Materia Medica Malaysiana

Raffles Medical Group expands into Malaysia

SINGAPORE : Raffles Medical Group has expanded into Malaysia by buying the Island Hospital in Penang for 110 million ringgit or S$48 million.

The move is in line with its strategy to broaden its geographical presence and transform itself into a significant regional player for healthcare services.


Raffles Medical Group owns Singapore's largest network of private clinics, with more than 60 of them throughout the island.

Besides that, it also owns and operates the 380-bed Raffles Hospital.

But until now, its foreign operations have been quite limited - just five clinics in Hong Kong and a representative office in Indonesia.

Buying Island Hospital will enable Raffles Medical to gain an immediate foothold in Malaysia, as it is a profitable operation with an established market share.

And it has growth potential as well.

Dr Loo Choon Yong, Executive Chairman, Raffles Medical Group, said, "We are buying something with a view to grow even more. And indeed there are possibilities of acquisition of some land nearby so that we can expand the physical facilities. We have confidence in Malaysia. That's why we are making this investment. We have confidence in Penang and we want to make greater investment."

The 240-bed Island Hospital has an occupancy rate of 70 percent.

It serves Northern Malaysia, Thailand and Sumatra.

Some 30 percent of its patients come from abroad, mainly Medan.

Raffles is buying the hospital at under two times book value and will be paying for it in cash, which it intends to finance mainly from reserves.

Meanwhile, Raffles says it is also looking at expanding into China, Indonesia and the Middle East, but has not set a timetable yet.

Dr Loo said, "Raffles does not just go out and acquire whatever comes in sight. We have been actually quietly looking at many, many opportunities. And we have our own internal hurdle. We have to see if something is worth acquiring, and whether it's synergistic and whether we can add value and whether it can add value to Raffles and its shareholders. If we are not confident of these things we will not acquire."

The group however says it is committed to becoming a regional player for healthcare services. - CNA