Philips to quadruple global ventilator production

Business news |
By Nick Flaherty

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Royal Philips is increasing ventilator production fourfold to address the global Coronavirus outbreak, and is calling for a lifting of tarrifs and export controls.

It says the most needed products are patient vital signs monitors and portable ventilators and medical consumables for ventilators. The company is ramping up the production of hospital ventilators and plans to double production within the next eight weeks and achieve a four-fold increase by the third quarter of 2020. It is mobilizing its global supplier network to step up support and production at final assembly sites in North America, Europe and Asia,as well as talking to contract manufacturers.

However the global network of certified materials and component suppliers is key to this increased production. In line with the recent call to action by the International Chamber of Commerce (ICC) and World Health Organization (WHO), Philips is calling on governments to allow enhanced access to critical materials and components by not imposing restrictions such as export controls and tariffs, and to provide help to accelerate logistics, as well as exemptions for critical suppliers from lockdown measures.

It is also challenging the national priorities of some goverments, saying it believes that critical medical equipment, such as hospital ventilators and patient monitors, should be made available across the world, prioritizing those communities and countries that need it the most, using a fair and ethical approach to allocate supply. THis should be based on data such as the COVID-19 risk-classification of a country or region, says the company.

“In line with Philips’ mission to improve people’s lives, we want to help as many healthcare providers as possible to deal with the growing numbers of critical COVID-19 patients,” said Frans van Houten, CEO of Royal Philips. “There is an unprecedented global demand for medical equipment to help diagnose and treat patients with COVID-19. We are working around the clock to double our hospital ventilator production within the next eight weeks and we are aiming for a four-fold increase by the third quarter.”

“We are actively engaging with the medical technology industry, governments, the World Health Organization and other health authorities to safeguard the production expansion of materials, components and final products, as well as their shipment between countries. We are calling on all these parties to help us in our endeavor to save lives by accelerating deliveries. We believe in fair allocation of scarce medical equipment to those that need it the most, while we are ramping up to supply other regions in the coming months,” he said.

The company is hiring additional manufacturing employees and shifting current employees to support increased demand immediately, as well as adding manufacturing lines and increasing the number of shifts to 24/7 shifts. It is also engaging with third party contract manufacturers to provide the additional capacity.

The impact of the outbreak on public life and industry in the most affected regions is resulting in a decreased demand for Philips’ consumer portfolio and is affecting its global supply chains. While this is expected to have a negative impact on the financial performance of Philips in the first half of 2020, the company says it has no visibility of the magnitude or duration.

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