Straumann puts the bite back into life

Company headquarters in Basel. Straumann

Teeth are taken for granted by many people but if you lose one or more, there can be a loss of self-confidence that is hard to regain.

But the Straumann company of Basel manufactures dental implants that enable people to put the smiles back on their faces.

The firm makes sophisticated products that last longer than conventional dentures or bridges.

“Conventional tooth replacements can sometimes last only six to eight years, whereas studies of implant restorations show that they can last and look good for at least 12 years and go on working perfectly well for 20 years and longer,” Straumann’s chief executive Gilbert Achermann told swissinfo.

Astute investors have not been slow to catch on to the potential of dental implants, with Straumann’s share price having risen by more than 25 per cent this year alone.

Special surface

The dental implant is like a screw with a special surface. It goes into a hole that dentists drill into the jawbone and anchor there.

The trick is that the bone likes the material which has been put there.

“Dental implants are made out of grade four titanium, which is medical-grade titanium, and they have a special surface that bone cells just love to latch on to,” explained Mark Hill, the company’s head of communication.

The bone grows onto the surface of the implant giving it the necessary stability to deal with the enormous pressure put on it when a person chews.

“The implant itself has to be absolutely precise. Because the part that goes on to the implant, called the abutment, which supports the tooth replacement – the crown – all has to fit intricately. So we’re talking about nanometres,” Hill said.

It’s tempting to ask why such technology has not taken off before and the answer is fairly simple. There are not enough dentists in many countries who can master it.

Conservative dentists

“Dentists tend to be fairly conservative and it needs some time for them to take up new technologies,” said CEO Achermann.

He added that the situation was rapidly improving with the dental world aware of the advantages of implants for tooth replacement.

One of Straumann’s key marketing tools is providing training and education for surgeons, prosthetics specialists and dental technicians so that patients have the best treatment outcome.

The company has been growing at a rate of 20 per cent and more in the past few years and has had to change itself to adapt.

“The market overall has seen a growth rate of around 15 per cent. Everybody believes that we will continue to see growth at around that [per year] for the foreseeable future because the penetration levels and the advantages of the treatment form for tooth replacement are so obvious,” Achermann said.

Watchmaking heartland

Straumann has its main production facility in the heartland of watchmaking at Villeret in the Jura mountains. In fact, the founder of the company, Reinhard Straumann, invented Nivarox and Nivaflex – two special alloys for watch springs – that are still used today.

It also produces implants at a site in Massachusetts , opened this year, to conquer the North American market.

“The US is clearly the biggest single market in our field, as for most medical devices or pharmaceutical companies, and the proportion of the contribution to our business overall from Straumann’s perspective is not yet at what it ought to be,” Achermann said.

“Our aim is to generate more than a third of our overall sales in the North American market over the next three years.”

The company has also just opened a subsidiary in Australia, where dental implants have been placed in about only one of every 1,000 Australians, putting the penetration rate well below that of most European and North American countries. The potential is obvious.

Growth strategy

In terms of its growth strategy, Straumann does not look to buy market share through acquisitions.

“We believe that our product offering and our service delivery are at the point where we can grow organically,” said Achermann.

Asked whether he fears a bigger fish might come to use its teeth to acquire Straumann, Achermann said such a situation could never be prevented.

“The fact of the matter is that it would be quite expensive given the valuation that you look at.

“And also in terms of our shareholder structure, I think there are quite some hurdles to overcome if anyone were to be interested,” he added.

swissinfo, Robert Brookes in Basel

Key facts

Straumann first-half figures for 2005

Net profit: SFr68.1 million ($54.39 million) (+25 per cent over comparable period last year)
Operating profit: SFr80.4 million (+20 per cent)
Sales: SFr256 million (+18 per cent)
Earnings per share: SFr4.37 (+25 per cent)

In brief

Straumann is the world number two in the dental implant market behind Nobel Biocare.

On Thursday Nobel Biocare announced that its net profit for the first six months was €87.9 million (SFr136.4 million), up 128 per cent over the 2004 figure.

Nobel Biocare is due to join the Swiss Market Index of blue chips in October.