Philips sees big opportunities in medical solution business

The Jakarta Post ,  Jakarta   |  Mon, 10/08/2007 8:32 AM  |  Business

Earlier this month Philips and BusinessWeek organized a regional symposium on access to healthcare in Kuala Lumpur, Malaysia, to seek common grounds for the business sector and for healthcare providers to provide better public services.

In Jakarta last week, President Director and CEO Philips Indonesia Rob Fletcher spoke to The Jakarta Post's Emmy Fitri on the company's medical system.

Compared to other Southeast Asian countries, Indonesia still has a relatively poor healthcare system in terms of facilities and human resources. Do you see this as a challenge?

As an opportunity, not a challenge, because Philips has in recent years put more emphasis on bringing world-class healthcare solutions to more and more people. We are not just in very expensive high-end systems. We're also at the low-end. And we are into systems that are very much standardized like basic x-rays and ultra sounds for smaller hospitals or clinics looking for these type of products.

Our sales and our intention is to bring these products to more and more consumers, so not just the top R&D facilities in the world and the top hospitals but also the mass market, though I hate to use the word because it sounds ridiculous.

But, really, we have an entry level for basic products in x-rays and ultra sounds in many other areas because one of our goal to grow and expand this market penetration. Indonesia in that respect offers tremendous opportunity as does the emerging markets of China, India and Russia.

But the country's poor basic infrastructure includes the lack of electricity especially in remote areas. How do you see this?

Of course, some of the basic infrastructures have to be in place. If you see what we've been doing in some similar types of market, in the Philippines, for instance, we have success with remote diagnostic activities where people from a small rural area can link in to centralized headquarters and obtain advice with regards to the status of the patients in rural areas. This is the way to use quite advanced technology and make development for people in rural areas.

What are actually the challenges for Philips here to bring more public awareness of the brand?

First and foremost we have to have products that meet the needs of the local market. And in most cases we've been successful doing that. Most of our activities, we have adapted the products to the local Indonesian market needs.

I'll give you an example, we have a dry iron which is the number one selling product in Indonesia. It only uses 350 watts of electricity. So in a village where the power is not to a level where you can run many appliances at once, we have low voltage products. And it's been specifically produced for the Indonesian consumers and it's been successful.

What are your biggest competitors?

We have main competitors coming out from Japan and the U.S. not just in Indonesia but worldwide. They, I am sure, have similar problems in getting into all of the market.

I personally think that the opportunity outside Java is growing now. It seems the commercial opportunity outside Java is greater these days.

The fact that the economy has been growing solidly with good GDP growth rate above 6 percent for the last few years and hopefully that will continue in the coming years. And the inflation has been under control, following the energy increases two years ago. And the rupiah is reasonably stable.

The macro economic picture of Indonesia is quite good. Provided the infrastructure shortcomings can be addressed, this country has tremendous potential to continue to grow.

What is your set target for 2008 sales?

For certain products, we are looking to double our sales. In the healthcare sector, we're expecting a two-digit growth. In Indonesia alone we have targeted a 20 percent increase.

Not only is it possible but it should happen because a large number of people, unfortunately, are still going overseas for their healthcare treatment. That's a fact of life.

Depending on who you talk to, the figure is up to $500 million worth of medical treatment is purchased by Indonesian consumers outside of Indonesia. It's a direct result of consumers feeling uncomfortable with the level of services provided in the country.

If we can raise the expertise, the level of professionalism and care in Indonesia, more and more people will feel comfortable being treated in their own neighborhood. That's what has to happen.

That's why we are particularly hopeful and positive about the future development of healthcare in this country. Philips can provide tremendous healthcare solutions. We are not shy about it of course we feel great about doing good. And healthcare is about doing good.

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.