After the declining gross profit | Does the implant become the next profitable outlet?

Medical Network May 24th As one of the upstream pillars of the dental industry, the mode of operation of denture processing plants has long been not labor-intensive. With the wide application of CAM/CAD technology, oral scanning, CBCT and other digital devices, the production of dentures The time has been greatly shortened, and denture processing has become a technology and capital-intensive industry, and will further develop in the direction of refinement and specialization.

The denture processing industry in China is mainly concentrated in the Pearl River Delta region centered in Shenzhen and the Yangtze River Delta region centered in Shanghai, forming a pattern of large-scale processing plants + many small and medium-sized processing plants. The former is modern dental, and the other is , Bai Rui, Kang Taijian, Ken Teng, MGM, etc., and the world's denture processing business has 60% -70% in China. In Shenzhen alone, there are about 100 companies engaged in denture processing.

In recent years, the denture industry has grown in demand for dental aesthetics, increased oral health awareness, increased disposable income, population growth and population aging and continues to grow, and is expected to continue this trend.

With the massive involvement of capital, the competition in the domestic denture industry has intensified, and many companies have begun to enter the adjustment period. At present, the main problems of the denture industry are as follows:

1. The cost of denture processing companies has grown rapidly, such as factory rents, labor costs, equipment costs, and profits;

2. The denture technicians are mostly trained by the master with the apprenticeship mode, lack of formal training, low quality, and out of touch with the clinic;

3, The overall operation process has changed, digital technology has made denture processing production more efficient, and technology input has increased;

4. There is a lack of supervision and self-discipline in the industry, and there are serious vicious price competitions among enterprises. Occupation of technicians occurs from time to time.

5. The relocation of the industry to low-cost regions. As the cost rises, profits have decreased, leading to the outflow of enterprises and the outflow of technical teams. For example, China has begun to shift to Southeast Asia.

As a whole, the industrialization and scale of denture processing have greatly promoted the development of the dental industry, making the denture processing quality average, and at the same time more standardized and standardized. For this reason, the arterial network has combed the denture (commonly known as Denture) Some current status of the industry, in order to seize the possible trend of the future development of denture processing plant.

Tracing the origins, the marketization of domestic denture processing began in southern China in the early 1990s. Currently, the number of overtones exceeds 4,000. In the coastal area, denture processing companies introduced technicians from Hong Kong, China, Taiwan, and overseas in the early stages, and their technical proficiency was relatively low. High, some of the earlier established companies, relatively strong technical force, market share, high market prices, high brand awareness, continuous mergers with some small enterprises, strong denture processing plants established subsidiaries in different places. In the direction of group development, the domestic denture processing factories are mainly concentrated in East China and South China.

Initially, the processing of dentures was linked to the treatment of traditional dentists. Dental fillings and dentures, individual dentists or small dental clinics were able to process dentures on their own. With the advent of chain clinics in China and the market division of labor, independent individuals Denture processing plants are growing.

Because the denture industry still lacks a perfect supervision and management system, the low-cost vicious competition among the industry is relatively common, and even there is no business operation. There are a few denture processing plants with poor health and quality standards. These so-called 'technicians' have no or only a few specialties. Knowledge and professional skills, do not understand the production process and quality management, directly bring about the vicious competition in the oral clinical remediation market, so it is the focus of regulatory authorities in various regions.

With the increasing demand for denture processing and the penetration of digital equipment in the industry, the concentration of denture processing industry continues to increase. Many small and medium-sized processing plants, due to lack of timely technical upgrading, have resulted in high cost production costs, low efficiency, and being eliminated. .

Nowadays, in the large-scale prosthodontics factory, dozens of designers and dozens of CAD equipments can complete the work of hundreds of skilled technicians in the past, and the porcelain-tooth denture has become the mainstream product in the current denture processing industry. The overall production level and skills have been continuously improved, and the processing cost is relatively low. It has been recognized by the foreign oral industry and the products are exported overseas.

Of course, large denture processing companies can not avoid the loss of technical personnel and the possible problems in management, but also face the test of the market.

