Invacare looks to China for savings

Sunday, November 16, 2003

November 17, 2003

ELYRIA, Ohio - Within the next few weeks Invacare expects to finalize a joint venture agreement that will allow it to transfer manufacturing of its bath safety products and ambulatory aids to China, the company announced last week.

Invacare’s products in these categories are priced about 20% higher than competing products, many of them also produced offshore.

“We can compete at a 5% to 7% premium because of the brand and all the value-added it brings, but when you get into the 20% range it is difficult,” said Susan Elder, director marketing communications.

Invacare CEO Mal Mixon announced the company’s plan to some off its offshore manufacturers last week at a presentation before the Cleveland Security Analysts.

The move is separate from the company’s new subsidiary, Professional Medical Imports, which offers a full line of DME products running the gamut from standard bent-metal DME to scooters and power wheelchairs. PMI manufacturers the vast majority of its ProBasic brand products product in China.

In another effort to cut costs, Invacare began a pilot program last week to move part of its customer service call center to India. Invacare currently fields 4,000 customer service calls a day. The eight trained customer service reps in India will handle the most basic calls, such as those from customers seeking information about an order or to order a very basic item. Questions regarding high-end equipment will still be answered by trained specialists in Elyria.

Invacare will evaluate the program in six months to see if it should be expanded, Elder said.