards.
EF: How do you keep your team engaged and motivated?
GB: A key factor in ensuring sustainability and maintaining employee engagement is involving everyone in exciting projects. We accomplish this through a few strategic initiatives, educating and engaging the workforce, and visual engagement. We have screens throughout the factory displaying our current projects. This passive education helps machine operators and other staff understand the broader impact of their work.
Unlike many companies, we have our regulatory team and bring most processes in-house. This strategy allows us to move quickly from development to market. For example, when we developed the new inverter implant with experts in New York, our speed and efficiency impressed them, as we had products ready in about a third of the usual time. We manufacture our own tools for CNC machines, which gives us better control over quality and speed. While this might not be the most cost-effective approach, it ensures we maintain high standards and can quickly adapt to new requirements.
EF: How does your in-house approach pose a chance for growth?
GB: Our growth plan targets a 15% annual increase, effectively doubling our size every five years. This strategy allows us to finance our growth internally, avoiding the need for outside investors whose terms and conditions can be distracting. Organic growth at this rate is manageable and sustainable; if we aimed for 50% growth, external investment would be necessary. While some years we achieve 25% growth and others 8%, our average goal remains 15%. Maintaining control is crucial. Rapid expansion requires training many new employees, which can lead to errors. By limiting our growth rate, we ensure our training programs and staff development are well-managed, allowing everyone to understand their roles clearly.
EF: How will the MedTech Master Plan impact Southern Implants’ operations?
GB: The easiest way to develop new products is by expanding upon existing ones. We are very open to joint ventures or collaborations with other MedTech companies. For example, companies specializing in spinal implants, which are quite similar to the items we produce, present great opportunities for contract manufacturing or partnerships.
We possess the people, knowledge, and skills necessary for such ventures. Leveraging the existing infrastructure of companies that already understand MD SEP and ISO 13485, and are certified by notified bodies, is far more efficient than starting from scratch with a new product line. Developing new medical devices often involves lengthy clinical trials, potentially taking up to 10 years. Instead, collaborating with other market players to build on existing strengths and seeking win-win situations is a more pragmatic approach.
EF: What advice would you give to a business leader who is willing to invest in South Africa?
GB: Major car manufacturers are announcing developments here. The cost advantages here include ample factory space and lower labor costs. South Africa also operates in the same timezone as Europe. Additionally, English proficiency and favorable regulatory environments make it an easier place to operate. European manufacturers, such as BMW, also recognize these advantages, and their first plant outside Germany was in South Africa. It remains today a major facility, processing all the leather for BMWs worldwide. These examples highlight the niche opportunities available here.
South Africa has the necessary infrastructure for medical devices, including gamma radiation plants for sterilization and high-quality testing laboratories. Unlike some countries, which lack these essentials, South Africa's robust infrastructure supports advanced manufacturing needs. Our academic institutions contribute significantly to the skilled workforce, especially in fields like bioengineering and metallurgy. Moreover, the country’s experience in the armaments industry has fostered expertise in working with difficult materials, which translates well to medical device manufacturing.
The presence of companies certified for ISO 13485, like those specializing in 3D printing with titanium, underscores the high standards maintained here. South Africa has reliable supplies of clean, high-quality water for washing products and plastics for packaging. The question about the fit of this environment for medical manufacturing highlights an opportunity for the country. The necessary foundations are in place, and it just needs to expand. Companies looking for high-quality, cost-effective manufacturing should consider South Africa as an alternative to China. The quality of local knowledge and infrastructure makes it a promising hub for further investment and development.
EF: What are your proudest achievements during your time as leader of the company and what can you look forward to in the next years?
GB: Despite enticing financial offers from potential buyers, our belief in the value of a family-owned and operated company has guided our philosophy. All three of my children are now involved in the company after gaining marketing and engineering degrees as well as work experience elsewhere. We have carefully considered our options, including going public or selling to larger corporations, but ultimately chose to remain independent. While this entails risks, it also ensures stability for our employees, who are more crucial to us than investors. We have 200 people locally and 100 overseas, and loyalty is a two-way street. We prioritize assuring our team that their jobs are secure and that we are committed to their well-being.
This approach diverges from the prevalent mindset, especially in American business culture, where building and selling quickly is often the goal. However, we prioritize sustainability over rapid growth and aim to maintain this business for multiple generations. We recognize the importance of stability for our employees and believe that this model best serves their interests.
Environmental responsibility is another important consideration for us. Given that most of our country's electricity is generated from coal, we made a significant investment to transition our operations to solar power. This move not only aligns with our values but also benefits our machinery, which operates more efficiently with clean energy. Furthermore, we are striving for water independence by harvesting rainwater during thunderstorms, storing it in tanks, and using it for our operations. Our commitment to environmental stewardship reflects our broader ethos of responsible business practices.
To improve material wastage, we focus on maximizing the use of titanium rods to produce implants and minimize scrap. We are committed to using materials responsibly and recycling packaging materials. We strive for environmentally friendly packaging solutions. Our dedication to sustainability has been recognized by the largest dental implant company in the world, which has set long-term environmental goals that we have already surpassed. This ability to make swift, independent decisions allows us to stay ahead of the curve and invest in areas others might overlook.
Our approach includes taking long-term views, understanding that dental implants often fail after ten years, and aiming for our products to last a lifetime. We conduct extensive long-term studies to ensure the longevity and reliability of our implants, reflecting our commitment to integrity and excellence. This value system, centered on integrity, drives us to do everything as correctly and responsibly as possible.
