industrial policy, its spatial aspects and cluster development in ...

Chinese products fetch (US$0.35 – in disposable products). However, the price is lower
than some of the more sophisticated producers such as Germany and France.
Table 3‐6: Surgical Industry Characteristics
Characteristic Value
Number of units Over 2300
Total installed capacity 225 – 250 million pieces
Current production 150 million pieces
Contribution to national exports 1.21%
Contribution to GDP 0.41%
Sector Employment 100,000 – 150,000
Capital labor ratio 10 workers / million (Rs.)
Total estimated investment Rs 12 billion
Source: BOI reports, CMI data and PEFMA interviews
The sector comprises over 2300 companies, of which around 30 can be considered large
and the remainder can be split as 150 units of medium sized and remaining as small.
Besides small and medium units, a few units are large and have a 90% integrated
system. Most of the larger and medium sized firms are exporting, however, the
smaller/vendor units usually supply to commercial exporters/traders. The main raw
material used in the production is ‘steel’. Around 60% of this steel is manufactured
locally and the remaining 40% is mostly imported from Germany.
The categories of firms can be divided in to three tiers. The tier 1 firms are the ones that
are technically advanced and have exports over Rs.100 Million. These are technically
advanced firms with lot of mechanization. These are also the firms which have shifted
some of their production out of the disposable instruments and moved into more
sophisticated products such various medical devices. Tier 2 and Tier 3 firms are
predominantly involved in making basic surgical components.
Figure 3-16 below compare the product split of world trade in surgical instruments (this
is HS Code 9018) with that of Pakistan. It is quite clear the device and apparatus
component of the trade is growing over time relative to basic disposable instruments. In
addition, the disposable instruments are fetching lower prices over time, whereas the
medical device industry has been climbing up the value curve. Pakistan has only grown
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