Sorin Group has announced an integration plan for its Cardiopulmonary business, part of its Cardiac Surgery Business Unit. The goal is to further strengthen the Group's market position and to deliver superior customer focus, continuous innovation and a competitive cost structure by improving the manufacturing flexibility, time-to-market and costs efficiency for its cardiopulmonary (CPB), heart-lung machine (HLM), autologous blood transfusion (ATS) and blood management (BM) product lines. The plan completes the overall industrial restructuring and cost reduction programme aimed at fully realizing all the Group's untapped value.
Until now, Sorin Group has been operating in the Cardiopulmonary field with three companies - Cobe Cardiovascular, Dideco and Stöckert. In the future, full global integration will be pursued and reached with the three units fully acting as one, with a shared vision, a global business strategy, a global organization, global processes in innovation, marketing, regulatory, manufacturing and supply chain, and under a common Sorin Group brand. The new fully-integrated unit will work out of three sites - Denver, Mirandola and Munich - with each site acting as a center of excellence focused on specific missions and competencies.
A few fundamental strategic business decisions and objectives triggered the definition and launch of the integration plan:
Consolidation of the Oxygenator product lines into a single best-in-class platform for worldwide markets. Pursuit of breakthrough innovation by developing an integrated system for patientoriented extracorporeal circulation.
Leverage of worldwide recognized excellence in HLM to further strengthen the competitive position in ATS.
The focus of operations in Denver (US), Mirandola (Italy) and Munich (Germany) is going to be redefined, with the establishment of centers of excellence, the elimination of duplicated manufacturing activities and concentration of manufacturing at the most cost effective locations. In particular:
Denver operations will focus on: ATS disposable sets assembly, as well as PTS (perfusion tubing systems) design and assembly, for North American customers; distribution of Sorin Group products in North America. In addition, Denver will continue to grow as the Headquarters of Sorin Group's North America Region with Group Sales, Field Marketing and Shared Services.
Mirandola will host the worldwide production of Oxygenators and ATS bowls, as well as: ATS disposable sets assembly, and PTS (perfusion tubing systems) design and assembly, for the International Region (Europe and RoW) customers; distribution of CPB/ATS disposables for the International Region.
Munich will host the worldwide manufacturing of all Cardiac Surgery equipment. In addition, it will serve as worldwide distribution center and technical service center for such equipment.
The integration plan will also carry the additional benefit of allowing the outsourcing of low value added activities. The implementation of the plan and the transfer of the production processes, which will start immediately, will be carried out with the fundamental goal of preserving the highest quality and reliability standards, and ensuring full compliance with regulatory approvals received from the FDA and the European Union, while providing for an effective transition to the single Oxygenator platform.
"The expected yearly cost savings from the plan will be 10 million euros in 2009, and will start to significantly impact our bottom line already in 2007," said Franco Vallana, President of the Sorin Group's Cardiac Surgery Business Unit. "Implementation of this plan represents a further step in our relentless pursuit of manufacturing excellence and operating efficiency, and will further strengthen our leadership position in the Cardiopulmonary business," added Drago Cerchiari, Sorin Group's CEO.
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