(BRK.A), (BRK.B)
Berkshire Hathaway’s Lubrizol will benefit from the robust growth projected to come from the medical tubing market over the next five years.
Analysts at Research and Markets are projecting a compound annual growth rate (CAGR) of 8.0% from 2016 to reach a total market size of USD $5.85 Billion, by 2021.
In 2014, Lubrizol acquired Vesta Inc., a maker of catheters and tubing based on silicone and thermoplastics.
According to Research and Markets, the market is mainly driven by minimally invasive surgery.
Another major factor that is expected to bring momentum to this market are increasing aging population, especially in developing countries, and the rising awareness about healthcare and the government initiatives to improve the quality of the healthcare infrastructure.
Silicone and TPE & TPE are expected to register high CAGRs between 2016 and 2021, in terms of volume. Silicone and other specialty polymers are replacing PVC due to their sterilization capabilities and microwave property, which PVC cannot sustain.
North America accounted for the largest share of the global medical tubing market and is projected to continue dominating the market during the forecast period while Asia-Pacific is projected to witness the highest CAGR during the forecast period due to the improving lifestyles of the population in the region. North America accounted for the largest share in 2015 in the medical tubing market due to focused interest of its government to provide quality healthcare facilities.
Bulk disposable tubing application is projected to account for highest market share during the forecast period. Medical tubing is widely used in the bulk disposable and dialysis applications. Bulk disposable tubing is used in blood bags used for blood transfusion, intravenous infusion tubing, drug delivery disposables, respiratory disposables, products for dialysis, laboratory disposables, wound management disposables, nonwoven medical disposables, sterilization supplies, waste disposable supplies, and others, such as diagnostic disposables. These disposable tubings are used mainly in hospitals.
Medical tubing manufactured from polymers is preferred because of their favorable properties such as resistance to sterilization condition, flexibility, inertness to body tissues & fluids.
Significant investment and the time required for product development act as a major restraint in the medical tubing market. In order to develop new and innovative products, technologies, and manufacturing processes, the market players collaborate with each other. These collaborations are expected to overcome this restraint during the forecast period.
At the time of the Vesta acquisition, Lubrizol’s Deb Langer stated that “the addition of Vesta significantly enhances our life science offerings through the combination of strong polymer technology, applications know-how and world class component manufacturing.”
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.