More job losses on cards at Sheffield manufacturer JRI Orthopaedics due to pandemic and downturn in China

JRI Orthopaedics could shed up to 19 jobs in production and customer service. The announcement comes after the loss of 11 posts in spring.

The Chapeltown firm was bought by Chinese company AK Medical in 2018 and was hoping for major expansion in the Far East.

WHAT HAS GONE WRONG FOR THE FIRM?

Managing director Jerry Agass said the firm had been hit by changes in the Chinese market and the slow return of elective surgery after the pandemic.

He was ‘extremely disappointed and sorry’ that JRI must now consider making further redundancies. But preserving the company and the job security of the majority of employees must be a priority, he said.

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“A lengthy national tendering process, which has been taking place in China for much of this year, has significantly reduced the number of companies that can provide orthopaedic implants to China’s national hospitals and this has driven down revenue and margins,” he added.

“AK Medical has been successful in retaining 20 per cent of the total Chinese hip and knee market. However, disruption within the Chinese supply chain, arising from the tendering process, has meant that AK Medical has accumulated a six-month supply of stock ready for distribution, leading to the current reduced sub-contract production demand for JRI.”

WHAT IS THE OUTLOOK FOR THE FIRM NOW?

All hydroxyapatite coated products will continue to be coated at JRI and production volumes and levels of elective surgery were expected to return in 2023, he added.

“However, the company is unable to bridge the gap and keep its production and customer service teams gainfully employed in the interim,” he said.

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The AK Medical Group is one of the world’s largest 3D-printed orthopaedic implant manufacturers. It bought JRI Orthopaedics for £16.7m in 2018 from charity Orthopaedic Research UK.

At the time it promised significant investment.

Founded in 1970 by orthopaedic surgeon Ronald Furlong, JRI was the first to produce hip implants with hydroxyapatite coating - a synthetic bone made to a secret recipe - enabling a ‘biological bond’ with the patient and the prospect of a hip for life.

In 2018, half of the £14.5m annual sales were in the UK. Spain and China accounted for another 20 per cent each, with implants also going to Norway, Germany and Australia.

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