In terms of products produced, the domestic denture processing factory mainly processes the production of fixed dentures as the main part, and the active denture processing is supplemented. According to the 2017 Annual Report of Modern Dental, its product portfolio can be broadly divided into three product lines: fixed denture equipment ( Revenue accounted for 72.8%, sales accounted for 61.5%), accounting for the vast majority of revenue, such as crowns and bridges; activity denture equipment (accounting for 19.3%, sales accounted for 22.3%), such as active dentures; other equipment ( Revenues accounted for 7.9% and sales accounted for 16.2% of sales, such as orthodontics equipment, sports protective gums and moth-proofing devices, raw materials, dental equipment and provision of educational activities and seminar services. Gross profit margin was approximately 48.7%, 48.1%, respectively. And 49.8%.

In general, there are only denture processing plants that specialize in fixed dentures, and there are almost no denture processing factories that only process active dentures. From the perspective of denture materials, they include ceramics, metals, and porcelain, etc. 3D printing.

From the perspective of technical difficulty, the difficulty of fixed denture is slightly higher than that of active denture, so it is reflected in the fact that the fixed denture is higher than the active denture in the gross profit. The subdivided from the fixed denture, the highest gross profit of the porcelain porcelain crown, the metal porcelain Second, while the crown of pure precious metals has the lowest gross profit. But overall, the minimum gross profit can reach 35% or more.

Judging from the scale, the amount of porcelain teeth in the month can reach 1-3 million or more can be categorized as large-scale processing plants, the amount of porcelain teeth in medium-sized processing can be 4,000-10,000, and the month of porcelain processing in small-scale processing institutes The quantity is within 1000-4000 pieces.

At present, a large number of ordinary small denture processing factories with low fees occupy the majority of market share. The competition is extremely fierce. It is mainly for high-grade clinic services or high-grade large-scale prosthetic factories that specialize in processing foreign prosthetic parts. Although the denture processing is more sophisticated, Fees are relatively high.

Private denture processing plants account for the majority, while the technician rooms in public hospitals are now mostly shrinking. Some have been withdrawn.

At present, only the denture processing factory in the five major high-level dental care systems in China and some other professional dental hospital denture processing plants in the region have maintained a certain scale of development.

The United States is the main sales destination, and the industry gradually moves to low-cost regions.

At present, North America and Europe are the major sales destinations for domestic and foreign denture processing companies, especially the United States. The United States, due to high labor costs, was initially processed mainly by Mexican workers with relatively low wages, but the processing costs are still high and gradually shrink. , Customers began to flow to cheaper foreign rivals. However, the highest-end denture processing is due to higher profit margins, and some are still held in the United States.

Domestic denture products mainly have the following sales methods in the United States:

1. Acquired the United States local mechanics, materials companies, they have a large number of orders, use the existing sources of these institutions to sell;

2, In cooperation with local distributors, the dependence on US distributors is high;

3, Cooperation with the largest dental clinic in the United States, chain operations, direct access to customers;

4. Obtain orders from all states in the United States. Since the dentures of public hospitals in the United States are uniformly purchased by the state government and then distributed to various hospitals, the procurement volume is often larger.

According to a 2017 business survey conducted by the National Association of Dental Laboratories (NADL), 63% of the surveyed workers can provide a variety of services (usually they can have the ability to make crowns at the same time, bridges). , Porcelain teeth and implants, etc.

The remaining 37% of the dental laboratories provide only one service. The size of these laboratories is generally small, and they often provide only dentures or crowns.

According to data from Bloomberg, the number of skilled workers in the United States in 2008 was still 12,250. In 2016, there were only 7,200 left. The current number is about 6,000. According to NADL's data, up to 40% of dental restorations in the United States come from overseas, not only at a low price. , And the quality of restorations is not worse than in the United States. Data show that the spread can reach up to 10 times.

As a result, the U.S. labor market has gradually shifted to regions where labor processing is relatively cheap, such as China, Vietnam, the Philippines, Thailand, and Malaysia. Similarly, in China, processing plants in Shenzhen and other regions have begun to migrate to neighboring Dongguan and Zhuhai.

The North American denture market has grown due to a number of factors. In addition to the labor costs mentioned above, American doctors are more concerned with dental function, quality is lower than European and Japanese market demands, and population aging directly affects the demand for denture equipment.

