Terumo Corporation

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Terumo Corporation

44-1, 2-chome Hatagaya, Shibuya-ku
Tokyo 151-0072
Japan
Telephone: ( + 81) 3-3374-8111
Fax: ( + 81)3-3374-8399
Web site: http://www.terumo.co.jp

Public Company
Incorporated: 1921
Employees: 7,412
Sales: ¥176.05 billion ($1.39 billion)(2001)
Stock Exchanges: Tokyo
Ticker Symbol: 4543
NAIC: 339112 Surgical and Medical Instrument Manufacturing; 339113 Surgical Appliance and Supplies Manufacturing; 339113 Surgical Appliance and Supplies Manufacturing; 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing

Based in Tokyo, Terumo Corporation is Japan’s largest manufacturer of medical supplies. The company is also active worldwide, with subsidiaries and manufacturing facilities in the United States, Belgium, Germany, the United Kingdom, India, the Philippines, and China and nearly 70 sales offices worldwide, including 38 office in Japan and 28 sales offices internationally. Terumo manufacturers and distributes a wide range of medical products, equipment, and supplies: drip-feed and enteral nutriment supplements and delivery systems; disposable medical equipment, including syringes, drainage tubes, and dressings; blood collection and processing equipment; angiog-raphy and other catheters; dialysis equipment and supplies; cardiopulmonary equipment; blood glucose monitors; hospital-grade medical electronic products; and home medical supplies and instruments such as thermometers, the company’s first product. Terumo also acts as a Japanese distributor for third-party products. Pharmaceutical products account for 23 percent and the largest share of Terumo’s sales, which topped ¥176 billion ($1.39 billion) in 2001. Catheter systems represented 20.5 percent of sales. Terumo targeted the cardiovascular systems segment as its main growth segment at the beginning of the new century. In 1999, the company acquired the CardioVascular Systems division of the 3M Co., a move that helped it strengthen its position in that worldwide market. Terumo is listed on the Tokyo Stock Exchange and is led by chairman and CEO Takashi Wachi.

Founding and Growth: 1920s–60s

In 1921, a group of physicians and medical scientists joined together to form the Sekisen Ken-onki Corporation in order to develop a newer and more reliable clinical thermometer. Leading the group was famed Japanese medical researcher Dr. Shibasaburo Kitazato, who had graduated from the University of Tokyo’s medical school before continuing his studies in Germany under researcher Robert Koch. Kitazato also collaborated with Emil von Behring, and in 1890 the two men became credited with discovering antitoxins for tetanus and diphtheria. Their work led to the development of antitoxin treatments for a variety of diseases. After returning to Japan, Kitazato was named director of the country’s Institute of Infectious Diseases. In 1894, Kitazato succeeded in identifying the bacteria causing bubonic plague, and at the end of the decade identified the dysentery virus. In 1914, Kitazato was named dean of the Keio University medical school in Tokyo.

Kitazato’s presence among the founding members of the Sekisen Ken-onki Corporation helped the young company quickly gain credibility in the Japanese medical market. In 1922, the company released its first thermometer, the Jintan Taionkei, the first in a line of Jintan-branded thermometers. The success of that product led the company to change its name in 1936 to Jintan Taionkei Co., which became the leading manufacturer and distributor of clinical thermometers to the Japanese market.

Following World War II, Jintan Taionkei continued developing its core thermometer line. In 1954, the company developed a new method of producing its thermometers using a vacuum filling technique. The resulting thermometer helped the company further strengthen its leadership position in Japan. Jintan Taionkei had also begun to diversify its product line, entering the broader clinical medical supplies market. In 1963, the company launched a new product—a disposable syringe, the first to become available in Japan—and soon after was making a number of disposable medical instruments.

At the end of 1963, the company change its name again and became Jintan Terumo Co. Ltd. The following year, Jintan Terumo scored another first in Japan when it introduced disposable hypodermic needles to the domestic market. During the same year, the company began selling a line of vacuum blood tubes for use in blood sampling. At the end of the 1960s, Jintan Terumo added another branch to its clinical supplies operations when in 1969 it launched a line of blood bags, once again a new product for the Japanese market and one that helped strengthen the country’s blood supply network.

