Economy

Make Brazil Breathe Again

Magnamed is one of the few Brazilian companies that produces lung ventilators which are crucial to saving the lives of patients with severe cases of Covid-19. It was founded 15 years ago by three engineers of Japanese descent who left their careers in medical equipment companies to start their own business.

This year, before the Carnival holidays in February when Brazil was blissfully unaware of what was to come in the following month, Magnamed had noticed an increase in demand for its products coming from abroad.

Daniel Izzo, co-founder of impact investing venture capital firm Vox Capital — one of the company’s partners — says that Magnamed co-founder Tatsuo Suzuki called him in February to say that they might need to raise money to meet the rising demand.

This was just the beginning of what turned out to be a veritable odyssey.

Once Covid-19 took hold in Brazil, the government decided to centralize the purchase of ventilators to reduce its dependence on China. On March 19, it sent a letter to Magnamed: the company was to cancel all of its contracted orders. All stock and production for the next six months would go straight to the Health Ministry.

At that point, a network of large domestic and multinational companies formed in support of the company to ensure the delivery of 6,500 ventilators to the public health system within the space of three months.

However, Magnamed only had a production capacity of between 200 and 250 ventilators per month. In other words, it would have to upscale logistics, production capacity, and working capital in a way the company’s founders had never imagined possible.