(Yicai Global) July 21 -- After entrusting Acotec Scientific with some manufacturing work in China, Boston Scientific is now looking to build a plant in the country, a person familiar with the matter told Yicai Global.

The location of the factory has not yet been finalized, and Boston Scientific is still weighing the preferential policies offered by various regions, the source said. The US company did not disclose details of the progress of its first production plant in China to Yicai Global.

Boston Scientific and Acotec, a wholly foreign-owned enterprise based in Beijing, signed a framework agreement yesterday to collaborate on research and development, manufacturing, and commercialization over the next three years.

Acotec will provide product manufacturing services for Boston Scientific to reduce its production costs, with transaction amounts of up to USD5 million, USD8 million, and USD10 million for this year, next year, and 2025, respectively. It has not disclosed the specific product categories.

The transaction amount for Acotec to purchase Boston Scientific’s products for sale cannot exceed USD2 million a year from 2023 to 2025, per their agreement.

In some overseas markets, Boston Scientific has exclusive distribution rights for some select Acotec products, with transaction amounts capped at USD20 million, USD50 million, and USD110 million in 2023, 2024, and 2025, respectively.

The framework deal will be discussed and reviewed at the general meeting of shareholders of Massachusetts-based Boston Scientific next month.

Boston Scientific spent USD523 million to obtain up to 65 percent of Acotec shares and became the medical technology firm’s controlling shareholder in February. Acotec has plants in Beijing and Shenzhen, which can produce precision catheter raw materials with a gradually expanding output capacity.

Editor: Peter Thomas