Diversified International Medical Supplier: 1970s–80s

Jintan Terumo turned to the international market in the early 1970s. In 1971, the company launched two new subsidiaries, Terumo America (later renamed Terumo Medical Corporation) in New Jersey and Terumo Europe in Belgium. Terumo Corporation, as the company was renamed in 1974, supported its international and domestic expansion with the release of new products and the entry into new product categories. Such was the case in 1973, when the company began manufacturing and distributing its own line of catheters and urine bags. That same year, Terumo began producing intravenous solutions in soft plastic bags, another first for the Japanese market, enabling the company to take a leading share of the country’s intravenous medicinal solutions market. The company continued to develop its soft bag delivery business, and in 1980 released the first soft-bag nutrient solutions line for the Japanese market.

During the 1970s, Terumo had begun developing hollow fiber technologies that were to help it impose itself on the international market. In 1977, the company released its first generation of hollow fiber dialyzers, a product that enabled it to enter the market for the manufacturing of artificial organs. In 1982, the company’s continued development of its hollow fiber technology enabled it to present another breakthrough, a hollow-fiber oxygenator. Called the Capiox II, the new product was the world’s first available hollow-fiber oxygenator and helped establish Terumo as a major medical products innovator.

The company’s innovations continued through the 1980s. In 1983, the company released a “predictive” digital clinical thermometer. The following year, Terumo ended production of its mercury-based thermometers as it shifted to using other materials and technologies, such as the development of infrared-based thermometers. Then, in 1985, Terumo entered a new product category, unveiling the first of its diagnostic and surgical intervention catheter products, the Radifocus guidewire for angiography. The company’s catheter operations were to grow into one of its key revenue producers.

While much of the company’s product development remained targeted at the clinical medical market, Terumo entered the home medical products market toward the end of the 1980s. In 1988, the company released two such home medical products, an automated peritoneal dialysis system and a digital blood-pressure monitor. The following year, the company boosted its research and development operations with the opening of a new facility, the Shonan Center, in Nakai-machi, Kanagawa.

Medical Products Leader: 1990s and Beyond

Terumo remained Japan’s leading supplier of medical products in the 1990s, with four production facilities in addition to its new research and development center. The company was also making inroads into the international markets, opening 28 branch offices in addition to its foreign subsidiaries and extending its product reach to some 150 countries by the end of the decade. Terumo’s growing business in other Asian markets led it to move closer to these markets in the mid-1990s.

In 1995, Terumo opened its first Chinese subsidiary, in Hangzhou City, which took over manufacturing of a number of Terumo’s products for the Japanese market. A second Chinese subsidiary was created the following year, in Changchun City, as the company stepped up its exports to the broader Asian market. Meanwhile, in 1997, Terumo launched a new subsidiary and manufacturing facility in the United Kingdom which began production of blood lines for the company’s oxygenator products. At the same time, the company began targeting the central and eastern European market for further growth, opening a branch office in Vienna, Austria, that took over responsibility for the company’s marketing and sales in that country as well as in Hungary, Slovakia, the Czech Republic, and Switzerland.

Company Perspectives:

TERUMO Values— Contributing to Society Through Healthcare: We contribute to society by providing valued products and services in the healthcare market and by responding to the needs of healthcare providers and the people they serve. Open Management: We maintain a fundamental policy of open management, work to secure and return to our benefactors a suitable profit, and strive to develop our business on a global basis as befits a leading company in the industry. Enhanced Value: We emphasize the importance of scientific thinking, creativity, and time appropriation, and respond in depth to customer needs by creating valued products and services. Safety and Reliability: We pride ourselves on our commitment to the development of technologies and quality assurance systems that ensure safe, reliable products. Respect for our Associates: We emphasize respect for the individual, promote intercultural understanding, and encourage openness in the workplace in accordance with our slogan “Associate Spirit” as we prepare to meet the challenges of the future. Corporate Citizenship: We conduct our business activities in a fair and equitable manner and act responsibly toward the environment as we fulfill our responsibilities as good corporate citizens.

In the second half of the 1990s, Terumo continued moving closer to its international markets. In 1997, the company began exporting its manufacturing processes, bringing its oxygenator manufacturing technology over to its Terumo Medical Corporation subsidiary in the United States. That same year, Terumo’s European operations were boosted with new technology, leading to the creation in Belgium of both a new facility for production of the Radifocus catheter systems range and, in 1998, the launch of production capacity for the company’s sterile tubing products. In the United States, Terumo’s Elkton, Maryland, plant had become a state-of-the-art, $100 million facility with nearly 500,00 square feet of production space on an 88-acre site.

