Sound growth
With a network of 21 hospitals and more than 2,600 beds, KPJ Healthcare is the leading private healthcare provider in Malaysia. The group offers a comprehensive range of medical services and has many renowned medical consultants in cardiology, orthopaedic, oncology, plastic and reconstructive surgery, and others. Inside Investor caught up with Datin Paduka Siti Sa’diah Sheikh Bakir, Managing Director of KPJ Healthcare Berhad, to share her insights on the health care sector in Malaysia and the groups future plans.
Q: What is KPJ Healthcare’s current position in the very competitive environment of private healthcare in Malaysia?
A: The industry is indeed very competitive in Malaysia. We do compare ourselves to other hospitals, and I think we are ahead of our competitors. With the number of licensed beds we have, I’m positive that we are ahead of others. We want to remain that way and we want to do this more aggressively. Adding to that, we are the only publicly listed health care provider, which provides disclosure and benchmarks that we can reach in the region. We have four new hospitals under construction currently, while work on another three is expected to start this year. We are also on the lookout for potential acquisitions as part of our expansion strategy. Furthermore we want to broaden our exposure to medical tourism in the future. We also want to sharpen our focus on the education segment as a second core business.
Q: How about the level of medical technologies in KPJ’s hospitals?
A: If you mean in comparisons to the private hospitals in Malaysia: I think we are, again, ahead. We are fully computerised, and eight of our hospitals are moving into outpatients electronic orders. As for other technologies, we would like to focus on investment into equipment.
Q: What is your prediction for the healthcare sector in Malaysia? Is there room for more providers, or do you expect a consolidation sooner or later?
A: There are two aspects. The private healthcare sector can never be driven by an individual hospital. It is always the group. The consolidation comes either through groups or mergers. In fact, KPJ openly asks standalone hospitals to join our group. We can provide the synergy and economies of scales. As for the bigger mergers and acquisitions scenario, I doubt that is forthcoming. There is room for expansion for both local and international players. In my opinion, liberalisation concepts like the World Trade Organisation and the ASEAN Free Trade Area will attract more players to come.Foreign players will look forward to have partners or collaborations. It is very seldom that they will come on their own, unless they come with the state-of-the-art technology and with their own practitioners and staffs. I can foresee the advancement of technology in this industry, but healthcare is something different. I still believe in the personal touch. I always assess my business in terms of potential obsolescence due to technology. We definitely have to move with technology, but when it comes to seeking care, personal touch is ultimately more important.
Q: What is your advice for foreign businesses interested in investing into the private healthcare sector in Malaysia?
A: They have to come with technology and they cannot come big, unless they want to relocate. If they want to be involved in the Asian market, they have to come with state-of-art technology. This being said, I would encourage relocation, because the cost to operate in Malaysia is cheaper. KPJ Healthcare encourages collaborations with interested parties which we find are beneficial for everyone. Additionally, I think Malaysia is a good place to get health care, in general. The government is also promoting the Malaysia My Second Home programme, and this is the avenue where we can attract more foreigners. The doctors should work together. The foreigners can take the strength of providers but expertise is always the priority.
Q: How many international patients are treated per year in the hospitals of your group, from which countries are they coming from? How many are from the Middle East?
A: We have about five per cent of them. Most of our international patients are from Indonesia. As for the Middle East, we have patients from Iran, Saudi Arabia, Bahrain, Qatar, Lebanon, Iraq, Yemen, the UAE, Kuwait, and Oman. The highest number is from Iran. I believe we can have more. A lot of our patients are returning patients and those who have heard recommendations through word of mouth.
Q: KPJ Healthcare is eyeing medical tourism and aiming to grow the revenue contribution of this sector to 25 per cent by 2020, and your major target is to attract patients from the Middle East. What are KPJ Healthcare’s plans in achieving this?