In addition, with the promulgation of the Bargaining Medicine Act in 2010, the coverage of medical insurance has been expanded. At the same time, the U.S. government has also allocated funds for oral health to help promote awareness.

According to the 2017 Annual Report of Modern Dental, the North American market achieved a revenue of approximately HK$678 million, an increase of approximately HK$410 million compared with 2016. This regional market accounted for approximately 31.5% of the Group's total revenue and 2016 accounted for approximately 16.9%.

The increase in revenue in the North American market was mainly due to the increase in the average selling price and sales volume of the MicroDental Group and overseas manufacturing products.

According to the Berry Dental Annual Report 2017, overseas sales mainly represented the income of the righteous tooth processing business, accounting for 82.87%, and the domestic sales mainly consisted of outpatient chain business income, accounting for 17.13%.

At present, large export-oriented denture factories have more than 80% overseas sales, such as Bai Rui and Jia Hong.

According to NADL data, many dental equipment companies in the United States are in the midst of closing due to overseas competition and consolidation of the industry. Although the low price of imported dental prostheses has made dental clinics taste a lot, it is relevant to other related issues. The industry, especially the dental laboratories, has been hit hard.

With the use of digital technology applications, clinics and denture processing plants around the world can communicate anytime, anywhere. Some American denture companies have also begun to focus on differentiated products, such as personalized customized repair services, dental technicians through training and Re-education enhances one's professionalism, learns more about clinical dental knowledge and information, and material science. It becomes an irreplaceable partner for dental clinics. It emphasizes the service's soundness and price transparency, rather than repeatedly pushing down prices to resist competition. Give clinic dentists comprehensive solutions.

The level of technicians and management are uneven, the industry is ill

The above mentioned channel issues, then the production cost of the denture processing plant, mainly reflected in the technician. A denture, dental models sent from the foreign clinics, data, to the completion of production delivery to the doctor, the fastest one week to complete Which 3-4 days are made in the workshop.

In addition to self-built technician rooms, the current cooperation between oral medical institutions and technicians, the internationally more common model is to send out processing. Its advantages are: First, the introduction of market competition mechanism, physicians can provide according to technicians product quality Such as flexible choices. Second, changed the relationship between physicians and technicians, physicians can choose a good technician / mechanic to provide services.

Dentures are personalized and customized products, which are based on the fine customization of dental models provided by hospitals and dentists, especially the concept of aesthetic restoration. They require not only the use of dentures, but also aesthetics and comfort. In the production process, a large number of people are required to participate in the manual production. , Each shape, size, size, color, are not the same.

To ensure that the user wears comfort and can help the wearer complete the chewing function, from the complex model, wax type, car gold, coloring, high temperature firing, repair, glazing, grinding, polishing, etc., each program and tiny details Treatment depends on the craftsmanship and experience of the technician.

A series of prosthodontic treatments for patients in the clinic, although doctors' techniques and treatment programs play a leading role, they ultimately rely on the close cooperation of doctors and technicians to complete these 'false teeth' if the technicians are practical and aesthetic. On the production not up to standard, the doctor's design ideas and other early work are in vain. Oral clinical medicine and oral prosthesis processing and production need to combine and promote each other.

The status quo is that Chinese technicians are generally inferior to the level and quality of technicians of developed country technicians. There is also a lack of complete education systems and theoretical guidance in China. The level of professional education they receive is not high. Generally, they pass apprenticeships with 'masters'. The teaching method or higher vocational education, even through the technical guidance of dental materials manufacturers can only grow, so the overall level of technology is generally low, the training of technicians mainly rely on higher vocational education.

Of course, there are also some talents who have studied abroad and studied on their own, and who have achieved very good technical skills.

Then, what is the status of domestic technician training? Prof. Wang Xing, Honorary President of the Chinese Stomatological Association gave an answer when interviewed by “Tomorrow Today”: 'The training of domestic technicians, there are college classes, undergraduate classes, but the number is very good. Less, in addition to the training of vocational and technical education institutions and the model of the teacher’s apprenticeship. In the Ministry of Education's enrollment category, the technician’s specialty is the repair process, but there is no clear setting for the repair technician from the occupation category. We have been In the call.'

