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Market Overview
Although the U.S. market comprises almost 70% of the total world market for IV solutions, the market for third world and emerging nations is growing much faster and presents a tremendous opportunity for the IVPC Facility™. This growth is due to the building of better and higher quality health care institutions and other health care infrastructures in areas once deemed dormant.
World market growth is driven by population increases and constant up-scaling and sophistication of health care delivery. As part of this up-scaling, IV infusion therapy is becoming increasingly important in overall health care treatment regimens as new developments in antibiotics and other medications used in areas such as chemotherapy, burn centers, and renal/peritoneal dialysis centers favor intravenous use and application.
Many countries continue to rely on imported product, which is often too expensive for the general population to afford. Frequently, where product is made locally, the quality is poor and the costs are still high. In addition, the lack of inexpensive and readily available supplies of IV solutions in many developing nations has lead to a high incidence of death from non-mortal injuries and non-terminal diseases. The IVPC Facility™ provides an immediate and inexpensive remedy to this situation.
Economic Profile
The economic advantages of producing IV solutions locally in emerging and medically developing nations via EWMA IVPC Facility™ can result in an extremely short return on initial investment. Profitability can be established at only 50% production capacity.
• Direct production costs using U.S. cost figures are 45% to 65% lower than current market pricing for primary product lines. Under the U. S. calculation. direct and indirect labor costs comprise the largest single cost element. In emerging nations, where the cost of labor is much less and the cost of IV solutions often is much higher, the actual production cost figures can be 60% to 90% lower than market pricing.
• Secondary product lines with significantly higher profit margins can be introduced at any time to greatly enhance profitability.
• Long distance shipping costs are not incurred with the regional target market creating significant savings on distribution costs.
• Demand for IV solutions is so great that should production exceed local demand. opportunities for national and export sales are unlimited in the foreseeable future.
• Local labor is trained in the technology and employed by the facility. The efficiency of the technology allows for a small staff of personnel to maintain rated production capacity.
• Most raw materials are available locally.
Table IV - Potential Profit Margins on 6 Million Unit/Year IVPC Facility
|
High
|
Low
|
Average
|
| Market price Per Unit |
$1.43
|
0.81
|
1.14
|
| Estimated Production Costs Per Unit* |
0.41
|
0.41
|
0.41
|
| Pre-tax Profit Per Unit |
1.02
|
0.40
|
0.73
|
| Profit Marign |
71%
|
49%
|
64%
|
| Gross Profit on 6 million units/year |
$5,520,000 |
1,800,000 |
3,780,000 |
In general, the IVPC Facility™ variable production costs (direct labor, supplies, utilities, etc.) are similar to those of competitors, while overhead and fixed costs (management and administrative salaries. rent. distribution. marketing. and amortization) are considerably less. Substantial savings alone are realized in the area at transportation and distribution.
* Production costs include equipment amortization and are based on U. S. labor rates. Actual production costs in developing nations will be less due to the less expensive labor rates commonly found in these countries.
Domestic Consumption
By Hospital- 4 Units per inpatient day in the typical U.S. hospital. Annual IV solution consumption calculated as in following example:
1,000 beds x 80% occupancy rate x 365 days x 4 units/day = 1,168,000 units/year
By Patient- 3.33 units for each person in the total U.S. Population. Total U.S. consumption at over 1 billion units/year.
 
Market Comparison:1990 vs. 1997
Total fluid drug delivery systems market: percent of revenues by geographical region.
World Market Consumption
| Country/Regieons |
Population in Millions |
Avg. Comsumption Per Capita |
Total Consumption in Liters |
| China |
1,200 |
1.0 Liter |
1,200,000,000 |
| India |
943 |
1.0 Liter |
934,000,000 |
| Indonesia |
193 |
1.0 Liter |
193,000,000 |
| Pakistan |
130 |
1.0 Liter |
130,000,000 |
| Bangladesh |
121 |
1.0 Liter |
121,000,000 |
| Brazil |
162 |
1.5 Liter |
243,000,000 |
| Nigeria |
111 |
1.0 Liter |
111,000,000 |
| Russia |
149 |
2.0 Liter |
298,000,000 |
| Asia |
722 |
1.0 Liter |
722,000,000 |
| Africa |
643 |
1.0 Liter |
643,000,000 |
| South America |
165 |
1.5 Liter |
248,000,000 |
| Central America |
135 |
1.5 Liter |
203,000,000 |
| Eastern Europe |
102 |
2.0 Liter |
204,000,000 |
| Western Europe |
388 |
3.5 Liter |
1,358,000,000 |
| Japan |
125 |
3.5 Liter |
437,500,000 |
| USA/Canada |
290 |
4.0 Liter |
1,500,000,000 |
| others |
130 |
2.0 Liter |
260,000,000 |
| Grand Total |
5.7 billion |
|
8,752,000,000 |
Consumption Criteria:
1 liter bags (10%), 500ml bags (80%), others (10%)
total annual consumption = 18 billion 500ml units approx.
Production expectation at 5.4 million units annually meets approx. 2.5 hours consumption
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