4Ps in Real Estate in India

							      Healthcare & Medical
        Mission to INDIA
         5–10 Dec 2010

Patrick Kearins – Trade Commissioner, Mumbai
Chaitanya Patil – Industry Team Leader for South Asia, Bangalore
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Today’s Presenters

   Patrick Kearins   Chaitanya Patil
       Austrade‟s Health & Medical Team in India


Patrick Kearins                                                                  Imran Saeed – Lahore



                                      Nidhi Bhardwaj


                                                                               David Samuel – Colombo




                                                                               Adil Mohamed – Chennai




                                                                                Harsh Puri – New Delhi

Bhavin Kadakia                                    Sangeetha Krishnamoorthy




                                                                               Anuj Bhasin – New Delhi
                  Chaitanya Patil
           Industry Team Leader
                                    Vijay Subramanian


                                                                             Jitender Jassal – New Delhi
    India…snapshot
• 1.2 billion people
     – Approx 2% population growth
       (grows by the total population of Australia each year)
         • Urban Population - approx 300+ million
         • well travelled, aware, with discretionary income
     – 4th Largest Economy in terms of Purchasing Power Parity
         • favourable government regulations
         • GDP – USD 1.4 trillion (approx)


•    A market of contrasting facts ~ easy to be confused…..
     – BMWs & bullock-carts side by side
     – Best technology brains & healthcare professionals with almost half the
       people illiterate
     – Expertise in launching satellites while working to eradicate some basic
       diseases
                          Healthcare in India
Market Overview
  - Total Size: USD 56 billion, 5.5% of India‟s GDP
           - estimated to reach USD 75 billion by 2012 (USD 150 billion by 2017)
  -   0.7 million doctors ~ 1 doctor for 235 people
  -   1.1 million hospital beds ~ 1 bed for 1,100 people
  -   15,000 hospitals ~ 1 hospital for 70,000 people
  -   3,904 Nursing Colleges & 1.4 million nurses
  -   303 Medical Colleges ~ 25,000 new medical graduates each year
  -   70% of hospitals (tertiary care) are managed by the private sector
Growth rate ~ 12% per annum
  - Low per capita healthcare spend (around USD 49 currently)
  -   Need to add 100,000 beds per annum over the next 30 years
  -   Healthcare delivery and pharmaceuticals ~ 75% of the total market
  -   Imports of products / services - about 20%
  -   Willing to spend for Healthcare services
         • Middle class family of four spends approx USD 255 / year on healthcare
“With a population of over a billion, the coordination and
strategic choices concerning expenditures on healthcare
          infrastructures are of vital importance”

                       Indian Healthcare sector - Growth estimate

                 400

                                                                    300
                 300
USD (Billions)




                 200
                                                        150

                 100                  75
                       35

                  0
                       2007           2012              2017        2022

                                        Healthcare spending
                     Healthcare in India…contd

Increasing demand……the key drivers
•   Increase in life expectancy (approx 65+ years) and an ageing population (approx 5.6%)
•   Growing Middle Class and Patient Preferences ~ rising income levels and varied illness
    profiles
•   Unmet demand for healthcare facilities & rapidly changing demographics

     Low cost of medical care + High success rate + Growing credibility
     = a strong value proposition
     (approx 20-30% of the costs in the USA)

•   Shift from infectious diseases to lifestyle-related diseases
          cardiac, oncology, stress, digestive issues, asthma, and diabetes
          = 36 % of in-patient revenues
•   “Medical Tourism” - attracting customers from outside India (Healthcare Hub)
          USD 333 million today; to touch USD 2.2 billion by 2015
•   Privatization of insurance pushing growth
•   Strong focus on Tele-medicine and e-Healthcare systems
              Healthcare Pie in India - 2012