Because the oral industry still has some opaque consumption, the chaos in the clinic market provides a market space for low-cost, low-quality denture processing. It will inevitably lead to low-cost vicious competition at the expense of quality. And existing proxy The communication methods are inherently inadequate, and the quality of agents varies greatly. After moulding, many of them were processed according to the understanding of the factory, and some of them did not meet the expectations of the doctor or the patient, leading to rework.

Good repairs should be done by doctors and factories. Technicians should understand the requirements of doctors and patients for products, improve suggestions, etc., achieve personalized processing, reduce the rate of rework, reduce the pressure on agents, and achieve quality assurance. Good competition, thus promoting the development of the entire technician industry, oral industry.

In an interview with Today's Oral, Professor Yu Guangyan of the China Stomatological Association said: 'It is precisely because of the development of the denture processing industry that the clinical work patterns and procedures have changed, and the requirements for technicians and doctors are constantly changing. For technicians In terms of oral theory knowledge, it is crucial to master modern science and technology and new materials such as digital technology. At present, denture processing has gradually changed from previous handicrafts to include digital technology, engineering knowledge, etc. In the field of science and technology industry, technicians are required to pay more attention to continuing education and keeping up with the latest technology. At the same time, doctors must also constantly update their knowledge and technology to master the latest information and patterns in denture processing, so as to better patient service. '

In addition to the technician's own factors, the use of digital technology has changed the process and efficiency of denture production. It is a great advantage for technicians, doctors, and patients. For example, VR technology can provide a comprehensive view of denture production and measurement, and use digital standards to judge The rationality of the design structure is made possible. There are quantifiable improvements in the number of products, the delivery rate, the individual product value, and the rework rate.

In the past, the mainstream technology used for denture production was foundry. Many processes were needed in the middle, and the process was very fine. It may take more than 10 people to work together, including investment, embedding, casting, grinding, polishing, and porcelain decoration. The resulting model, wax, and resin are all waste products.

The problem caused by so many processes is that the systematic error of manual operation and equipment materials is inevitable, and the more error the more processes. After digital technology is applied, a lot of intermediate links are omitted, reducing human error, wax type, form, design The thickness of the connector, the size of the connector, the degree of occlusion, and the tightness of the adjacency can all be monitored by digital techniques and aids, and prompt errors can be given.

In addition, digital technology has also promoted the development and application of dental prosthetic materials, especially the application of zirconia-type all-ceramic materials. Among all materials, the biocompatibility and aesthetic effects of all-ceramic materials are the best. 2012 Year-2017 all-ceramic products continue to increase, the decline of metal porcelain products monthly.

Zhang Chunbao, chairman of the Committee of Oral Rehabilitation Technology of the Chinese Society of Stomatology, stated that: 'Before the application of CAD/CAM technology, the difficulty in the application of all-ceramic materials was mechanical properties, and the second was the problem of processing. Large, high technical requirements, success rate, low strength, so in the past the application of all-ceramic is very small. Now, with the advent of CAD/CAM digital processing, the popularity of zirconium oxide all-ceramic materials, fixed restoration in cities in economically developed areas In the body type, the application of all-ceramic restorations has exceeded half.

Finally, digital technology has also brought about many technical changes. For example, digital impression technology has been scanned from the model, the scanning of the impression has gradually developed into intraoral optical scanning, which greatly reduces the human error in the impression error and greatly improves the final result. The pass rate of wearing teeth.

Referring to a representative case, Glidewell Dental Laboratories, the largest dental prosthetic factory in the United States, released the Glidewell.ioTM digital solution in November 2017 to shorten the prescription and delivery time of restorations, including iTeroElement® mouth scanning, fastdesign .ioTM software, and finalstage.ioTM dental ceramic ovens.

In late February 2018, in collaboration with Structo, a provider of dental 3D printing solutions, the company will integrate the Structo Velox desktop 3D printer into the glidewell.ioTM In-Office solution.

The system works with Glidewell Dental Lab's proprietary digital database of recovery data. Doctors can choose to design and manufacture in the clinic. They can also digitally send patient data to the Glidewell factory. If the patient's condition changes during treatment, glidewell The flexibility of the .io solution can adapt to changes in the treatment plan without overturning the doctor.

