cosmetic dentistry_ beauty & science International Edition

I feature _ interview 36 I cosmeticdentistry 1_2014 _Following previous investments in Brazil, Germany and Spain, Straumann recently an- nounced that it has bought convertible bonds worth US$30 million from MegaGen, one of the largestdentalimplantsolutionprovidersinSouth Korea. At the recent World Symposium of the International Team for Implantology in Geneva in Switzerland, on behalf of cosmetic dentistry, implants magazine Managing Editor Georg Isbaner had the opportunity to talk with Frank Hemm,amemberofStraumann’sexecutiveman- agement board, about the investment and how it will affect his company’s position in the Asia Pacific region. _cosmetic dentistry: According to analysts, SouthKoreanmanufacturersareexpectedtodom- inatethemarketfordentalimplantsinAsiainthe years to come. Is this projected development the main reason for your investment in MegaGen? Frank Hemm:SouthKoreaisoneofthelargest markets for implants in terms of volume. More than two million implants are placed every year and local manufacturers are looking to expand into other Asian markets with high potential. China is a good example, where the market is still comparatively small but under-penetrated and growing quickly. In these markets, the premium implant seg- ment,whereStraumannhasbeenandstillisvery active, is growing less dynamically than the medium- and low-price segments are. We see the same trend in other markets, like Brazil, where companies like Neodent sell higher vol- umes than premium providers do. Two years ago, we had to ask ourselves whether we could address the non-premium segment with our existing brand or whether we needed a second brand. We decided on the latter and purchased a 49 per cent stake in Neodent. As an established brandintheregion,MegaGengivesusafoothold in the Asian “value” (medium-price) segment. The convertible bond approach means that we have the option to gain a majority stake in 2016 with a managed low risk. Straumann has always provided premium dental implants backed by solid scientific evi- dence and service excellence. These key differen- tiators make it necessary to use a separate brand strategy to address customers who are willing to accept lower standards and who want to pay less for implants. The value segment is growing exponentially and developing a new brand from scratch would simply take too much time and too many resources, which is the reason we chose to invest in other established companies. _Bothcompanieshavesaidthattheywillcon- tinue to operate separately. Still, do you expect any synergies to arise from this partnership? It is important to keep both businesses completely separate to ensure that customers do not think that Straumann is MegaGen and vice versa. The only synergies we see are in supporting the value brand companies to enter selective markets, and in sharing back-office functions, like infrastructure, information tech- nology or accounting. Everything else is handled by each company independently. Straumann products are certainly produced in Straumann facilities and this will continue to be the case in the future. “The trend towards the medium-price range has accelerated” AninterviewwithStraumannexecutiveboardmemberFrankHemm about the company’s recent investment in MegaGen CDE0114_36-37_Hemm 11.06.14 14:08 Seite 1