India seems to be playing a crucial role in the effort of Philips, the Netherlands-based formerly entirely electronics and electricals company, for a global transformation to become a health and wellbeing company.
Health care generates 45 per cent of the company’s revenue. Philips recently announced Pune as global headquarters for its surgery business. Though the company does not give a further break-up, Ronald Tabaksblat, senior vice-president, Philips Healthcare, said surgery is a significant chunk of this segment.
“It is good to have an organisation in the emerging market, as it also brings dedicated focus to that market. The surgery business is a very mature one in the mature economies but a lot of work is happening in the emerging economies. The surgery business is a significant chunk of Philips’ health care division,” he said.
As part of the transformation, Philips changed the name of its health care division in Pune to Healthcare Innovation Centre (HIC) from its earlier Development Manufacturing Centre. For Philips, the Pune-based HIC is the only such centre worldwide. It does have an innovation campus in Banglaore but this caters to all its product ranges, across categories of health care, consumer lifestyle and lighting, and focusing more on the software and services aspect.
The company has been in India for 80-odd years and entered Pune with two acquisitions. It acquired Alpha X-ray Technologies and Meditronics, a manufacturer of cardiovascular X-ray solutions and general X-ray systems. Along with this, it acquired a manufacturing plant at Chakan, which makes health care products. With 400 employees, the Pune centre focuses on X-ray imaging, including diagnostic X-rays and interventional X-rays for surgery.
“Since then, we have merged these acquisitions and consolidated their activities. Our intention was always to manufacture products from here for global markets. The products that have been created here—we have developed four new X-ray systems—have global market presence,” said Tabaksblat.
In the past four years, the Pune HIC has launched four global products in the imaging category-- Allura FC, Allura Centron, BV Vectra and Primary Diagnost. The latter two are the latest releases from the unit. It has also successfully installed 100 systems in a dozen countries, including in West Europe.
Imaging or X-ray systems in the health care area has seen immense innovation over the years. The latest is in minimum invasive therapy of cardiac valves, which needs very precise guidance. “Doctors need very precise guiding technology. While manufacturing, we have to focus on quality and also make sure the products are cost-effective,” he added.
For Philips, the India market is important. Tabaksblat says as for every other company in the sector, it is the emerging market that is driving growth, “and true for us as well”. The health care business in India grew 25 per cent in the period ended March 31, 2013. The company increased its market share further during the period across all product categories and advanced to becoming the number one health care entity across the total addressable market.
“Societies—both mature and emerging economies--are confronting huge challenges in health care,” says Tabaksblat. “Mature economies have an aging population, with chronic disease but not enough staff to manage patients. We have all the advanced procedures and see a growing need in both mature and emerging economies for access to low-cost procedures, without compromising the quality.”
Adding: “We did not see India only as a low-cost region. The access to talent, especially in engineering, is huge.”
