KPJ Healthcare allocates between RM100 million and RM200 million to expand its existing hospitals.
HEALTHCARE group KPJ Healthcare Bhd hopes to reach beyond RM2 billion in revenue this year based on its encouraging performance during the last quarter 2011.
Besides looking at acquisition opportunities, the group is keen to grow its medical tourism which currently commands about 5 per cent of its revenue.
"Eight of our hospitals are already earning more than RM110 million revenue a year with an occupancy rate of between 66-75 per cent," said managing director Datin Paduka Siti Sa'diah Sheikh Bakir during an interview recently.
The company is the country's largest private medical entity with 20 hospitals under its arm. "Our mergers and acquisition initiative depends largely on the opportunities that arise. We look at hospitals that are promising but with lack of fund to expand," she said.
Recently, KPJ Healthcare teamed up with Naim Land Sdn Bhd to build and operate a hospital in Miri.
The joint venture was in line with the group and its subsidiaries' objective to increase its network of hospitals to locations where private healthcare is in demand, enlarge the customer base as well as other areas of healthcare services.
KPJ Healthcare hopes medical tourism contribution will grow between 15 per cent and 25 per cent in another three to four years.
"While there are many hospitals here keen to tap into this sector, we are optimistic that there are plenty of room to grow. Our total market share in this segment right now is about 10 per cent," she said.
Many foreigners are choosing Malaysia for medical treatment due to its affordability and quality.
Indonesia and the Middle East remains as its largest market for medical tourism and the group plans to set up more representatives in these countries.
Last month, KPJ Healthcare acquired 80 per cent stake in Indonesia-based PT Khidmat Perawatan Jasa Medika (PT KPJ Medika) for RM15.84 million. KPJ Healthcare has in fact been managing the hospital in the last 15 years.
The acquisition was in line with the company's strategy to expand its hospital network in Indonesia in order to tap the strong potential demand for private healthcare there.
KPJ Healthcare has also been looking at means to diversify its business activities. Sa'diah said the company is currently talking to relevant parties to set up a retirement village in Kuala Lumpur and Johor, similar to the one it currently manages in Australia.
In 2010, the group made its maiden foray acquiring a controlling stake in Jeta Gardens, a retirement village in Queensland Australia which contributes less than 5 per cent to its revenue at the moment.
"Caring for the aged is a new sector for us but we see a huge potential to grow looking at the demand for this segment," she said.
Besides healthcare, the company also operates KPJ International University College of Nursing and Health Sciences.
For the financial year ended December 31, 2011, its net profit grew 10.6 per cent to RM131.7 million compared with RM119 million before. Revenue was 14.5 per cent higher to RM1.89 billion against RM1.65 billion in 2010.
Source: Business Times