A: We are planning to have deals with travel agents and funding houses to promote medical tourism. Malaysia used to be in the top three destinations for medical tourism in 2009.Aggressive marketing is our approach and we are looking forward to work with the Malaysia External Trade Development Corporation (MATRADE) to promote our hospitals. For example, we participate in the International Trade Malaysia eventevery year. During this event, we showcase our facilities and services to the interested parties. We believe that we should have buyers after they see our services and we should invite them to see our hospitals and the facilities that we have here in Malaysia.
Q: What is your approach to public-private partnerships in healthcare?
A: Public-private should be encouraged. First of all, I think there are a lot of synergies and economies of scales, because I see many duplications and wastage in the sector. If we work together to coordinate things, this will improve. Public hospitals are the regulators and the main players will always be the private hospitals. Insurance is the main factor, which we should take into account, so that people can buy the services.
Q: How do you anticipate the further price development for private health care in Malaysia compared to other popular medical tourism destinations in the neighbourhood, such as Thailand?
A: KPJ Healthcare’s price-earnings ratio is the lowest when compared to other listed companies. There is room to grow, but I do not necessarily see that prices should increase. Prices should hold steady as long as we are performing at the right margin. To me, it is the volume game. The more you are servicing, the better it is. We currently have 20 hospitals, and we are building more. Five of our projects are part of the country’s Economic Transformation Programme. We have Jeta Gardens, the retirement village in Australia, and we are planning to bring the concept to Malaysia because we believe this concept will prove to be a significant growth catalyst as there is untapped market potential. We are also moving ahead with our medical school here by offering postgraduate courses – training the specialists. We have to be more creative and not at the loggerheads with our competitors. In general, service is the most important aspect of our business moving forward.
[caption id="attachment_2779" align="alignleft" width="240"] Datin Paduka Siti Sa’diah Sheikh Bakir, Managing Director of KPJ Healthcare Berhad[/caption] With a network of 21 hospitals and more than 2,600 beds, KPJ Healthcare is the leading private healthcare provider in Malaysia. The group offers a comprehensive range of medical services and has many renowned medical consultants in cardiology, orthopaedic, oncology, plastic and reconstructive surgery, and others. Inside Investor caught up with Datin Paduka Siti Sa’diah Sheikh Bakir, Managing Director of KPJ Healthcare Berhad, to share her insights on the health care sector in Malaysia and the groups future plans. Q: What is KPJ Healthcare’s...
With a network of 21 hospitals and more than 2,600 beds, KPJ Healthcare is the leading private healthcare provider in Malaysia. The group offers a comprehensive range of medical services and has many renowned medical consultants in cardiology, orthopaedic, oncology, plastic and reconstructive surgery, and others. Inside Investor caught up with Datin Paduka Siti Sa’diah Sheikh Bakir, Managing Director of KPJ Healthcare Berhad, to share her insights on the health care sector in Malaysia and the groups future plans.
Q: What is KPJ Healthcare’s current position in the very competitive environment of private healthcare in Malaysia?
A: The industry is indeed very competitive in Malaysia. We do compare ourselves to other hospitals, and I think we are ahead of our competitors. With the number of licensed beds we have, I’m positive that we are ahead of others. We want to remain that way and we want to do this more aggressively. Adding to that, we are the only publicly listed health care provider, which provides disclosure and benchmarks that we can reach in the region. We have four new hospitals under construction currently, while work on another three is expected to start this year. We are also on the lookout for potential acquisitions as part of our expansion strategy. Furthermore we want to broaden our exposure to medical tourism in the future. We also want to sharpen our focus on the education segment as a second core business.
Q: How about the level of medical technologies in KPJ’s hospitals?
A: If you mean in comparisons to the private hospitals in Malaysia: I think we are, again, ahead. We are fully computerised, and eight of our hospitals are moving into outpatients electronic orders. As for other technologies, we would like to focus on investment into equipment.
Q: What is your prediction for the healthcare sector in Malaysia? Is there room for more providers, or do you expect a consolidation sooner or later?
