30 Minute Interview

'We Plan to Add 2,000 beds in Next Few Years'

The healthcare facilities in the Eastern part of the country are plagued by scarcity of resources and dearth of funds. But that seems to change now. And it may be no exaggeration to say that Kolkata-based AMRI Hospitals is a key player in ushering the change. Since its inception in 1996, AMRI Hospitals has grown to become the largest private hospital group of Eastern India with 560 beds. The Hospital today offers tertiary care with super specialities in cardiology, neurology, orthopedics, oncology, critical care, urology, gynaecology, paediatrics, gastroenterology and many other super specialities. DN Agarwal, Executive Director, AMRI Hospitals talks to Sonal Shukla about the expansion and future growth plans of the Group. Excerpts:

DN Agarwal Director, AMRI Hospitals, Kolkata

What is the potential of growth for private healthcare in Eastern India that AMRI wishes to tap?

For many years, patients from the North-east and Eastern India have been traveling to South, North and Western India for quality medical treatment. New capitals of Jharkhand (Ranchi) and Chattisgarh (Raipur) and undeveloped capital of Orissa (Bhubaneshwar) do not have private hospitals of good quality. Hence, there is an instant potential for growth of private hospitals in Eastern India.

What are your expansion plans?

We want to become the largest healthcare provider of East India by adding up 2,000 beds and chain of medical centers in the next three to four years. We have just completed the expansion and renovation of our existing medical centre at Southern Avenue, Kolkata to provide specialised treatments in dentistry, IVF, ENT, ophthalmology and other day care surgeries.

Out of the 2,000 beds that we have planned, 640 beds are already under construction in Kolkata and Bhubaneshwar. Besides, we are also in talks for some acquisitions. We will build about 60 per cent of the planned expansion by way of greenfield projects and 40 per cent by acquisitions. All our hospitals would be multi-speciality tertiary care hospitals. The 300-bed multi-speciality hospital in Bhubaneshwar will come up in phases with nursing school and hostel. The building design is planned with the healing concept in mind, which emphasises on brightness and greenery around. The estimated project cost of this project is approximately Rs 120 crore.

On the other hand, the women and children hospital on Eastern Metropolitan Bypass, Kolkata will be on a land area of one acre with 175 beds. Along with this hospital, the Group has planned a general hospital at EM Bypass, Kolkata of about 100 beds with the state-of-the-art facilities in an area of 0.66 acre. The total manpower strength of this Hospital would be around 960. Besides Kolkata and Bhubaneshwar, we are planning to put up hospitals in Raipur, Ranchi and Guwahati as these areas lack private hospitals providing specialised treatment facilities. However, except for Bhubaneswar and Kolkata, not much work has started in other places.

How do you plan to fund your expansion plans?

The expansion would require around Rs 850 crore which will come by way of loans from financial institutions and promoter's contribution.

What marketing strategies are adopted by AMRI to expand at such a fast pace?

We have done market studies in the cities where we are planning to put up hospitals. Most of the studies confirm demand-supply gap based on the fact that many people travel outside these cities for better treatment. Also, the market is growing because more and more people are getting health insurance. It is very inconvenient and costly to travel to other parts of the country and one would always prefer to get treated in one's own city. We have an existing central marketing team, which will take up the marketing as and when the facilities are almost ready. We are taking up aggressive marketing through internet, personal and institutional contacts, participation in exhibitions and various tie-ups.

Why is your expansion only focusing on Eastern India and not on other parts of the country?

That is because the owners of the Hospital (Emami and Shrachi Groups) are Kolkata based. We were having only one hospital till 2005 in Kolkata. During 2006-07, we have added up two more hospitals and increased the capacity from 180 beds to 560 beds in Kolkata itself. We feel that in the coming three to four years, if we put up more hospitals in Eastern India, we will be able to manage the growth better. Besides, our other Groups have existing business in Orissa, West Bengal, Assam and therefore we are more confident and comfortable in Eastern India.

How do you plan to exploit the opportunities associated with medical tourism in Eastern India?

India's medial tourism is already a $300 million industry with the growth rate of 30 per cent and the Eastern region is said to be one of the major beneficiaries. There is a good potential for medical tourism in Kolkata and Bhubaneswar particularly from neighboring countries like Bangladesh, Nepal, Bhutan and Myanmar. There is also possibility of medical tourism from Singapore, Malaysia and Thailand due to cost considerations. There might be small number of patients from the Middle East and Western countries too.In addition, we have already started an international marketing division. The new capacities to be created by AMRI will find their market by preventing the patients going to South, West and Northern India.

How will the collaboration with KK Women's & Children's Hospital, Singapore and London’s Great Ormond Street Children's Hospital help towards attaining your vision?

Though we have not yet finalised these collaborations, we feel that collaborating with the world's best helps in following the best practices of those hospitals to render high-class services. What these hospitals have learnt in decades can be provided to the patients by us instantly without going through a process of learning by mistakes.

Are you tapping any overseas markets?

No, at the moment we are not considering any acquisition or building up any hospitals abroad.

What is the rationale behind entering into a strategic collaboration agreement with Pacific Healthcare, Singapore?

Pacific Healthcare has a wide network of clinics and facilities in Singapore. With this tie-up, we wish to provide expertise to our doctors in the field of dental implants, IVF, pain management, sleep disorders while also learning their best practices to manage these centers. This tie-up envisages bilateral cross-referral of patients, whereby patients seeking specialist services unavailable at AMRI will be referred to Pacific Healthcare's specialist centers in Singapore. These patients as well as returning expatriates to Kolkata will also be assured of continuity in the management of their healthcare requirements. Also in the focus will be training on the best practices followed by Pacific in Singapore to improve the services for the patients on one hand and increasing marketing of the services on the other hand at AMRI.

sonal.shukla@expressindia.com