MEDICAL GEAR EXPORTERS PREP FOR EAST EUROPE

MEDICAL GEAR EXPORTERS PREP FOR EAST EUROPE

The Bush administration's plan to loosen controls on exports of sophisticated medical equipment is good news for companies like Baxter International Inc.

Among other products, the Deerfield, Ill.-based firm makes diagnostic devices for evaluating blood samples in the treatment of AIDS and other diseases. Such devices have been subject to export controls because of concern that the sophisticated computers they contain could be diverted for military purposes.That's likely to change, however, after a June meeting of the 17-nation Coordinating Committee for Multilateral Export Controls, better known as Cocom. At the meeting, the group is expected to act on the Bush administration proposal, a Commerce Department spokeswoman said.

"I think it could have a dramatic impact on the industry in general," said Michael Deignan , Baxter's vice president for international trade management. "We've got huge opportunities."

Another U.S. company that's pleased about the expected liberalization of export controls is Milwaukee-based GE Medical Systems, which makes CAT scanners and other high-tech medical machines.

"The Eastern Bloc countries are big potential markets," said Phyllis J.

Piano, a spokeswoman for GE Medical Systems, which is a unit of Fairfield, Conn.-based General Electric Co.

Although shipments of sophisticated equipment to the Soviet Union have yet to be approved, Baxter last month hosted a delegation from the Soviet Ministry of Health at its Deerfield headquarters, according to a company spokesman.

Sales to the Soviet Union would still be subject to restrictions under the Bush administration's plan. Moreover, Mr. Deignan worries that the tensions in Lithuania could thwart other proposals to liberalize trade with the Soviet Union, such as making exports there eligible for financing by the U.S. Export- Import Bank.

Even if export controls on sales to the Soviet Union are relaxed, Mr. Deignan said, "in the longer term, establishing correct training, service and support networks there will be an even bigger challenge" for Western companies.

Although Baxter has been doing business in Eastern Europe for many years, its 1989 sales there represented a small portion of the company's worldwide revenue of almost $8 billion. Baxter operates manufacturing plants in 22 countries, and its health-care products and services are marketed in more than 100 nations.

Meanwhile, as Baxter seeks expanded markets abroad, the company also intends to broaden its global sourcing network.

It wants to develop business relationships overseas to help Baxter's divisions seek out alternative supply sources. That includes raw materials, components, finished products and medical technology.

The international trade management unit is trying first to increase exports of Baxter medical products to the Pacific Rim countries.

"Baxter's product catalogs include more than 120,000 items," said William A. Schmidt, corporate vice president responsible for hospital product systems as well as the international trade management unit. "As we grew and intensified our international marketing efforts, we recognized that a central organization could benefit our divisions overseas, especially to evaluate and coordinate sourcing opportunities."

The unit expects to be able to lower the cost of raw materials and products from Pacific Rim nations by finding better sources and working with them directly to coordinate purchases by Baxter's divisions.

Just as important, it seeks to enhance Baxter's product line and global research and development with advanced medical technologies.

"We often hear about global marketing, but what is becoming increasingly important is global sourcing of materials and technologies," Mr. Schmidt said.

Baxter has major manufacturing facilities in Malaysia and Singapore, and its operations in Japan constitute the company's largest overseas business in sales terms, with volume exceeding $200 million.