A: There are two aspects. The private healthcare sector can never be driven by an individual hospital. It is always the group. The consolidation comes either through groups or mergers. In fact, KPJ openly asks standalone hospitals to join our group. We can provide the synergy and economies of scales. As for the bigger mergers and acquisitions scenario, I doubt that is forthcoming. There is room for expansion for both local and international players. In my opinion, liberalisation concepts like the World Trade Organisation and the ASEAN Free Trade Area will attract more players to come.Foreign players will look forward to have partners or collaborations. It is very seldom that they will come on their own, unless they come with the state-of-the-art technology and with their own practitioners and staffs. I can foresee the advancement of technology in this industry, but healthcare is something different. I still believe in the personal touch. I always assess my business in terms of potential obsolescence due to technology. We definitely have to move with technology, but when it comes to seeking care, personal touch is ultimately more important.
Q: What is your advice for foreign businesses interested in investing into the private healthcare sector in Malaysia?
A: They have to come with technology and they cannot come big, unless they want to relocate. If they want to be involved in the Asian market, they have to come with state-of-art technology. This being said, I would encourage relocation, because the cost to operate in Malaysia is cheaper. KPJ Healthcare encourages collaborations with interested parties which we find are beneficial for everyone. Additionally, I think Malaysia is a good place to get health care, in general. The government is also promoting the Malaysia My Second Home programme, and this is the avenue where we can attract more foreigners. The doctors should work together. The foreigners can take the strength of providers but expertise is always the priority.
Q: How many international patients are treated per year in the hospitals of your group, from which countries are they coming from? How many are from the Middle East?
A: We have about five per cent of them. Most of our international patients are from Indonesia. As for the Middle East, we have patients from Iran, Saudi Arabia, Bahrain, Qatar, Lebanon, Iraq, Yemen, the UAE, Kuwait, and Oman. The highest number is from Iran. I believe we can have more. A lot of our patients are returning patients and those who have heard recommendations through word of mouth.
Q: KPJ Healthcare is eyeing medical tourism and aiming to grow the revenue contribution of this sector to 25 per cent by 2020, and your major target is to attract patients from the Middle East. What are KPJ Healthcare’s plans in achieving this?
A: We are planning to have deals with travel agents and funding houses to promote medical tourism. Malaysia used to be in the top three destinations for medical tourism in 2009.Aggressive marketing is our approach and we are looking forward to work with the Malaysia External Trade Development Corporation (MATRADE) to promote our hospitals. For example, we participate in the International Trade Malaysia eventevery year. During this event, we showcase our facilities and services to the interested parties. We believe that we should have buyers after they see our services and we should invite them to see our hospitals and the facilities that we have here in Malaysia.
Q: What is your approach to public-private partnerships in healthcare?
A: Public-private should be encouraged. First of all, I think there are a lot of synergies and economies of scales, because I see many duplications and wastage in the sector. If we work together to coordinate things, this will improve. Public hospitals are the regulators and the main players will always be the private hospitals. Insurance is the main factor, which we should take into account, so that people can buy the services.
Q: How do you anticipate the further price development for private health care in Malaysia compared to other popular medical tourism destinations in the neighbourhood, such as Thailand?
A: KPJ Healthcare’s price-earnings ratio is the lowest when compared to other listed companies. There is room to grow, but I do not necessarily see that prices should increase. Prices should hold steady as long as we are performing at the right margin. To me, it is the volume game. The more you are servicing, the better it is. We currently have 20 hospitals, and we are building more. Five of our projects are part of the country’s Economic Transformation Programme. We have Jeta Gardens, the retirement village in Australia, and we are planning to bring the concept to Malaysia because we believe this concept will prove to be a significant growth catalyst as there is untapped market potential. We are also moving ahead with our medical school here by offering postgraduate courses – training the specialists. We have to be more creative and not at the loggerheads with our competitors. In general, service is the most important aspect of our business moving forward.