–   Infrastructure - 14%
–   Medical Equipment - 5%
–   Bed Revenues - 36%
–   Pharmaceuticals - 16%
–   Health Insurance - 5%
–   Health Outsourcing - 9%
–   Medical Value Travel - 2%
–   Independent Pathology Laboratories - 3%
–   Clinical Trials - 1%
–   Training and Education - 3%
–   Medical Textiles - 1%
–   Medical Consumables - 5%
     (Source: The Business World, Ernst & Young Survey)
  Healthcare Infrastructure
Rural                   Urban
          Healthcare Infrastructure
Primary Care: Rural             Urban
         Healthcare Infrastructure
Tertiary: Semi-Urban       Tertiary: Urban
         Healthcare Infrastructure
Rural / Semi-Urban         Tertiary: Urban
                   Healthcare Infrastructure
•   Inadequate ~ much below WHO „standard‟ of 3 beds / 1,000 people
     – Need 100,000 beds to be added per annum, over the next 30 years
     – Two-thirds to be in rural / semi-urban areas for balanced development
•   Growing need for improved healthcare infrastructure in Boom Towns (Tier II) &
    Niche Cities (Tier III) in India
•   Spend in India (construction &maintenance of facilities for medical research,
    drug production &primary health care services) estimated to grow at 5.8% pa
      Government is envisaged to spend USD 46 billion over the next five years,
        to bridge the urban-rural divide
      States of Maharashtra, Rajasthan, West Bengal, Kerala, Tamil Nadu, Uttar
        Pradesh - to represent nearly 50% of the expenditure up to 2013
•   Private equity firms / VCs / Angel investors – keen on promoting the segment
•   Potential in semi urban and rural areas ~ entry of many new Indian and
    international organisations + attracting FDI through global alliances
EXPENDITURE PATTERN – by States in India

         2009 - 2013
                 HEALTH CITIES - Evolving in India
   Major corporate hospital groups are making significant investments
   Strong emphasis on Education, Research & Development
   Approx 15-20 Health Cities are expected to come up in the next 5 years
   Offering integrated facilities such as hotels, residential facilities, recreational
    facilities, golf courses

     –   Medanta MediCity – Gurgaon; 1,600 beds
     –   Fortis MediCity – Gurgaon; 800 beds
     –   Fortis MediCity – Lucknow; 800 beds
     –   Apollo Health City – Hyderabad; 700 beds
     –   Nagpur Health City – Nagpur; 2,000 beds
     –   Chennai Health City – Chennai by Global Group; 1,000 beds
     –   Bengal Health City – Durgapur; 50,000 beds
     –   Narayana Health City – Bangalore; 5,000 beds
     –   MIOT hospitals, Chennai – a multi-specialty medical city
     –   Reliance ADAG – 60 acre health city in Kolkata
     –   CMCH – Ludhiana; USD 12.2 million MediCity
               Source: The Economic Times, Realty Plus
                              UPCOMING / NEW PROJECTS
Disclaimer: This information is derived from public sources & is current to the best of our knowledge and is for informative rationale only.


•    Tamil Nadu State to upgrade 270 hospitals, estimated investment of USD 11 million
•    Wockhardt Hospital Plans to set up 4 new hospital across the country, total outlay of USD 100 million
•    Fortis Healthcare to invest USD 500 million in 28 hospitals across the country, growing the total number
     of healthcare hubs under its umbrella to 40 by 2012
•    Vendata Group to build 500 bed hospital in Puri with investments of USD 80 million
•    Apollo Hospitals Enterprise planning to invest UDS 360 million over the next two years on new hospitals
•    Sahara Prime City Limited to develop largest Tele-Medicine Network Covering 220 Hospitals
•    A 300 bed hospital to be built in Coimbatore with investments of USD 2.3 million
•    HLL Lifecare tied with US based Acumen Fund to set up chain of 100 hospitals across India by 2013
•    Spring Healthcare investing in Pune & planning a 600 bed hospital in Navi Mumbai and Thane in the
     next two years
•    Aditya Birla Group plans to build a specialty hospital in Jagdishpur
•    Ranbaxy Laboratories plans to construct a specialty hospital near Chandigarh
•    Columbia Asia Hospitals Pvt Ltd, has established a new 100 bed specialty hospital in Kolkata
•    Kerala Staff Construction Corp Ltd plans construction of a 400 bed hospital and propose to build a new
     350 bed hospital
•    Neotia Elbit plans to build a hospital in Siliguri
•    Artemis Health Sciences plans to set up over 15 hospitals across India by 2015
•    Medanta MediCity is promoting a USD 250 million world-class integrated healthcare facility in Gurgaon
                   Opportunities…..
•   Medical equipment market ~ USD 1.2 billion currently, growing at 15% pa
     – Instruments, medical devices and equipment - 40%
     (nearly 50% of high end medical equipment is imported ~ need for new technology)
     – Reagents and test kits - 20%
     – Radiology equipment - 15%
•   IT Driven Tools and Services in Healthcare
     – Growing at 22% pa, to reach USD 254 million by 2012
     – Requirement of niche hospital management systems & decision support systems that
       improve diagnosis and treatment
     – Tele-medicine and electronic medical record systems & tele-radiology systems /
       technologies
•   Nutrition & Wellness products
     – strong potential for offerings with natural ingredients
•   Education & Training for the medical fraternity
     – Potential for vocational training in Emergency Procedures; Paramedics
     – Collaboration with Indian companies / institutions for R&D activities / clinical trials;
       technology transfer
                      Opportunities…..contd
•   Establishment of private hospitals & design and development of super-
    speciality Hospitals
     – Hospital planning and consulting
     – Orchestrating hospital projects from idea to implementation (one-shop
         solution)
     –    Hospital accreditation
•   Clinical / Hospital waste management systems
•   Medical infrastructure development
     – Association with leading real estate developers
     – Focus on unexplored regions of India
•   Pathology services / laboratories
     – USD 500 Million sector growing at a CAGR of 20% pa
     – 40,000 independent pathology laboratories
•   Clinical research & trials
        USD 140 million sector, growing at a CAGR of 40% (projected value USD 2
        billion by 2013 )
                Australian Achievers….
Hospital development / management – Padghams,
   AusHealth International, Health Projects
   International
Hospital accreditation services – Australian Council on
   Healthcare Standards International
Hospital Information Systems / eHealth – Meditech,
   iSOFT Group Ltd , North Coast Radiology Group
Training and Education (incl. nursing, health economics)
   – QUT, Griffith Uni, RMIT, Box Hill Institute (TAFE),
   Other Private institutions
Pathology / Diagnostic Services – Healthscope Ltd,
   Symbion Health
Products – Cochlear, Resmed, NHC, Dynek and many more
                 Doing Business in India
                   things to know….
Know / Identify your market segment
   Good home work - a must
   Long term market commitment is essential
   Diverse nation with myriad cultural, social and political differences
   Local knowledge imperative to understand the market dynamics
Partner Selection
    Due diligence a pre-requisite
Cost effective VALUE proposition
   Develop a competitive pricing strategy to suit the market
   Sales cycles are protracted, especially whilst addressing the public sector
Focus on brand building
   Be local in approach (global organisations have all done it)
   Product / service offerings to address niche market segments

