Having invested earlier this year in two of the most reputed healthcare assets in Abu Dhabi, Alchemist Healthcare LLC took another step towards becoming a regional leader in the healthcare sector by completing this transaction.
Mussalla Medical Centre was established in the early 2000’s in Bur Dubai area, capitalizing on the strong demand for healthcare services in Dubai, and buoyed by the notable flow of expatriates into the city. The centre commenced operations with only 3 doctors, and grew over the years to become a fully-fledged medical facility, with more than 20 doctors in more than 14 specialties, in addition to providing laboratory and diagnostic services.
Commenting on the transaction, Mr. Shailesh Dash, CEO and Founder of Al Masah Capital Management Limited stated, “The inclusion of Mussalla Medical Centre in our healthcare group is a significant step for our UAE expansion plan, having invested already in the fast growing Abu Dhabi market earlier this year. The centre is a true success story, as doctors now treat more than 300 patients a day at the centre, a number expected to grow even further with the ambitious expansion plan we have set out for the centre in the next 6 months.”
Mr Amitava Ghosal, Partner at Al Masah Capital Management Limited, added, “The Dubai healthcare market is on the verge of a significant reform. There are initiatives being taken by the government to reform the insurance sector and to focus on providing better healthcare services to combat rising non-communicable diseases such as diabetes, hyper-tension, and obesity. Through our Dubai operations we intend to help meet the rising healthcare needs of Dubai population.”
The private healthcare sector in Dubai is expected to receive encouragement from the initiatives being taken by the government to reform the healthcare sector. Having a reformed health insurance scheme in place, and increasing the awareness on the importance of leading a healthier lifestyle will definitely encourage the the healthcare players operating in the city of Dubai to make facilities of international quality available to the local population.
Mr. Shailesh commented on Alchemist Healthcare LLC’s strategy by adding, “Having invested in Abu Dhabi and Dubai, we are looking for further expansion in the UAE and the wider GCC. We still feel that adding two or three more healthcare facilities in the UAE, especially Dubai will enhance our group’s value and network of doctors and healthcare facilities.“
Mr. Shailesh explained the future plans of Alchemist Healthcare LLC saying, “The socio-political changes that we have witnessed in recent times have increased the importance of sectors like healthcare and we can see a lot of emphasis from many governments to encourage more investments in the sector, both from public budget and private resources.”
“We are now working at Alchemist Healthcare LLC to expand our reach to the neighbouring GCC countries, and are already negotiating deals in Kuwait, Oman, and Saudi Arabia,” Mr. Shailesh added.
Mr. Amitava explained the assets’ roll-out of the healthcare business. “We have plans to invest close to Dhs150m in the GCC healthcare sector by the close of 2011 and will further expand our services in 2012 to cover North Africa. We are looking at adding more facilities in Dubai, Sharjah, and Al Ain as well as introducing our services in Kuwait,” he said.
“Mussalla Medical Centre has a strong brand name and a great team of doctors. It has been providing quality healthcare at very affordable prices and we intend to build on its current success to expand the current location into a day-care centre, expand the team of doctors and widen the scope of services over the next 6 months,” he added.
Home to more than 214 million person, and expected to reach 233 million by 2015, and 272 million in 2025, the MENA region is one of the fastest growing regions in terms of population growth. Resultantly, healthcare expenditure is expected to register $125bn by 2015, almost double 2009 expenditure of $65bn.
The MENA region’s high literacy rate and income levels are providing the adequate cushion for its residents to demand and aspire to better healthcare services. A significant gap can be witnessed between the demand and supply of healthcare services in the region, as the average hospital bed count per 10,000 people in the MENA region is 21.6, much lower than developed economies such as the UK (33.8) and the US (31.0).
According to recent estimates, 200,000 hospital beds are urgently required in the MENA region to match the increasing demand for healthcare services. This provided an opportunity for the flow of investments into this promising sector, which of late witnessed significant investment activity from the private sector.
According to recent figures, healthcare infrastructure projects worth $14bn are already underway in the GCC. According to Middle East Economic Digest (MEED), there are 109 active healthcare projects in the region. Of this, Saudi Arabia accounts for 56, the UAE 24, Kuwait 17, and Qatar, Oman and Bahrain 12.
Private equity players have invested a total of $882.1m (disclosed value) through 13 deals in the MENA healthcare sector since the beginning of 2005. Going by the deal count, there has been increased activity in the sector since 2006/07. The UAE is the clear favorite among private equity investors. Six (out of 13 deals taken place in the MENA since the beginning of 2005) were with companies based in the UAE. Egypt follow suit with 3 deals, then Saudi Arabia with 2 deals.
Despite the notable growth in private sector’s participation in financing the healthcare sector, it is pertinent to mention that the MENA region still offers opportunities to private investors to enter the healthcare spectrum, as majority of the healthcare expenditure in the MENA region is still borne by the governments. Suffice to mention that In Saudi Arabia, one of the largest economies in the MENA region, the government (through the Ministry of Health) finances 68% of the total cost of healthcare. The share of government expenditure on healthcare is high in Algeria (86% of total spending), Qatar (80%), Kuwait (76%), Oman (76%) and Libya (70%), among others.
Sunday, October 16- 2011 @ 11:28 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.