Medtech Throws City of Halberstadt a Lifeline

The future looked bleak for Halberstadt in the federal state of Saxony-Anhalt – a city dependent on a dying industry. Then it became one of eastern Germany’s “model cities for reconstruction” and developed into a hub for medical technology.

May 2020

The fall of the Berlin Wall in 1989 was the first step toward the reunification of East and West Germany. For Saxony-Anhalt, the political turnaround led to a “dramatic economic slump,” says Thomas Rimpler, deputy mayor of the city of Halberstadt. Many local companies hemorrhaged staff or disappeared completely from the market – the job losses were huge. The Maschinenbau Halberstadt company, for example, which had around 2,000 employees at the time, has only 70 staff today.

But as early as 1990, there was a positive turning point when the Federal Government chose Halberstadt as one of six “model cities for reconstruction,” giving the local residents hope for the future. “The financing enabled us to rehabilitate our infrastructure relatively quickly,” says Rimpler. One investor built a new city center costing EUR 140 million – a 40,000m2 retail area was created and a new town hall. The city started developing industrial and commercial areas in order to attract investors. There are over 100ha currently available for potential investment. “And that plot is available immediately,” explains Rimpler. “Because the city is the owner, it accelerates the awarding process.” With an attractive purchase price of EUR 10 per square meter, there are plenty of good deals around.

Many medtech customers rely on chemical sterilization for their products such as disposable medical instruments which must be supplied to hospitals and surgeries in pristine condition. HA2 Medizintechnik in Halberstadt is one of the largest and most advanced gas sterilization companies in the state. Proximi­ty to HA2 is therefore a major benefit for manufacturers.  © Morsa Images

Growing medical technology hub

Since then, several companies have set up in Halberstadt, particularly from the medical technology sector. More than a third of Saxony-Anhalt’s 75 medtech companies are based in the city today. HA2 Medizintechnik is one of the largest and most advanced gas sterilization companies in the state – many of its customers rely on its chemical sterilization process for their products. “Proximity to HA2 is a huge benefit, especially for newly established companies,” explains Rimpler. More than 1,000 jobs have been created by several companies as a result.

The unique selling point of gas sterilization makes Halberstadt particularly interesting for medtech companies that manufacture disposable products. Their deliveries, for example to hospitals, are often very specialized. Individual parts are supplied on a case-by-case basis. This offers a clear advantage for other businesses based in the Halberstadt area, who can save time and money by having their products sterilized locally.

U.S. investment in Halberstadt

Nanostone Water came to Halberstadt in 2004. The spin-off of the Leibniz Institute for New Materials in Saarbrücken develops and produces ceramic filters with nano­technology, which are used for pollution-free drinking water, among other things. Eight years later, the U.S. venture capital investor True North Venture Partners entered the business and the company was able to expand its production facility at a cost of EUR 11 million in 2016 (the state supported the investment with EUR 2.75 million). “The outstanding development of ceramic membrane technology on site was an important prerequisite for our ongoing investments in Halberstadt,” explains Mark Schweizer, CEO of the U.S. parent company.

Saxony-Anhalt’s medtech cluster

The cluster is home to no less than 34 medtech member companies and research institutes – 11,000m2 sqm in Halberstadt have been earmarked for R&D projects.

“Medtech Saxony-Anhalt” cluster

In Rimpler’s view, the support and cooperation offered by the state’s economic development agency (IMG) is a big incentive for foreign investors, giving them the confidence to commit. There are also numerous possibilities for networking in the area – nearby Magdeburg is home to the “Medtech Saxony-Anhalt” cluster, for example. There are no less than 34 medtech companies and research institutes in the cluster that are developing new diagnostic and therapeutic methods. Potential investors in this field can choose from 11,000m2 in Halberstadt which have been earmarked for research and development projects.

Good transport connections

What makes Halberstadt stand out as a location is its proximity to important junctions. Magdeburg tends to attract companies with a research focus, while Wolfsburg and Leipzig are chosen as industrial locations for manufacturing companies and suppliers. The deputy mayor of Halberstadt is proud of the U-turn his city has made: “The companies are creating new jobs, and in the long term, the central location and proximity to the freeway and airports will stimulate Halberstadt’s development,” he says.

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