The next wave of AVF manufacturing in China is not centered around the needles themselves. The first nine articles dissected the technology, clinical application, manufacturing, procurement, and home dialysis of AVF needles. This final article returns to the industry landscape - the position of Chinese AVF needles in the global market, which is different from Hypodermic (Yangzhou cluster's price), IO (Teleflex's monopoly), and Menghini (niche customization): AVF needles are a component of China's "dialysis consumables package" cluster. Selling the needles individually is not viable; only when packaged can they have a say in the market.

The Three-Tiered Production System of Domestic AVF

The first tier: Weigao, Baihe Medical - They have their own dialyzers (Weigao's domestic dialyzers account for ~25% of the domestic market, and Baihe also has a large capacity for hollow fibers) + tubing + AVF needles + puncture kits. They can offer a complete package for GPO. The AVF needles are "part of the package," and the unit price can be negotiated, but the quantity is stable. The annual volume of Weigao's AVF needles is estimated to be 30-50 million units, and Baihe is similar.

The second tier: OEM factories like Manners - They do not produce dialyzers but specialize in AVF needles + puncture kits + accessories. They collaborate with European and American brand manufacturers (Terumo/JMS/Nipro's secondary lines) for OEM. The main products are 17G standard products + side-hole customization + 5-axis laser slotting, with an annual volume of 5-20 million units. The unit price is 20-40% higher than that of the first tier (export premium).

The third tier: Several small factories in Yangzhou and Changzhou - Tube pulling + sharpening + EO, 17G bare needles + blue wings, $0.30–0.45 FOB, they assemble individual orders from Southeast Asia/Middle East/Africa, with a gross profit margin of less than 12%.

The Moat of the "Dialysis Package" Cluster

The procurement logic for the dialysis center is as follows: "dialyzer (accounting for 55–65% of the package cost) + tubing (20–25%) + AVF needle (3–5%) + puncture kit/heparin cap/other (10–15%)". Currently, only Weigao and Baihe can provide the complete set of "dialyzer + tubing + needle," and there are also two other second-tier suppliers (including Penilon from Shandong and Langsheng from Jiangsu). This means:

The Chinese factory that solely produces AVF needles is classified as a "second-tier OEM." With an annual production of 20 million units at $0.6 each, the revenue is approximately $12 million, which is not sufficient to sustain long-term operations.

For those capable of manufacturing dialyzers, the AVF needles are sold as part of a package deal. Even if the needles themselves do not generate profit, the gross profit margin can reach 35-42%.

In the next five years, new dialysis centers in Southeast Asia, the Middle East, and Latin America (entering the market by Fisons and DaVita) will require "full package delivery + local warehouse + clinical training." Factories that solely sell needles cannot handle this, while those that provide the package deal can meet the demand.

Two Paths for the Second-Tier OEMs

Upward: Hug the thighs of the dialysis equipment factory. As a "supplier of AVF components for the package" - if Manners and other factories like Weigao/Baoli/Penilon engage in "cooperation within the package," it is more reliable than them going alone to bid for the provincial contract.

Downward (geographical): Cut HHD (mentioned in the previous article) + Southeast Asian private dialysis centers + Middle East high-end private ones. These three areas have a higher tolerance for the "17G + side hole + ball head + safety sleeve" and have small single-package quantities, which are not suitable for the giant pace of Weigao/Baoli. They are exactly the dishes for the second tier.

🇨🇳 Judgement on domestic AVF manufacturing: The 17G standard product market has been booming for 10 years. The next wave will not be about "making the needle thinner" or "reducing the unit price by another 2 cents," but rather about "whether it can be included in the package" - being included as a component in the packaging of Weigao/Bailei, or cutting HHD + the "small package high premium" market in Southeast Asia. The third tier of single-sale 17G bare needle + Blue Wing will be squeezed by both package manufacturers and overseas brand partners in the next 3 years.