Envista sees dazzling future ahead in China

Rising affluence, changing demographics, and the increasingly sophisticated consumers have fueled international dental health giant Envista's confidence in China, where experiences in technology and high-end manufacturing can feed into other markets, said the company's CEO Paul Keel.

He made such comments during an exclusive interview with China Daily on Tuesday, when the company's new facility in Suzhou of East China's Jiangsu province was officially put into use. Attracting a total of 1 billion yuan ($149 million), the new project has been the single largest investment that Envista has made in China since its first footprints here two decades ago.

"To be a global leader in dental, you have to be a leader in the biggest dental markets," he said.

The factory will locally produce Nobel Biocare implants and Ormco orthodontic brackets for the first time in China, that premium products were manufactured only in Europe and the United States.

"We did not invest here because of lower-cost labor or construction materials. We came here because it is a more capable manufacturing environment," said Keel.

Different from 20 years ago, multinational companies now come to China to take advantage of the technology, for "it is further ahead than other parts of the world in many cases", especially in automation, software integration, vision systems and visual inspection, according to Keel.

The same logic applies to Envista. Manufacturing the four series of products in the new Suzhou facility, including clear aligners, brackets and wires, dental implants and intraoral scanning electronic device, the technologies used in the new project will lead all of the other plants.

With a headcount of about 600 employees, the Suzhou project will have a completely automated warehouse system integrating robots. Though Envista has early version of this in other factories, the Suzhou facility will be the company's first scaled test, which will be replicated elsewhere, said Keel.

For the clear aligners, Envista used to develop the manufacturing technology in California, where the company is headquartered, and spread it across its facilities in Mexico, the Czech Republic and China. But the Suzhou facility operates at such a high level that the whole process has been changed: the newest production steps will be developed here and sent back across the rest of the world, he added.

The rising disposable income of Chinese people, the aging population and rising awareness of dental health will serve as major business drivers for Envista in China. Meanwhile, the company will work more closely with distributors in the fourth- and fifth-tier Chinese cities where growth potential is huge, according to Keel.

On top of that, the volume-based procurement program in China has helped to lower the cost of dental care provisions. Envista has already participated in that for dental implants and will join those for clear aligners as well as brackets and wires, he added.

According to global consulting firm Markets and Markets, the China dental implants and prosthetics market is projected to be valued at around $423.5 million in 2026 and will further rise to $649.2 million by 2031, representing a compound annual growth rate of 8.9 percent.

Last July, Envista signed agreements with the local government to land the new project. According to Keel, the quick advancement of the Suzhou facility is a snapshot of the improving business environment in China, as the local government has rendered much help in navigating the regulatory requirements across multiple sectors including construction permits, environmental permits, and medical device administration, among others.

Despite the rising headwinds and geopolitical tensions in the global market, Envista's confidence in the Chinese market remains unchanged.

"We have been in operation for 135 years in over 120 countries. We have seen every kind of economic cycle and every type of government. We have a large business in China. The investment is certainly about today but mostly about the future. Whatever tensions there are currently in the world, it will be different five or 10 years down the road. We will be glad that we made the investment today," said Keel.

According to Beijing-based HDIN Research, Envista is the world's second largest dental implant manufacturer, taking up 16 percent of the world's market share, only next to Switzerland-based Straumann, which accounts for 28 percent of the market share. Latest fiscal data showed Envista's sales revenue jumped 7.1 percent year-on-year to reach $731 million in the quarter ended July 3.