4Ps - Patience, Persistence, Perseverance and People
        Why you should participate in the mission ?
Australian providers of:
 Hospital and healthcare infrastructure ~ facilities design, consultancy or related niche products / services
 Niche medical devices and equipment
 Value adding eHealth solutions
 Health services ~ consultants, education and training are invited to participate in the mission

Key benefits…….
• Develop a first-hand, pragmatic understanding of the Indian market
• Unique opportunity to understand how to address the market‟s requirements through customisation and adaptation or
  through creating a need
• Test the waters for business entry and growth, through engaging with potential customers, business partners, product
  distributors and importers at Healthcare Infrastructure India 2010 and in the B2B Forums
• Benefit from the individual meetings with organisations (duly qualified by Austrade) that match your business interests
• Opportunity to expand existing business in India (either independently or with partners)
• Appreciate the nuances of doing business in the region, to harness the growing potential from a long term perspective

Attend or participate in Hospital Infrastructure India 2010 (7-9 Dec 2010) in Mumbai
 India's premier international exhibition on hospital infrastructure, planning, supplies and healthcare development
 Connect with key decision makers in the hospital / healthcare facility development sector, including product / service
   suppliers, investors, contractors and developers
 Garner inputs on upcoming hospital projects and refurbishment plans across the sub-continent to identify business
   opportunities and present / position your offerings accordingly
                             Austrade’s Value

o Understand your needs, and the market dynamics
o Up-to-date local market knowledge & pragmatic insights
o Quick access to Government, Industry & Business networks
o Identification &qualification of prospective business partners
o Market research
o Evaluation and recommendation of appropriate market entry,
  or business expansion, strategies for your organisation
o Consistent on-the-ground support, advice, assistance and
  guidance for your business through our pan-India presence
                 Summing Up……
The Indian healthcare sector can be viewed as a

glass half empty
   CHALLENGES
   the need to improve physical infrastructure
   the necessity of providing health insurance
   ensuring the availability of trained medical personnel

glass half full
OPPORTUNITIES
   developing new infrastructure
   supplying medical equipment
   delivering innovative solutions and bridging the gaps

Either way, the potential is enormous and growing…….
     The Next Steps.....Road to India !!!
        To register your interest in the mission


www.austrade.gov.au/MedicalMissiontoIndia2010


 For more information about the Indian market or the mission;

                    Ms Nidhi Bhardwaj
                      Austrade, New Delhi
                     T: +91 11 4575 6213
                     M: +91 98183 65653
              E: nidhi.bhardwaj@austrade.gov.au
                 Thank you
 Healthcare & Medical: Mission to India
            5-10 Dec 2010

Patrick Kearins – Trade Commissioner, Mumbai
Chaitanya Patil – Industry Team Leader for South Asia, Bangalore