20 MAY 2013
By Joseph A. Mann Jr.
An Indian entrepreneur with an international network of healthcare and diagnostic equipment companies has made a big bet on Miami-Dade County.
Mumbai-based Suresh Vazirani bought control IVAX Diagnostics in Miami in 2010 for about $15 million, changed the name to ERBA Diagnostics and expanded ERBA’s operations at its headquarters in Miami Lakes.
He later acquired two additional companies and is investing to make ERBA one of the key manufacturing and sales centers for his worldwide group of companies in India, Europe and the United States.“This is a great place for our business, an excellent geographical location, since we can ship our products to customers in the United States and to international markets,” said Vazirani, executive chairman of ERBA Diagnostics and the founder/owner of Mumbai-based Transasia Bio-Medicals Ltd., India’s largest in vitro diagnostics testing company. “Since most of our products are not perishable, we can ship by road, rail and ocean freight.”
“This will be one of our four international centers of excellence,” he added while on a recent visit to Miami Lakes. “The others are in India, Italy and the Czech Republic.”
The name ERBA comes from the Latin word herba, which means grass, herb, greenery and suggests evergreen, said Mala Vazirani, Suresh Vazirani’s wife and executive director at Transasia, who has worked closely with her husband since they married a few years after Transasia was founded.
The former IVAX Diagnostics assets that now form the core of ERBA Diagnostics include Miami-based Diamedix Corp., which makes instruments and reagents to detect autoimmune and infectious diseases; ImmunoVision, a leader in producing antibodies and antigens for autoimmune testing and test kits; and Delta Biologicals s.r.l., which makes automated testing devices and diagnostic products in Italy.
Last year, ERBA acquired another company, Drew Scientific, a Dallas manufacturer of testing equipment for diabetes and hematology, plus reagents and other products. Drew also has a unit in the United Kingdom and a subsidiary called JAS Diagnostics, which makes reagents used in chemistry analyzers.
ERBA today consists of Diamedix, ImmunoVision, Delta, Drew Scientific and JAS, and is linked to other manufacturing units in Vazirani’s companies in Europe and India. These include Vazirani’s first company, Transasia, ERBA Mannheim, the holding company for the group’s international operations, and ERBA subsidiaries in Turkey, Russia, France, Italy and the Czech Republic. The group has operations in about 40 countries and distributors for its equipment and other products in 90 countries, Suresh Vazirani said.
In Miami Lakes, ERBA makes about 100 products, according to Kevin Clark, ERBA’s CEO, while Diamedix makes about 48 products. In putting together ERBA, Vazirani kept key personnel from companies that were acquired. For example ERBA’s CEO came from ImmunoVision, which he founded.
Miami Lakes is also used as an assembly and testing center for ERBA blood and diabetes testing machines made in Dallas at the former Drew facility. The units are shipped unassembled from the Dallas manufacturing center to Miami Lakes, where they are assembled, quality tested, packed and shipped to customers in the U.S. and overseas.
Customers for ERBA’s extensive product line include physicians’ offices, small and large hospitals and clinics as well as research laboratories and commercial labs. About 50 percent of ERBA’s production is sold in the U.S., the other 50 percent to international markets.
ERBA’s strategy is to expand sales in the U.S. and overseas. “Before, we were limited, but now with Transasia, we have a great opportunity to reach global markets,” CEO Clark said. “We have greater reach and greater depth.
“Our edge is knowledge-based production and knowledge workers,” he said. “We make very specialized products that require a high degree of quality and purity.” The company is also expecting greater demand for its products in the U.S. as the Affordable Care Act is implemented, he noted.
The company did not provide figures on its recent investments, but Vazirani said that ERBA is adding new production capacity to its Miami Lakes facilities and will take over two vacant buildings next door to the present plant.
The company has about 100 employees, including 60 in Miami Lakes, 25 in Miami, plus sales and customer service staff.
ERBA will need about 25 additional employees as it expands over the next year, Vazirani said, including engineers, biologists, chemists and skilled electronic assembly workers.
ERBA and other companies in the group use their international manufacturing facilities not only to serve local markets, but also to reach overseas markets. For example, some diagnostic equipment made in India is shipped here and to other group companies in Europe.
“It’s not just a question of the cheapest labor, but access to markets” said Mala Vazirani, who has a background in business, corporate law and marketing. “Our mission is to produce diagnostic equipment for patient care at sustainable prices for the world.”
