SHAH ALAM: Integrated healthcare services provider BP Healthcare Group has come a long way from when it started out as a clinical laboratory in Ipoh 34 years ago, to the nationwide presence and 1,200 staff it is today. Its director Datuk Chevy Beh (pix), however, says that what it has achieved is only 25% of its target.
" At 100% (of my target), I would have at least 20 hospitals and be controlling the whole value chain in the market - from primary, secondary to tertiary care," he told SunBiz in an interview.
Beh said it aims to expand its five BP Specialist Centres to 20 in three to five years' time and then convert them into hospitals, which is part of its plans to build a chain of hospitals. Each specialist centre costs between RM20 million and RM40 million, depending on location.
"The ultimate game plan is to convert all of it to hospitals and compete with KPJ Healthcare Bhd and Pantai Holdings Bhd. But we are privately held, we have limited funds. We have to be very careful how we expand but we're quite fortunate, we've been in the business for 34 years which gives us a huge head start and we will continue growing at that momentum," he said.
The group currently has five specialist centres in Cheras, Petaling Jaya, Klang, Glenmarie (Shah Alam) and Ipoh. It has two more under renovation in Penang and Johor and it will acquire another two more in Muar and Batu Pahat before the year ends, bringing the total to nine centres.
"It is quite capital intensive but for us we're not going in as greenfield. We have already identified the locations where we want to do up, it's mostly upgrades, sort of like an extension of services. We're pretty confident because it's quite safe, we know the area is doing well, then we expand. We're using our own funds so we make sure everything is well spent. Our funds are a combination of internal generated funds and bank borrowings," said Beh.
He said converting its specialist centres to hospitals would complete its value chain, as it would be able to offer the entire range of health services to its patients instead of referring them to other hospitals. This would also offer convenience and quality, coordinated healthcare to patients.
Besides organic growth, the group is also looking at acquisitions and is looking at buying hospitals to grow faster.
"We're evaluating a couple of hospitals but by year-end we should close at least one hospital acquisition. The cost depends on the asset size, type and maturity of the business - whether it is in growth or distress stage, whether it needs refurbishment; all this will be factored into the pricing of the asset," Beh said.
On overseas expansion, he said the group has been courted by various parties from the region including Indonesia, Thailand, Myanmar, the Philippines and Vietnam but it has yet to come across any deals that have the right formula or chemistry for the group.
"Not that we don't want to go in…but we want to go in because there's a reason for it. Domestically, I still have so much ample growth opportunity. As I mentioned, from where I am to where I want to be, I'm only 25% there. I still have another 75% to go and I haven't hit that," he said.
He said despite the relationship it has with Red Bull International of Thailand, there have been no concrete plans for a partnership between the two.
"It's a shareholding issue. They need 51%. We don't want to go in and get into trouble after building everything and get taken over. What's the point of doing business that way? It would be better to put money in the bank. A lot of these countries are not very business friendly to foreigners, depending on the industry you're in. Food and beverage is easy but healthcare, like banking, is extremely regulated.
"To put money there for six months with zero revenue or sales, are you going to say, go flood the market? But why flood the market there when there is a gestation period there? Here there's almost no gestation period for us, my branding is so strong here," he added.
Beh said ultimately, it has to have a strong foundation in the local market before expanding overseas.
Last year, the group recorded an additional 800,000 new patients, bringing its total to some three million patients per year, which he said, is more than the total patient load of KPJ and Pantai hospitals combined. Revenue and profit rose 50% and 38% respectively last year.
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