Sialkot is the hub of manufacturing dental and surgical equipment or instruments in addition to sports goods and cutlery. The Sialkot based industry is not catering for the supply of surgical equipment to local market but it is also generating a handsome foreign exchange through exports. We need to encourage and promote this industry and try to expand its scope by incorporating electromedical equipment into it. For this we need to bring Gujranwala and Gujrat based industry which has some experience in the electrical and electronics manufacturing.
Over 99% of the Pakistan’s surgical instruments production is centered at Sialkot. 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. The industry produces on average over 150 million pieces a year with an estimated value of around Rs 22 billion. Out of the total production, approximately over 95% is exported. The industry belongs to the light engineering industry category, and is one that has specialized in skill and stable export market share. Sialkot’s surgical goods industry is responsible for 75 percent of Pakistan’s engineering exports. It produces over 2000 different instruments, mostly made from imported stainless steel. With a 20 percent share of the total world surgical goods exports, surgical instruments made in Sialkot are used by surgeons, dentists, and veterinarians throughout the world and are considered second in quality only to Germany, the global leader in this field.
Surgical goods and medical instruments worth US$ 23.7 million were exported during the month of July 2011 as compared to US$ 20 million in the month of July 2010. According to the data of Federal Bureau of Statistics (FBS), the surgical and medical instruments export was recorded at US$ 24.5 million during the month of June 2011.
This is one sector where Pakistan has developed special capabilities to penetrate high income markets such as Germany, USA, France, Belgium etc. The average export price of goods made in Sialkot is much higher than what Chinese products fetch, however, the price is lower than some of the more sophisticated producers such as Germany and France.
The sector, has suffered from lack of product diversification, inadequate shift out of low value disposable instruments to high value sophisticated products and uncertain business environment. The major impediments of the sector are low levels of productivity, inadequate technology upgrade and shortage of skilled staff. The production process value chain analysis suggests several productivity detractors. Moreover, most of the companies operate without any brands with only a couple moving to branding of their products. Furthermore, the industry in the years to come will face higher compliance requirements, especially as the industry tries to diversify into more value added products and enter into more sophisticated markets. Compliance, testing and certifications are going to be critical for the the surgical industry to move up the value curve. Some firms have developed basic design capabilities and often experiment by bringing in newer designs into the market.
This industry represents manufacturers and exporters of surgical instruments, dental instruments, veterinary instruments, tailoring scissors, barber salon scissors and beauty salon instruments. The surgical industry of Sialkot has a history of more than 100 years, when British doctors began to get their surgical instruments repaired from the skilled workers of the region. These craftsmen eventually began to successfully replicate the imported instruments. By 1920 Sialkot was exporting to all parts of the subcontinent and as far away as Afghanistan and Egypt, and was later selected for supplying surgical instruments for allied forces in World War II.
Excerpts from the 1920 Gazetteer of the Sialkot District provide interesting insights regarding the early years of the industry. ” Kotli Loharan consists of two large villages of Lohars [iron smiths] lying about five miles to the northwest of Sialkot. All kinds of articles for use and ornament are made, such as shields and arms, betel-nut cutters, knives, boxes, plates, inkstands, and so on. The material used is iron, and gold and silver are used in inlaying…. the lohars of these villages are now very well off [unlike what was reported by Mr. Kipling in the last Gazetteer], having earned large sums as armourers and shoe- smiths during the War. There are some twenty concerns which turn out manufactured articles of iron and steel, including swords, spear-heads, gurkha knives, razors, stirrups. The workmanship is excellent in most cases. At Sialkot, there are excellent Dental instruments, Elevator, Implant, Orthodontist, etc, turned out by one factory of Silver Hawks Industries. A new industry has also sprung up recently of making steel and iron trunks, office trays and cash boxes; this noisy trade has invaded the central part of town, near the Fort. There are about 500 iron-workers at Sialkot [Government of Punjab 1920, pp125]
When Sialkot started exporting surgical instruments, for the improvement of the standard, the Metal Industries Development Centre (MIDC) was established by the Government in 1941. In 1947, Sialkot inherited 17 registered surgical instruments manufacturers. Today, there are about 2200 large, small, and medium units with labor force ranging from 5 to 500 employees that are involved in this industry as either manufacturers or vendors. Many of the large setups have offices and joint ventures in importing countries. SCCI’s list of members registered as surgical instruments manufacturers includes 1,949 firms that employ roughly 80,000 workers and exported US$278 million worth of merchandise in 2009. Sialkot’s surgical instruments industry exports more than 95% of its production, which includes 60% of disposable and 40% of reusable surgical instruments, i.e. 100 million instruments annually. Its exports are made to over 140 countries, while the US, Germany, UK, France, Italy and UAE are the biggest customers. Currently Sialkot is producing 2,000 surgical instruments of various types for worldwide exports.
The industry has come a long way during the last seventy years. The Metal Industries Development Center [ MIDC] , initially established in 1942 to act as a supply and inspection agency for allied forces and later upgraded in 1947 and during the eighties to provide workshop facilities and advisory services to local industry, pioneering the introduction of several new technologies including drop forging hammers, vacuum heat treatment , and numerically controlled [ CNC] die making machines. During the nineties several international joint ventures with European firms were set up.
Of the roughly 3000 firms in this industry in 1994, only about 200 firms both manufactured and exported surgical goods. Another 600 firms were involved in trading, i.e. these firms exported surgical instruments but did not own any manufacturing facilities; instead they relied entirely on the vendor industry. Of these 600, only half could be categorized as serious exporters of surgical instruments, while the remaining 300 dealt in multiple product items including surgical goods. The third industry segment comprised about 2000 small vendors. There is a host of “stage firms” who supplied specialized vendor services for both the manufacturer and trader segments. These include individual firms specializing in filing and grinding, in forging and die making, in milling and box fitting, in polishing, in electroplating, and in heat treatment. Providers of ancillary services and inputs include suppliers of steel and machinery; travel agents, communication couriers, cargo handlers, legal and accounting services and repair workshops, and institutional support in the form of financial institutions, trade associations, and various government funded training and research centers.