The Hindu Business Line : Philips plans to make medical equipment in India

Made-in-India X-ray or patient monitors with a Philips tag may not be far off: parent Philips Electronics plans to foray into medical equipment manufacturing in India through an acquisition or in a joint venture with a local company, according to Mr Wayne Spittle, Vice-President & General Manager, Asia Pacific, Philips Medical Systems.

These are early days and there are no targets to name yet. An Indian venture, when it happens, would make affordable and low-end imaging equipment such as X-ray machines and personal healthcare monitors for the domestic and regional markets, Mr Spittle, based in Hong Kong, said during the company's interaction with global media in Chicago.

Biggest exhibitor

This year, Philips was the biggest exhibitor at Chicago's annual November global medical technology meet put up by the Radiological Society of North America. The Philips medical diagnostics portfolio includes MRI, heart imaging, patient monitoring, automated external defibrillators for cardiac emergencies.

In China, Philips has a 51:49 joint venture with Neusoft Digital Medical Systems to make CT scanners, MRI, ultrasound, X-ray equipment for its global markets. Currently, 95 per cent of medical diagnostic equipment installed in the country's healthcare agencies is imported due to a favourable duty structure. Magnetic resonance imaging and CT scan equipment costs hover at Rs 5 crore and Rs 1 crore, and local manufacturing is believed to cut these costs by up to half.

The € 30.4-billion ($37.7-billion) Philips, which now calls itself the healthcare lifestyle technology company, has been seeing a six per cent annual growth in its healthcare business. The Indian Medical Division saw over 40 per cent growth in 2005.

Healthcare acquisitions

All the four global acquisitions it made in the last 15 months are related to healthcare: Stentor, leader in PACS or picture archival communications systems in 2005; Witt Biomedical; IGC that makes magnets for the MRI machines; and Lifeline, a senior citizens' medical emergency helpline.

"We have spent € 3.5 billion on these acquisitions in the last 15 months and (still) have sufficient needs for M&As," said the Philips Electronics CEO, Mr Gerard Kleisterlei. The company, he said, has already seen a major shift towards healthcare while the boundaries of the traditional electronics industry have collapsed.

Professional healthcare accounts for 30 per cent of the total Philips revenues, next to consumer lighting at 50 per cent. Mr Spittle said the total Asia-Pacific medical equipment market of € 5 billion was 20 per cent of the global market. The company's plan is to grow to € 1.3 billion in the region in 2008, up from the current € 900 million.

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