[Infostock Daily=Reporter Yoon Seo-youn] "A foreign company? No. It's a Korean company."

Osstem Implant, No. 1 in Asia Pacific region and No. 4 dental implant company globally by sales, is a pure native company started in 1997 under the name of D&D System. In 2002, The company established a research institute and entered the implant market in earnest. It quickly dominated the domestic and overseas markets and changed his name to Osstem Implant in 2006.

Osstem Implant, which defeated foreign companies in the domestic market, later turned to China. Starting with exports of $ 10 million in 2007, the first year of the KOSDAQ listing, the company surpassed $ 100 million in 2018, following $ 30 million in 2012 and $ 50 million in 2015. Recently, it has grown rapidly into a 'total dental company'that sells equipment, materials, dental ITs, and interiors as well as implants.

Um Tae-kwan majored in medical engineering at Pusan National University Medical School and earned a master's degree in business administration (MBA). Since then, he became the head of Osstem Implant Research in 2001 and became president in 2017. At Osstem Implant, which recently moved to Magok Science Park in Seoul, Um set a grand goal to become global No. 1 in implant sales by 2024 and global No. 1 in dental sales by 2034.

In an interview with Infostock Daily, Um said, "We are improving profits and losses and seeing the results from this year, and we are trying to balance growth and profit and loss for next year following the end of the year," and continued, "expanding the size through M & A and developing a management system for a successful turnaround.".

Below is a question and answer between Choi Yang-oh, advisor to Hyundai Economic Research Institute, and Um Tae-kwan, president.

Q. The compnay recently moved into a new Magok corporate building. What does this move mean to you?

A. Originally, Magok Science Park was a research complex, so only research institutes could enter. We were not the first to come in, but we were able to apply for what Daewoo Shipbuilding & Marine Engineering returned during its crisis. I think Seoul gave our company a present.

 

Q. The building looks like two molars, Is there any special meaning?

A. Chairman Kyuok Choi is well-versed and interested in the exterior of the building. After the Busan office building, we selected the construction comapany who can build a ladmark building through the competitive bidding process.

 

Q. Your company was selected as the most trustworthy by dentists. Please introduce your company.

A. It is a Korean native company. There are people who misunderstand as foreign because of the company name. It is a pure Korean society and currently ranked No. 1 in Asia Pacific and No. 4 in the world in terms of sales. It has been the world's No. 1 seller since 2018. Although it specializes in implants, it is a total dental company that sells interiors such as equipment and materials needed by dentists, dental ITs, and dental model houses.

 

Q. What kind of system is the total solution?

A. Implant is made in Busan manufacturing plant. Magok makes everything from interiors used in dentistry to equipment and materials, and we currently supply 60% of all products that go into dentistry. In the long run, we plan to make it all supplied to the total. Everything can be solved when dentists meet Osstem.

 

Q. I heard that there are many research institutes in the new building. We also invest a lot in R&D.

A. The research center has many fields and areas. There are six registered laboratories and ten unregistered laboratories. The size of R&D compared to sales also maintains 6~7%, and the number of research personnel out of 1,800 employees in Korea reaches 450. There are about 4,000 employees worldwide.

 

Q. The word 'digital dentistry'is unfamiliar and noticeable.

A. The dental industry is shifting to digital rather later than other industries. Not all tasks can be digitized, but for example, in the case of difficult implant surgery, it takes more than a decade for doctors to finally become skilled. However, when it becomes digital, virtual surgery on the computer makes it easier to perform difficult surgery. Even first-time doctors can quickly become experts with the help of computers.

 

Q. CAD/CAM (CAD/CAM) and 3D printers are hot in the market for next-generation dental devices. How are you researching that field?

A. CAD/CAM is also a field of digital dentistry. It includes CT and scanners that upload patient data to the computer, simulation procedures on the computer, and the transfer of results to the patient. Among them, processing dental prosthetics was an area of technology in the past, but we are developing the entire lineup in milling, in other words, processing them into cams. Among them, it is important to pick up patient data through oral scanners, which have a strategic alliance with the world's No. 1 company. Also, we are developing something on our own, and it will come out next year. About 70% has already been completed, and the remaining 30% will continue until the end of the year and early next year. The CAD/CAM field is also expected to dominate in the near future.

