Newsmaker 2008

Getting Bigger and Better

Undoubtedly, it is Philips Healthcare that turns out to be the most aggressive business player in 2008

The year witnessed the transition of Philips Medical systems to Philips Healthcare addressing broad range of healthcare needs, at home and at hospitals. In line with Philips' focus on emerging markets, two products were launched through 2008 (SureSigns VM3 and Ultrasound HD15) - designed specifically to address the growing healthcare needs of these markets. 2008 also witnessed acquisition of two healthcare companies (Alpha X-Ray Technologies and Meditronics) catering to the value segment in Diagnostic X-ray and Cardiovascular X-ray - in turn helping the company strengthen its industrial and manufacturing footprint in India.

Philips stepped up its focus on emerging markets by creating an emerging markets structure which has become operational since April last year. Focusing on emerging markets, allows the company to accelerate growth in developing countries such as India, China, Latin America and Russia.

"Executing on our strategic decision to scale up our presence in emerging markets has been an important element of Philips' transformation into a focused, less-cyclical company in recent years," said Gerard Kleisterlee, President and Chief Executive Officer, Royal Philips Electronics.

With a strategic 'Vision 2010,' Philips aimed at simplifying the business structure by creating three core sectors with strong single-headed management- Philips Healthcare, Philips Lighting, and Philips Consumer Lifestyle. January 1st, 2008 onwards, Philips integrated the erstwhile Consumer Electronics (CE) and Domestic Appliances and Personal Care (DAP) businesses into one 'Consumer Lifestyle' sector. Philips also combined Home Healthcare Solutions with Philips Medical Systems, under the new name of Philips Healthcare.

In the year 2008, Philips also opened its advanced healthcare technology factory in Brazil which is reportedly the first magnetic resonance and computed tomography plant in Latin America. Three types of Magnetic Resonance device will be manufactured in Brazil: the Intera 1.5T and Achieva 1.5T and 3.0T. Initially, 70 per cent of the components for the devices will be imported, but Philips' intention is to increase the proportion of locally-produced components to 60 percent by mid-2010. The company is currently identifying and equipping locally-based factories to enable them to manufacture many of the highly advanced components used in the devices. "In a sense we are going through the same process that the Brazilian automobile industry underwent a few decades ago- by strengthening a specialised industrial sector we can position the country amongst the leading manufacturers of medical equipment globally," added Speranzini.

2008 was probably the most aggressive year in terms of expansion and business development for Philips as apart from alpha X-ray and Medtronics in India it also acquired of healthcare companies like Brazilian Dixtal Biomédicae Tecno-logia, Shenzhen Goldway Industrial in China and VMI Sistemas Medicos in Brazil. Philips will leverage its global distribution network to sell Alpha's cardiovascular X-Ray products, thus maximising the value of the acquisition and adding another growth engine to Philips Healthcare's emerging markets business.