IFC speaks on Rockland Hospital

2010-05-18T21:44:00.000-07:00

1.Rockland Hospital in Manesar. When we visited 2 years ago, this was just a vacant land.

2.Rockland management. President of Rockland Hospital, Rajesh-san (center), President’s brother and in charge of Finance Prabhat-san (left) and Umesh-san in charge of launching a health channel (right)

The following is the English Translation of the Blog in Japanese written by Ms. Sachiho Nakayama, an Investment officer with the International Finance Corporation (IFC), a World Bank Group member. The translation is done by the author herself.

May 11, 2010

Indian Hospital Project

I spent my first year at IFC in the Health & Education Department. Today I would like to share with you my experience on a hospital project I did in India at the time.

Many of us are under the impression that the economic growth of India in the last couple of years has been quite robust. However, there is still a shortage of doctors and hospitals in India, especially in the rural areas. According to the World Health Organization (WHO), India’s bed to people ratio is 0.7 per 1,000 and is only one fifth of the WHO recommended level of 3.2 per 1,000. At the time of this project in 2008, the medical industry in India was projected to require US$3 billion in investments by 2012, of which 80% had to be invested in the private sector of the medical industry.

Rockland hospital began operation in 2004 in New Delhi with 90 hospital beds. They hired many experienced doctors from India’s military hospitals and achieved growth through diligent cost management. The hospital is managed by three brothers. They focus mainly on the business aspects of the hospital, while they have delegated the medical side of the management to the doctors. Some of these doctors are shareholders of the hospital and the doctors that we spoke to during appraisal said that they were all motivated to work at Rockland as they were involved in the management of the hospital.

There are even some Indian doctors at Rockland who were educated and practiced in the United States, who joined Rockland hospital and left their jobs in the United States because they wanted to contribute to medicine in their home country and because they heard good reputations about Rockland.

IFC invested US$14 million in common and convertible preferred shares to: (i) expand the New Delhi hospital; (ii) construction of the Manesar hospital in IMT; (iii) construction of the satellite clinics to support New Delhi and Manesar hospitals; (iv) creation of a TV channel dedicated to offering medical information.

Manesar IMT is a large industrial township with Japanese companies such as Suzuki. However, back in 2008, there were no hospitals in the 10km radius of Manesar. It was projected that with the growth of the IMT, there will be more factory workers and those in the service industry that were expected to reside in the Manesar area. Therefore, construction of the hospital was a necessary infrastructure in the IMT.

Satellite clinics are to be constructed in more rural areas from New Delhi and Manesar to facilitate simple operations and out patients so Rockland can treat more patients.

The TV program will be launched by Umesh, a journalist and a childhood friend of the three brothers. This is to offer Indians information on health issues and Q&A programs with doctors to answer questions from viewers with the hopes that Rockland can raise health standards of Indians.

For me, the story which moved me the most was how the three brothers reached their success. When the oldest of the three brothers, Rajesh, was 15, their father passed away. In order to support the family, he borrowed $500 from their relatives in 1975 to start a denim factory. As import denim started to put price pressures on their company, they quickly sold their business and started to import electronics. Eventually this business also became less competitive, so in the 1990s, they entered the hotel and construction business. In 2000, as their business stabilized, they finally ventured into the hospital business. This was their dream since they lost their father to illness, and they aspired to provide first class medical care in India.

Lastly as a side story, Indians’ strong aptitude in Math is famous in Japan, as books such as ‘Indian way to do math’ became best sellers in Japan. I have to admit, I struggled with the valuation and pricing negotiation on this Project. Indians use ‘Lakh’ and ‘Crore’ in daily conversations, even with foreigners, and as I was not accustomed to this, I could barely keep up with the conversation let alone negotiate! Luckily my Australian colleague maneuvered Lakhs and Crores like an Indian so we were able to manage!

The following is the link to the Blog in Japanese written by Ms. Sachiho Nakayama, an Investment officer with the International Finance Corporation (IFC), A world Bank Group member.

http://wbproblog.sblo.jp/article/37940215.html

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IFC speaks on Rockland Hospital