 

Q. The company recorded its best performance in the second quarter. The figure is impressive in the COVID-19 situation.

A. There is a saying that 'the game is divided in the corner in the car race'. Osstem Implant has been lucky in the process of rapid growth, and in the crisis of COVID-19, it was lucky but also supported its skills. By the second quarter of this year, all the top three major companies grew 30% in sales, but we rose 1%. It made a gap of almost 30%.

 

Q. How was it possible?

A. Specifically, I used a customer-friendly strategy, namely dentist-friendly strategy. As the situation becomes difficult with COVID-19, what is needed right now is to secure cash. Most companies secure money through sales. In other words, they receive money from customers and receive money first when they give things. However, we borrowed most of the money from the bank and gave the customer financial advice. Both China and the U.S. are going through dental shutdowns and sales are "zero,"so we can't ask for money. Rather, they built trust by delaying the time of receiving money. Of course, we didn't have sales either, but as the COVID-19 situation improved, a friendly environment was created for us.

 

Q. Recently, it surprised the market by issuing 50 billion won of CB without interest.

A. We successfully (issued) Rather, investors seem to see our company in a similar way to ours. From the perspective of the CEO, last year was a bit bad, but this year's performance was good, but I think the stock price was undervalued. Investors seem to have the same idea when issuing CB. Now that it is undervalued, expectations are high that it will rise a lot if it invests.

 

Q. It is the No. 1 market in China. How did it enter the market and what are its future plans?

A. Domestic implants used to be 95% foreign and 5% domestic 20 years ago, but now it is the opposite. Domestic products account for 90%, and the absolute majority of them are Osstem implants. We entered China for the first time with the know-how to fight foreign countries in Korea and succeeded in expanding our business through localization strategies. The implant market should have three elements: tooth deficit population, economic size, and dentist. In China, the tooth deficit population and economic power are sufficient, but there is a shortage of dentists. Because implants have not been taught at dental schools around the world, only 15% of Chinese dentists are capable of implants. So we plan to increase this proportion by 50% in the future through clinical training. Doctors trained through us will later use Osstem implants. Also, we operate 400 salespeople directly in China. Investors point out that there are a lot of people, and we think salespeople are investments, not costs. It is the driving force that took the first place in China.

 

Q. Is there a reason to manage the salesperson directly?

A. Most of the medical device companies do dealer sales. Dealers are largely divided into two types: dealers who do implants and new dealers. Among them, it is difficult to sell more of our products as dealers who previously had implants are in charge of the world's No. 1 company. This is why we first ran dealer sales and then changed to direct management.

 

Q. What are the advantages of Osstem implants that can achieve future vision?

A. Although we have a good reputation in the dental industry, we have decided that it will not last long if the product is not supported, so we have been betting on quality. Determining quality is first research, so 7~8% of sales are spent on R&D investment. The Magok office building is 22,000 pyeong, 10,000 pyeong of which has 3,000 pyeong of laboratories.

 

Q. Investors might not like it.

A. So we are diversifying our business portfolio through the new building. 450 researchers do not only implant. There is a professional oral pharmaceutical company and correction. Teeth have braces and implants. It is also promoting business diversification such as dental interior. Also, we set a sales goal of 10 trillion won by 2034, which is difficult for our company alone. In the end, M & A of overseas companies is in mind, and management systems for successful turnarounds have been developed for several years. Through this, we are preparing an ambitious plan to establish an axis of global management.

 

Q. The goal of 2024 was to become the No. 1 implant industry and the No. 1 dental industry by 2034.

A. Currently, the No. 1 implant is Swiss Stromaner, which earns 1.1 trillion won from implant alone out of 1.7 trillion won in sales. And the total number one dentist earns about 8 trillion won. It has set a goal of becoming the No. 1 in the implant industry by recording 1.4 trillion won in sales in 2024, and has declared that it will become the No. 1 dentist with 10 trillion won in sales in 2034.

 

Q. Finally, please send your messages to the investors.

A. Osstem Implant is a company with a long-term vision. In the process, growth has been prioritized over profit and loss, which investors disliked. So since last year, we have improved that part to balance growth and profit and loss from this year. In addition, Osstem Implant, as it has been so far, will continue to be a predictable company for companies and investors who keep their promises.

Reporter Yoon Seo-youn yoonsy0528@naver.com