Australia's SomnoMed finds Philippines ideal Manufacturing hub

SomnoMed is seen as an "employer of choice" by the Philippine government. Jessica Hromas

SomnoMed finds Philippines ideal hub for its sleep devices

-by Mark Eggleton

For sleep device manufacturers SomnoMed, the decision to manufacture in the Philippines was based on having a historic connection to the country. The company's Australian-designed non-invasive oral appliances were being manufactured by a third party in the Philippines when in 2009 it took the decision to set up its own operation.

Neil Verdal-Austin, executive vice president for Asia-Pacific, said once the decision was made it took until February 2010 before SomnoMed flicked the switch on its own facility.

"We stayed in the Philippines because we knew the country and its infrastructure from our existing relationship so we set-up a separate business, acquired premises, imported equipment and employed a number of locals," he said.

As to why the company chose the country as its manufacturing hub, Verdal-Austin cites the Philippines location in Asia and reach and access into other markets.

"You're looking at distribution into Asia very quickly as well as good access into the United States and one stop into all the major hubs of Europe," he said.

The Philippines' strong reputation as a business processing hub works well for an advanced manufacturer such as SomnoMed. Mr Verdal-Austin said as the company's SomnoDent product has evolved into an intelligent device that monitors sleep patterns, the Philippines' already strong IT infrastructure has proved a boon.

Suitable workforce

"We also have access to a workforce that's well-educated with proficient English skills and an easy to manage cost base," he said. Moreover, as more companies move some operations into the country, business clusters are developing with SomnoMed's facility now in close proximity to a number of global pharmaceutical companies.

Mr Verdal-Austin said before establishing the manufacturing operation the company was aware of the potential pitfalls through their previous relationship with a third party manufacturer.

"There were a lot of hoops and hurdles to get going and little bit of time-wasting but we're aware of our responsibilities and ensure we're on top of all our regulatory requirements and the renewal periods for permits and licenses. We're seen as an employer of choice by the Philippine government and our employees are well-paid and offered a health plan."

SomnoMed's biggest markets remain Japan and South Korea but the company has a distributor in Singapore looking after the ASEAN nations.

"All of these countries are at different stages on the curve of medical treatment but it's a very exciting region and [as each country becomes more affluent] we know we'll penetrate even further into these markets," Mr Verdal-Austin said.

"For a company like ours it's about educating the medical fraternity to change their prescribing behaviour and getting medical associations to accept and adopt the treatment." - The Australian Financial Review