FIVE-YEAR PLAN: Group may spend RM1.8b to double the number of hospitals to 12
RAMSAY Sime Darby Health Care (RSDHC) may spend as much as RM1.8 billion over a period of five years to add some muscle to its planned expansion drive.
RSDHC is a marriage between Sime Darby Healthcare Bhd, a unit of the country’s oldest conglomerate Sime Darby Bhd, and Ramsay Health Care Ltd, which runs Australia’s largest private hospital network.
Business Times understands that the planned capital outlay is for the purpose of opening as many as six hospitals in half a decade.
RSDHC is looking at Vietnam, China, Indonesia and Malaysia as some of the locations for its expansion plan, which will eventually double the number of hospitals under its flagship from six to 12.
“We are looking at the Asia-Pacific market.
The current six hospitals will be the driver for our expansion,” Sime Darby Bhd president and group chief executive officer Tan Sri Mohd Bakke Salleh told newsmen, here, yesterday after the official launch of the RM320 million ParkCity Medical Centre by Prime Minister Datuk Seri Najib Razak.
Five other hospitals under RSDHC are Subang Jaya Medical Centre (SJMC), Ara Damansara Medical Centre and three in Indonesia, namely RS Premier Jatinegara, RS Premier Bintaro and RS Premier Surabaya.
Bakke did not want to comment on the size of the war chest to expand RSDHC’s outreach.
“I cannot reveal the amount, but a new hospital could cost us between RM200 million and RM300 million.”
He said RSDHC is banking on the expansion plan to set the momentum for the company, adding that the six hospitals under RSDHC have a combined 1,500 beds.
Bakke said the healthcare business contributes one per cent to the group and he expects it to grow.
He added that the period for the operator to break even is about nine years, after which the returns will be good.
Bakke said in the last five years, SJMC had registered a profit of RM20 million to RM25 million a year.
On whether the group is cautious about expanding due to the recent outflow of funds from emerging Asian economies, RSDHC CEO Raja Azlan Shah Raja Azwa said the hospital business is a long-term one.
“The Asian growth story is still strong and our brand speaks of excellence in healthcare,” he said.