ERBA’s expansion “fits right into the strategy for life sciences and healthcare in Miami-Dade,” said Jaap Donath, senior vice present for research and strategic planning at the Beacon Council, a public-private agency that supports business development in Miami-Dade County. “People would be surprised to see how many companies in this field are already here,” he added. “With the completion of the tunnel at the Port of Miami, the port expansion and improved rail connections, ERBA will be able to take advantage of these components when they are in place, and our local colleges and universities are producing the kind of specialized talent ERBA requires.”
ERBA, currently in a quiet period, did not release any figures on financial results for 2013. But in November 2012, the company announced an operating loss of $298,000 for the nine months ending Sept. 30, 2012, compared to an operating loss of nearly $3.2 million for the same period in 2011. The net loss for the nine-month period in 2012, was $534,000, compared with a loss of over $3 million for the same period in the previous year.
The company is late in filing its annual report (10-K) for 2012 with the SEC, and told the NYSE MKT LLC that there were “unforeseen delays” related to the financial statements of the companies it acquired in 2012. ERBA recently submitted a “plan of compliance” to the exchange to avoid delisting of its stock, and said that the exchange had accepted the plan.
According to Thompson/First Call, there were no recent buy or sell ratings for ERBA’s stock, and the service listed no analysts covering the company.
“We’re so small that we don’t have any analysts who follow our stock,” CEO Clark said. “We hope to change that in the near future.”
Suresh Vazirani started on his path to business success because he saw widespread disease in India and wanted to help. Trained as an electrical engineer, Vazirani recognized a need for diagnostic testing in his country, as well as an opportunity, since this equipment and the chemicals they used were all imported. “I wanted to do something to help out, to help prevent and identify diseases,” he said.
In 1979, he started Transasia in Mumbai with an initial bankroll of about $5. “I used $2 to register the company and $3 to buy business cards and stationery.”
Vazirani told friends about his idea, obtained a loan and realized that he know nothing about the business. He went to the commercial offices of embassies and consulates in India, looked up the names of diagnostic companies in different countries and typed out about 200 letters asking if he could visit their companies and study their production processes.
Armed with replies from about 30 companies that wanted to do business in India, Vazirani spent six months traveling to companies in Europe, the U.S. and China “on a very tight budget. People thought I was crazy,” he said. “I received a loan to start my business and then went on a trip around the world.”
Vazirani returned to India, visited potential clients and offered technical support for imported diagnostic products. Four customers had hematology machines in Mumbai that didn’t work. Using his engineering skills, Vazirani repaired the machines and won their loyalty.
“I saw that after-sales support is key in this business … and we focus on that,” he said.
The Indian entrepreneur then began producing reagents and other chemicals used for diagnostic testing on a small scale in India, and Transasia began making economical testing equipment in Mumbai in 1991. “I prayed a lot,” he said.
With his focus on local production and technical support, Transasia grew quickly in the huge Indian domestic market, and Vazirani in 1995 set up a manufacturing facility in Germany – ERBA Mannheim — to launch an international expansion.
“Our business is based on technology,” Vazirani said. “And it’s best to have a world base for technology and worldwide markets to sell our products.”
Today, Transasia has three manufacturing centers in India, operations in the U.S. and Europe and global sales that were about $200 million last year, Vazirani said. About $100 million in sales come from India.
“It has worked out well for us,” Vazirani said. “We are still a work in progress.”
ERBA Diagnostics Business: ERBA and its subsidiaries develop, manufacture and sell diagnostic test kits, automated medical testing equipment and a range of reagents and other chemical products used in medical research and commercial laboratories, hospitals and doctors’ offices. ERBA products are employed in tests and analyses related to autoimmune and infectious diseases, diabetes and blood chemistry.
Founded: ERBA was formed in 2010 when a German company, ERBA Diagnostics Mannheim GmbH, acquired a majority share of IVAX Diagnostics for about $15 million. An Indian entrepreneur, Suresh Vazirani, founded ERBA Mannheim and controls the company.
Headquarters: Miami Lakes with a unit (Diamedix) in Miami and other facilities outside Florida.
CEO: Kevin Clark
Executive chairman: Suresh Vazirani, founder of Mumbai-based Transasia Bio-Medicals Ltd., India’s largest in vitro diagnostics testing company.
Employees: about 100
Ownership: ERBA is publicly traded on the NYSE MKT LLC under the symbol ERB. ERBA Diagnostics Mannheim owns about 82 percent of ERBA Diagnostics.