Malaysian hospital operator IHH Healthcare has set its sights on expansion into Indonesia and Vietnam to boost its scale amid escalating care expenses in the region, as reported by Bloomberg.
Indonesia’s healthcare reforms and relaxed foreign ownership rules, along with Vietnam’s burgeoning market present new opportunities for growth, stated IHH Healthcare CEO Prem Kumar Nair.
Prem Kumar Nair said: “We get a lot of patients from Vietnam into our Singapore operations.”
IHH runs over 80 hospitals across ten countries, encompassing Singapore, India, and China. The hospital operator is on an acquisition spree, having recently added Island Hospital in Malaysia to its portfolio in 2024.
Its subsidiaries, Acibadem in Turkey and Fortis Healthcare in India have also expanded by purchasing additional hospitals in the past two years.
IHH has a market capitalisation of $14bn. The group is tackling the challenge of rising import costs by bulk procurement of medical equipment, consumables, and generic medications, highlighted the news agency.
This strategy aims to reduce the financial burden of imported goods, according to Nair.
In China, IHH is focusing on solidifying its presence. The company has transitioned its clinic business into a profitable venture and is witnessing an increase in patient numbers at its Shanghai hospital.
Despite China easing foreign investment restrictions in the healthcare sector, IHH remains cautious about further expansion, given the strong competition from the public sector, as further outlined by Bloomberg.
Nair said: “In China, the public sector is a very big competitor to private healthcare.
“We are the only foreign operator in China who has a combination of clinics, and an ecosystem, so we will build on it.”
The company’s growth plans are not limited to new markets. It also intends to increase hospital bed capacity by 33% from 2024 through 2028 in existing markets, adding 4,000 beds.
For the first quarter, IHH reported a revenue of MYR6.29bn ($1.48bn), a 5.7% rise from the previous year. However, its profit dropped 33% to MYR514m, due to exceptional accounting adjustments.
While Turkey, Singapore, and Malaysia are the current primary revenue sources, the company anticipates India to become a significant contributor due to the growing demand for private healthcare.
Nair emphasised the importance of developing out-of-hospital care, such as ambulatory surgical and care centres, to mitigate cost pressures. IHH operates 60 such non-hospital healthcare facilities.
While Singapore has established a comprehensive ecosystem and Hong Kong is progressing towards one, Malaysia’s regulations currently prevent hospital operators from managing other healthcare facilities.