With the addition of the Structo Velox, glidewell.ioTM solution, Glidewell will be able to offer a full range of solutions including intra-oral scanning, chairside polishing and chairside 3D printing solutions, as well as clinicians' in-house technician-level instrument manufacturing integration. The solution is to combine most of the processes into one step. The technician can complete the entire manufacturing process before the computer. Not only the error is reduced, but also the labor intensity is reduced, and the overall precision of the denture is improved, and the range of the product is also larger.

Digitization is denture processing enterprise One of the inevitable development trends in the future. The application of digital +3D intraoral scanning technology has improved the product's production efficiency, reduced the demand for labor for some products, and further reduced the production cost.

Popularity of implants, the trend of future denture industry

In terms of large-scale morphology, small denture factories are the main form in both Europe and the United States and China. They are similar to clinics and are scattered. However, in recent years, as the number of chain brands has increased, large-scale denture factories have also begun to develop. Merger with some small mechanics.

The denture industry is characterized by the fact that the research and development of dentures are mainly responsible for the development of raw materials. The R&D part is more in the product segment, and R&D pressure is relatively small.

On the other hand, the patient's mouth health Consciousness has been improved to varying degrees. The demand for high-end dental services represented by oral care, tooth whitening, orthodontics, and dental implants has started to grow at a rapid rate. Full dental edentulous implants and complex implant cases are available for dental clinics. Dental Institute is an important growth area. The demand of consumers determines that many denture processing plants have started dental implants, and dental implants are still a pole for domestic companies due to their high-tech threshold. Potential market.

According to the annual report of Berry Dental in 2017, dental implants are the newly added denture processing business in 2017, which is mainly aimed at foreign markets. The dental implant business is the future direction of oral business development, and the proportion will increase in 2018.

According to the statistics, dental implants are actually about the same price in the United States as they are in the United States. They cost about 3,000 U.S. dollars in the United States and about 20,000 yuan in the country. However, the proportion of dental teeth in the United States is 100-120 particles/million people, and the figure in China is only 2/10,000 people. Differs greatly.

The aforementioned opportunities for future development, denture companies also face some difficulties, for example, with the increase in the number of large-scale chain clinics, these institutions will use their own bargaining power, hoping to get lower discounts and prices , In order to increase sales, they have to make profits to some foreign customers.

According to statistics, in the U.S. market, about 40% of dentists now work in joint practice or work in the so-called Dental Support Organization (DSO). Domestic capital has also begun to arrange clinics in large numbers, and more stores have also increased their bargaining power. ability.

In addition, the main profit of the denture industry is concentrated on the sales of products, and the price of dental clinics sold to the United States is also low relative to the final price, which ultimately results in the clinics and doctors actually having the highest profitability. Therefore, the denture processing enterprises The profit is relatively small.

At the same time, with the maturity of 3D printing technology, dentists will be able to produce their own denture products in clinics. It has been possible to cooperate with medical institutions and local denture processing centers in the local area to become space-free.

The denture factory equipped with digital devices also poses new challenges to the professional structure of technicians. Although manual operation capability requirements have been reduced, the level of knowledge of technicians is more demanding. Currently, the entire industry is particularly lacking in both oral medicine knowledge and computer knowledge. The high-level technicians who can control the operation of CNC equipment. The dental prosthesis factory not only processes the dentists, provides products, but also transforms into a provider of dental treatment solutions.

It must be mentioned that many dental prostheses also lay down the downstream clinics in addition to the upstream denture business.

According to the 2017 annual report of Berry Dental, the proportion of dental medical service revenue increased significantly during the reporting period, mainly due to the company's aggressive expansion of dental clinic chain business in 2017. From 2016 an oral chain clinic, an increase of 10 dental clinics in 2017 And an oral cavity hospital Among them, two dental outpatient clinics were newly established by the company itself and eight were recovered by mergers and acquisitions. As a result, the proportion of revenue increased rapidly, and the cost also increased significantly. Whether it can form a good synergy effect remains to be seen.

Remarks: The data involved in this article are based on publicly available data and corporate annual reports.

References:

Dental Today: A group that should not be overlooked in the dental industry | Interview today

An Interview Today? Professor Wang Xing and Professor Yu Guangyan talk about the development of dental technician industry

The rise of dental services, what are the opportunities for the upstream industry? ─ ─ China Star Industry Insight Series