In Japan, the company’s manufacturing park was also evolving, including the combining of its production operations from two plants into a single, new 200,000-square-feet facility in Nakakoma-gun, where such products as syringes and syringe needles, urinary test paper, and topical medications were produced. That facility began operations in 1998. The following year, Terumo stepped into the Indian market, acquiring 74 percent of that country’s Peninsula Polymerts Ltd., which was then renamed Terumo Penpol. That company produced blood bags for India and other markets.

A major step forward in Terumo’s international ambitions took place in 1999 when it acquired the CardioVascular Systems operations from the 3M Co. The purchase gave Terumo operations amounting to $100 million per year and strengthened the company’s interests in the cardiovascular products market, which became a key company target area at the turn of the century. The 3M operations were combined with Terumo’s existing business to created a new subsidiary, Terumo Cardiovascular Systems Corporation. The company also launched two new products lines in 1999: coronary stents, the first to be manufactured in Japan, and two lines of prefilled syringes, a market that appeared certain to grow strongly in the coming years.

Terumo continued to expand its operations as it celebrated its 80th anniversary. In 2000, Terumo opened its newest production facility, in the Philippines, in order to produce syringes and other products to meet the surge in demand in the southeast Asian market. The company also doubled the size of its Hangzhou, China, facility. In 2001, the company reached an agreement with fellow Japanese company Tanabe Pharmaceuticals to launch and market a line of prefilled atropine sulfate syringes. Later that year, the company reached an agreement with Switzerland’s Disetronic group to act as exclusive Japanese distributor for Diesetronic’s portable insulin pump products. Terumo continued to take steps to increase its position in the worldwide market, including the establishment in May 2002 of a dedicated sales and marketing subsidiary for its South and Central American operations. Terumo had earned itself a place as an important player in the worldwide medical supplies market.

Principal Subsidiaries

Terumo Europe N.V. (Belgium); Laboratoires Terumo France S.A.; Terumo (Deutschland) Gmbh (Germany); Terumo Cardiovascular Systems Europe Gmbh (Germany); Terumo Medical Corporation (U.S.); Terumo Latin America Corporation; Terumo Medical De Mexico S.A. de C.V.; Terumo Medical Do Brasil Ltda (Brazil); Terumo Cardiovascular Systems Corporation (U.S.); Terumo (Thailand) Co., Ltd.; Terumo Marketing Philippines, Inc.; Terumo Medical Products (Hangzhou) Co. Ltd. (China); Changchun Terumo Medical Products Co. Ltd. (China); Terumo (Philippines) Corporation; Terumo Penpol Ltd. (India).

Principal Competitors

Eli Lilly and Co.; Siemens AG; RWE AG; Royal Philips Electronics NV; Abbott Laboratories; Wyeth; Asahi Kasai Corporation; Baxter International Inc.; Smiths Group plc (SHIN); GE Medical Systems; Medtronic Inc.; Fresenius AG; BOC Group plc; Allegiance Corporation; Baxter International Inc.; DAIICHI PHARMACEUTICAL CO., LTD.; Eisai Company, Ltd.; Johnson & Johnson; Owens & Minor, Inc.; Takeda Chemical Industries, Ltd.

Key Dates:

1921:: Dr. Shibasaburo Kitazato leads a group of physicians and medical scientists who form the Sekisen Ken-onki Corporation in order to develop a newer and more reliable clinical thermometer.
1922:: The company’s first clinical thermometer, the Jintan Taionkei, is launched.
1936:: The company changes its name to Jintan Taionkei Co.
1954:: The company develops vacuum mercury filling technology for its clinical thermometers.
1963:: The first disposable syringes are launched; the company changes its name to Jintan Terumo.
1971:: Subsidiaries Terumo America (later Terumo Medical Corporation) and Terumo Europe are established.
1974:: The company changes its name to Terumo Corporation.
1982:: The first hollow-fiber oxygenator is launched.
1999:: Terumo acquires CardioVascular Systems operations from the 3M Co.
2001:: The company forms a marketing agreement for a new line of prefilled syringes with Tanabe Pharmaceuticals.
2002:: Terumo reaches a distribution agreement for portable dialysis pump with Switzerland’s Disetronic Group.