Vigilenz Devices born out of founder’s ‘creativity plateau’

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Ten years ago, S. Choudhury made the bold leap into the world of
entrepreneurism after being a paid employee for 20 years. “My
creativity reached a plateau and I knew it was time for me to try
something on my own,” is how he describes the motivation to leave his
comfort zone.

Instead of opening a restaurant or taking up a franchise outlet,
Choudhury stayed in the industry he knew best, medical devices, and
decided to solve a problem that has long bugged him — the lack of
local players in this field. He felt that he could do things better,
despite the limited resources he started with and knowing the inherent
bias against local made products by Malaysian buyers. Add to this the
fact that deals are done based on relationships and by going through
third parties which puts a tight squeeze on margins.

But Choudhury persisted and today, his company Vigilenz Medical
Devices, sees 60% of revenues coming from overseas. His frustration
with the lack of support from the government has also been tempered by
the entry of Pemandu throwing its support behind the development of
the medical devices sector in Malaysia. Notes Choudhury: “Without
them, we would still be lost in a maze.” What he means is that Pemandu
has helped local players such as him to connect with the relevant
agencies that are supposed to help local players such as himself in
this niche.

Naturally the bulk of the effort comes from the entrepreneur himself.
Especially when it comes to the all important standards that have to
be met. As medical devices have high safety concerns around their
usage, adopting standards and certifications are a must. Choudhury had
to invest in a system certification specific for medical devices known
as the  ISO 13485. The first time cost for this set him back RM60,000
with subsequent yearly audits running at between RM35,000 to RM40,000.
This is then followed by getting product certification for the various
countries he is exporting into.
“These include the FDA [for US entry], CE [European], TGA[Australia],
CMDCAS [Canadian], just to mention a few,” he says adding, “These are
expensive accreditations.”

Yet there is no choice if one is keen on targeting these markets. For
a class lll certification, the highest risk, (his is the only
Malaysian company to date which has this) a single product
accreditation from start to finish would cost between RM180,000 to
RM200,000.

Asked if he feels that the standards that need to be met when
exporting are, in reality a form of trade barrier, he says that the
standards are actually necessary. “But there are traits where the
barrier elements surface. Also in some of these countries you need a
local sponsor to ensure that you can sell there. For example in
Central European countries you need local legal rep instead of a sales
representative.”

As to his thoughts on regulations in the local healthcare market,
Choudhury points out that, in Malaysia, regulations have not been
fully implemented as yet. “They are still voluntary but there are
plans already to make them mandatory. This is essential not only for
imported goods but also for locally manufactured goods. The
authorities should have stringent rules governing local manufacturing
as this can impact exports and other genuine players locally,” he says.

What he means here is that by imposing stringent regulations on the
quality of medical device makers, the quality of the manufactured
devices will be high and will enable them to meet the standards of
other countries to and thus be able to export there. It costs more to
meet the higher standards but the payoff comes with being able to
target export markets too.

The danger if Malaysian regulations are not stringent is that new
players can invest less to get into the space and price their products
lower than players such as Vigilenz which have higher costs but make
higher quality products.

While keeping an eye on impending local regulations, the game plan for
2013 for Choudhury is to increase sales on the domestic front while
continually looking for overseas business.

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