The Neusoft Group and Royal Philips Electronics have signed a memorandum of understanding to set up a manufacturing and R&D joint venture in China.
The joint venture, Philips-Neusoft Medical Systems, will focus on developing and manufacturing medical imaging systems for the Chinese and international markets.
Philips will hold 51% of the share capital of the new company while Neusoft Digital Medical, a subsidiary of the Neusoft Group, will hold 49%.
Once approval for the joint venture is granted by the Chinese government, the new company will begin developing and manufacturing computer tomography (CT) and x-ray equipment.
This will be followed by ultrasound and magnetic resonance imaging (MRI) equipment, as well as picture archiving and communication systems (PACS) – products that are used to store radiology images. Both parties will retain their own brands, sales forces and service networks.
The Chinese medical market, currently valued at $1.2 billion, is the world’s third largest, and is growing at approximately 10% per year, according to Philips. It is expected to overtake Japan in the next six to eight years, fuelled in part by a strong demand for economy- to mid-range products. This segment of the market is growing in China at approximately 15% per year.
The joint venture will target developing international markets in Asia, South America and Eastern Europe, where there is high demand for economy- to mid-range products.
It will have its headquarters in Shenyang, in northeastern China.