Cascade Surges Into New Market

June 6, 2005
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CASCADE — For the past few years Cascade Engineering had been on the lookout for an advanced design and manufacturing partner to expand its operations.

The company found what it was looking for in Surge Medical Inc. of Holland

So the two companies joined forces to develop and distribute cardiovascular medical devices and accessories through a new company called Surge Medical Solutions LLC.

The proprietary medical device products they produce will serve heart surgeons throughout the country and will only be distributed through Surge Medical Solutions. The newly formed company also is seeking exclusive distribution rights to other medical device products.

“We’re also going to be doing some medical accessories that don’t necessarily have to do with cardiovascular surgery,” said Kathy Bolhous, vice president of the Industrial Solutions Group at Cascade Engineering.

For example, the new company is already marketing a patient transport pad that’s an alternative to a stretcher. The roll-up pad is highly compactable and the homeland security market is being targeted for the product, she said.

Cascade Chairman and CEO Fred Keller said the company has always looked for emerging opportunities to grow its business into markets that expand its manufacturing initiatives and “push the organization to develop creative solutions.”

Cascade, a leader in engineered plastics systems and components, initiated a health-care market diversification strategy about 18 months ago to look for growth opportunities, Bolhous noted. Cascade didn’t initially go into it looking for a medical device company. The company was basically fishing for ideas that could help leverage its existing businesses, she said.

“We looked at everything from compounding — which would leverage our novel polymer group — to looking at anything to do with plastic.”

The company decided on the medical devices market, and that decision was somewhat influenced by the growing health-care and research hub on Michigan Street Hill, Bolhous acknowledged.

“We had been working with Matt Dugener at the West Michigan Science & Technology Initiative,” she recalled. “He had introduced us to quite a few of the companies in the area and made us aware of all the capability that we’re building in the community.”

Just the fact that health care is a booming business played into that decision as well, said John Kowalski, Cascade’s senior marketing and communications manager. Research shows the health-care market has grown 2.5 times faster than the nation’s Gross Domestic Product and faster than most other markets.

Cascade didn’t set out to find a West Michigan company to fit the bill.

“We looked at all of the country, and then we ended up partnering with somebody in our own backyard. It was just nice that it worked out that way,” Bolhous remarked.

About 10 people are currently involved in the Surge Medical Solutions business day to day. Kowalski pointed out that as part of the deal, Surge Medical Solutions has access to a broad network of resources within Cascade Engineering, such as marketing, engineering, human resources and support services.

Ron DeVries, president of the new Surge Medical Solutions, co-founded Surge Medical Inc. in 2000 with Steven R. Gundry, M.D., who is considered one of the nation’s leading cardiothoracic surgeons.

The parent company has a number of proprietary products on the market at present that are not cardiovascular products at all, DeVries said.

“Because they were Class 1 devices in regards to the FDA, we were able to get them on the market a lot quicker and start generating a revenue stream as a result of those products. As we look in our bullpen of other new products coming down the road, I’d say 90 percent of them will be cardiovascular related. If not cardiovascular, then a couple of other surgical specialties.”

The all-plastic products are contract manufactured at this time, he added, and work will continue to be outsourced for a while.

“A lot of that takes a clean room environment so that is going to be something we’re going to be looking at maybe over the next 12 to 18 months — bringing in some of that manufacturing to our Cascade Engineering campus,” Kowalski explained.

He said in the meantime, a lot of work has to be done on the front end on product engineering and the development side.

“The Surge people are bringing the distribution channel, the sales team and the knowledge of the marketplace,” Bolhous said, “and Cascade Engineering is bringing more of the back end — the knowledge in product development, engineering and manufacturing.”

She said Surge Medical Solutions will launch several new products this fall that will be directly related to heart surgery.    

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