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EXECUTIVE INTERVIEW

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With a determined focus on the patient and a strong history of innovation and leading technology, Cook Medical is shaping the future of medicine in the AsiaPacific region.

Market
We are campaigning for an Australian innovation and manufacturing incentive. This would reward companies that come up with a product and go on to manufacture it in Australia, rather than having it assembled overseas. - Barry Thomas
The National Tax and Accountants Association are also looking at it. Weve had responses from both major political parties, and Sophie Mirabella, the federal member for Indi, Victoria, has reached out and said she wants to come and talk to us about it. Weve also had Greg Combet [former Minister for Industry and Innovation] here to talk to us about it. The sad part is when some of the public sector and government send people here who suggest that we could move our manufacturing overseas, and that attitude simply isnt good for the country. While weve got money at the moment, we all know that mining is finite and subject to everything else thats happening in the world. What are we going to do for employment going forward? Ford has announced theyre closing their factory because Australia cant compete in car manufacturing. We think there is an opportunity in this high-tech industry and the health industry for Australia, and thats what were committed to.

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ne of the worlds best known and most respected names in medical devices and supplies, Cook Group, has operations spanning from the United States to Europe, Asia, and Australia. As Asia embraces Western medicine and emerging markets grow exponentially, Cook Medical is providing doctors with cutting-edge technology and tailor-made medical devices. Since 2009, Managing Director of Cook Australia and Director of Cook AsiaPacific Barry Thomas has upheld the companys longlasting commitment to healthcare. Business Director Magazine recently sat down with Barry to discuss the shifting state of the Asia Pacific region and Cook Medicals role in the future of its healthcare. Business Director Magazine: What initiatives have you implemented to ensure Cook Medical remains at the forefront of medical research and equipment? Barry: In Australia and in the AsiaPacific, weve been looking at raising our profile within the biotech industry and the med-tech industry. Were looking for inventors and people who have ideas, and we encourage them to work with us. Were also more generally looking for opportunities for the industry. We believe that Australia should be able to capitalise on this, especially because it has so much experience in this area. We have the research and development tax incentive in place, and over the past six or so months, we have been looking at how we can extend that into manufacturing. We are campaigning for an Australian innovation and manufacturing incentive [AIM]. This would reward companies that

come up with a product and go on to manufacture it in Australia, rather than having it assembled overseas. Whats involved in the incentive? Having consulted with and secured the buyin of the Export Council of Australia, weve started to take the idea to policymakers. Rather than a direct subsidy, the AIM incentive would provide tax relief based on the retention of IP and manufacturing in Australia. Organisations would receive an inducement equivalent to 2 per cent of sales on locally manufactured products for which they hold patents or licences. The incentive would be offset against a companys tax bill, thereby linking it directly to commercial success and resulting in no upfront government costs. This is not a unique idea. Other countries are already doing this, and the United Kingdom has a version of it. Thats what were proposing. The United Kingdom has a tax incentive on manufacturing products developed in the UK. From the income that manufacturers make on their product, they only pay 10 per cent in company taxes rather than 26 per cent. One leading manufacturer which has reduced their footprint in Australia recently announced that its going to spend half a billion pounds in the UK setting up manufacturing facilities over there so it can take advantage of this tax incentive. Do you have other partners or industry bodies who are supporting you and the campaign? AusBiotech have been discussing it with us, and theyre looking at supporting the proposal.

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Business Director - October/November 2013 businessdirectormagazine.com

EXECUTIVE INTERVIEW

EXECUTIVE INTERVIEW

How do you ensure consistent staff engagement and efficiency? Its got to be a philosophical part of the company fabric. Globally, were still manufacturing in the US, and weve just opened a new plant there to support the local community. We also manufacture in Ireland and Denmark. Were structuring our business to focus on continuing to support the local communities as well as how we can do that on a global basis. We have a huge opportunity with China, India, Vietnam, and other developing markets, and were looking at how we can find products and ideas that are specific for those markets and develop them and work cooperatively and collectively so we can all benefit. Philosophically, youve got to keep employees interested. You must keep the skill levels up. You cant open and close factories on a whim, and youve got to retain those skills. Its about the cultural fabric of the companythats whats really importantas well as communicating that through the staff across the region. We look after everything from Japan to India out of our Australian office, so that includes China, Korea, Taiwan, Singapore,

Vietnam, Hong Kong, and many others. Its a huge opportunity for Australia if we work out how to capitalise it. How would you describe the culture across Cook Medical? What values are important to you? Were still a private company and we still do things based on the values of a private, family company. One of the great advantages we have is that we dont have the pressure of Wall Street

or shareholders, particularly the large corporate shareholders. Were able to take that money and invest it in development, staff, and our initiatives. Thats a distinct advantage for us, and its also a part of our culture. We have a flat management structure, and were very much focused on the family. We provide private health insurance to our employees, we have a subsidised canteen, and an enterprise agreement. The last enterprise agreement negotiations took a very short period of

Were starting to see lots of ideas and different technologies coming out of the AsiaPacific region, so were looking at how we can help and work with them to commercialise that globally. - Barry Thomas
time, and to be perfectly honest with you, I was involved in very little of it. Its really people sitting down and discussing their futures together in a cooperative fashion and not in a competitive manner. Were quite open and honest about things. We tell people, This is the pressure were under, the Australian dollar is creating a lot of pressure, and here are some of the decisions were going to have to make. Having said that, weve just bought a new needle-grinding machine from Japan and invested hundreds of thousands of dollars installing that in Brisbane. It really is a very committed and open company. How have you continued to develop strong relationships with suppliers and other strategic partners? Were very much in the middle of things because weve got people supplying us with products and then were also supplying right across the world and managing the Asia Pacific. We manufacture here and export around the world, so we have global suppliers. We value the relationships we have with those people. We prefer to continue to work with them and would rather have discussions that support the relationship and build on things. We have some unique structures that weve used including using a Cincinnati company that does our meetings and events infrastructure. Rather than opening an office in Hong Kong and employing people, we said, We will give you our office space, we will employ someone, and you pay us this amount of money on a monthly basis, but its your employee. Therefore, the individual is employed by us and answers to me, but they take all their instructions from the company in Cincinnati. It means that our suppliers dont need to go through the pain of setting up their own offices and busines in Asia. Setting up a payroll system and paying taxes in a foreign country is a big hassle, so we do all that stuff for them. Quite frankly, we dont charge them for that service because one person sitting in our office is such a minor addition. It saves them the hassle and gives us a service working very, very quickly. That has been an incredibly successful situation for us over the past 18 months or so. Weve done similar things with our publicrelations company. These are unique, but they create a really close working relationship where youre not just talking about a partner you are a partner. What are your plans for the future of Cook Medical? I get asked this question a lot and its like a trick question. In the next seven years, we see the business in this part of the world growing to two-and-a-half times or three times what it is now. The major growth areas are China, India, Vietnam, and Indonesia, as well as some smaller growth areas. We have a unique opportunity in Japan. Although its a highly developed market, their medical side is lagging behind the rest of the world, so there are opportunities for us there. The whole region is embracing Western health, and we see that continuing over the next 10 to 15 years. At the same time, were starting to see lots of ideas and different technologies coming out of the AsiaPacific region, so were looking at how we can help and work with them to commercialise that globally. Were also looking at the opportunity for addressing unique medical and disease needs out of the region.

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