Mumbai: The world’s largest medical devices company, GE Healthcare, part of General Electric Co., intends to acquire local diagnostic equipment makers in India to help boost its growth in the region and expand its reach in semi-urban and rural markets.
In focus: A file picture of the GE Lightspeed VCT, a non-invasive imaging system, on display at the American College of Cardiology 2006 Summit in Atlanta, Georgia. GE Healthcare is looking to introduce certain made-for-India models of high-end medical imaging systems that can be used in small hospitals.
GE’s targets in the local market will be ideally diagnostic equipment manufacturers that can complement its product portfolio and help expanding its rural network, an executive at the firm said.
“We are open to such deals in India since our current growth plan includes organic expansion as well as strategic acquisitions,” said V. Raja, president and chief executive, GE Healthcare South Asia.
“But if you ask me whether any targets have been identified, my answer is not yet, though there are at least half a dozen such players are around in the market.”
GE Healthcare, Philips Medical Systems and Siemens AG occupy the top three slots in the Indian medical imaging market with nearly equal market share. While their reach is mostly in urban India, domestic companies such as BPL Health Care Ltd, Chennai-based Trivitron Medical Systems Pvt. Ltd and Sigma Diagnostics India Pvt. Ltd are active in the semi-urban and rural markets.
GE Healthcare is targeting at least a 65% jump in revenue from India to $800 million (Rs3,200 crore) in the next two years. Its India revenues were a little more than $500 million at the end of 2007.
The company expects most of this growth to come from expanding its imaging and infant care products range, especially in the so-called tier II and III cities.
GE Healthcare is also looking to introduce certain made-for-India models of high-end medical imaging systems such as medical scanners and digital imaging to expand the reach of such products to small and medium hospitals.
The radiology segment, which includes medical imaging and diagnostics equipment, accounts for around 15% of the $2.1 billion-a-year by sales Indian medical devices market. This segment is growing at 16-18% a year.
Currently, almost 60% of GE Healthcare’s revenue comes from exports of locally manufactured products to international markets. With the planned expansion into rural areas, the company expects to see sales within India increase to 50% of its total revenue by 2010, Raja said.
“This growth will be mainly driven by the rural market expansion, and acquisitions will be one of the key strategies,” he added.
On Thursday, GE Healthcare announced its acquisition of VersaMed Corp., a provider of portable critical care ventilators for respiratory care.
This acquisition is likely to help the company’s India growth as portable ventilators are relatively new to India.
Most of the ventilators used in Indian hospitals require the use of piped compressed gas, which calls for considerable investment. This has limited the spread of ventilator technology across India to large hospitals in major cities and only rarely have these investments in critical life-support technologies been made in smaller cities or villages.