Philips plans to make medical equipment in India

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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% 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 6% annual growth in its healthcare business. The Indian Medical Division saw over 40% 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% of the total Philips revenues, next to consumer lighting at 50%. Mr Spittle said the total Asia-Pacific medical equipment market of € 5 billion was 20% 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.

Taken from Business Line

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