Philips India Vice Chairman and Managing Director, Raja Venkataraman has announced the international corporate’s decision to venture into health and wellness right up to home care, in the face of the affinity and trust that the brand invokes among consumers in India.
Speaking about the company plans in the country in an interview to mint, Mr. Venkataraman spoke about its aim to boost profitability and improve its standing in the global healthcare sector; all this in the coming five years. Highlighting the near total absence of early diagnosis and treatment in India, Mr. Venkataraman felt that if these were made available, the costs of treatment would go down and meet up with the needs of a country where the propensity to pay was less. Describing it to be a very compelling vision, he revealed that the corporate planned to touch 3 billion lives by 2025, in a country of 1.3 billion.
Understanding the opportunity as huge and untapped the Vice Chairman said, they were looking at areas like Ultrasound and CT scanner, which were part of some of the personal health products.
‘We are the most trusted brand which now focuses on detection, prevention, well being and personal healthcare,’ he added.
Talking about ‘Profitability,’ Mr. Venkataraman explained profit was not about cutting costs or increasing price, but more about making and delivering products based on what a customer might want, at price points they could afford, and quality that was consistent and that which they expected.
Averaging profits of healthcare companies at 10-15% EBITDA, the Philips Director expressed the company’s intention to reach the same level in the coming 2-3 years. Talking of revenues, Venkataraman expressed his intention to contribute 5% of global revenue in 5 years. Speaking to live mint he concluded by saying that Philips as a corporate intended to enhance its capability as much as possible.
‘We are looking for acquisitions in India in the areas of health-tech and personal health, essentially areas we do not play. I would like to target space where I want to be, where I am not present now. It could also be technology that is available ready made, or a great product that the current owner could not scale up. Over the next one year, we will close at least one.’ he added.
On prospects of manufacturing in India, the Director made it implicitly clear by saying, ‘at the moment, for health-tech companies, it makes almost no sense to manufacture because of the duty structure. First, you have to ensure that duty on imports (of components) is zero. The only thing they should charge is value-added tax and only then will people invest. Because if my total cost is higher to manufacture in India, what is the difference between manufacturing in India and importing?’
Closing on a positive note he said that if software in this country could be a $160 billion industry, why couldn’t one think of making healthcare a $ 100 billion one in the coming 15 years.