Minneapolis-based Medtronic Inc.'s recently announced joint venture with Hong Kong-based Shandong Weigao Group represents more than just another American company expanding its global footprint.

"All our products are made in the U.S.," notes Bert Kelly, senior manager, communications, at Medtronic's spinal facility in Memphis, TN. Rather than an American company moving to China to make products to be sold back to American consumers, he notes, Medtronic, via the $221 million venture, now will offer quality American-made spine and orthopedic treatments to new Chinese consumers.

Specifically, Medtronic is buying a 15 percent stake in a Shandong Weigao Group Medical Polymer Co. or 80.7 million shares. Medtronic will have a 51 percent interest in the joint venture and Weigao will have 49 percent. With annual revenues around $12.3 billion, the deal, Kelly explains, allows Medtronic access to Weigao's Asia market, specifically spinal-fusion surgery devices, while Weigao will offer its expertise in artificial hips and knees.

According to Chuck Grothaus, a Medtronic spokesman, the company has had some presence in China since 1989, but its China earnings represented only two to three percent of its total bottom line. That will now change.

With its huge population and growing workplace dangers, it is estimated that tens of thousands of Chinese suffer spinal-cord injuries annually, especially due to conditions in coal mines, construction work, and auto accidents. A Wall Street Journal report recently cited China as leading the world in the number of car crash victims. These facts speak to the need for medical interventions and devices such as Medtronic's specialized offerings, which promise to improve quality of life and quantity of business.

"There are a lot of synergies between the two countries," Grothaus adds. "Medtronic gets to expand into China, and Weigao has access to the $1 billion in research and development we do here in the U.S."

While Medtronic employs 39,000 worldwide, its main factories are in Los Angeles, Memphis, Santa Rosa, CA, Jacksonville, FL and Puerto Rico.

"We are the global leader in medical device technology," Grothaus notes. The company has also undertaken some R&D in pacemaker monitoring on the Chinese mainland, establishing Chinese-language programmers to allow Asian doctors to adjust individual pacemakers--a growing need in a country where it's estimated six million heart patients could require pacemakers annually.

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