Hind Latex plans first PSU hospital chain

Hindustan Latex Ltd (HLL), a leading contraceptive manufacturer, plans to set up 100 speciality hospitals and 700 franchises in the reproductive and child healthcare (RCH) segment across the country in the next three years.

This is the first time a major public sector company is entering the booming hospital business in the country.

While 30 hospitals, planned in Karnataka, Andhra Pradesh and Maharashtra, are to come under the brand 'Life Spring', the rest of the hospitals, being set up in Uttar Pradesh, will be promoted as 'Merigold' Hospitals.

The franchises, also in Uttar Pradesh, will be branded as "Merisilver", M Ayyappan, managing director of HLL, told Business Standard.

The company is set to announce a 50:50 joint venture with a leading US-based venture capital player to set up a standalone entity "Life Spring Hospitals Ltd" to promote its 'Life Spring' hospital business. Marigold and Marisilver will be promoted by Hindustan Latex Family Planning Promotion Trust with funds from the USAID and the UP government.

While the private players in the hospital chain business are targetting the urban centres, HLL plans to serve the rural segment with 20-25 bedded hospitals that provide affordable RCH services like deliveries, pre- and post-natal care.

"We are already running three "Life Spring" hospitals in Hyderabad, Kanpur and Agra. The success of this innovative model has prompted us to go for large scale expansions. We intend to transform ourselves from a contraceptive player to an integrated healthcare service provider in the next three years," Ayyappan said.

While 'Marigold' hospitals will replicate the 'Life Spring' model, 'Marisilver' will find HLL training private players to offer similar services for similar rates.

Interestingly, HLL is a major partner of the central government in its prestigious hospital modernisation programme called the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY).

The company is the project consultant to the PMSSY programmes in Bangalore, Trivandrum, Salem and Puducherry. HLL is also into equipment leasing business where high-end diagnostic equipment are installed and, if needed, managed by the company for the hospitals.

It should be noted that dozens of Indian corporate majors including Reliance, Ambuja, Apollo, Fortis, Wockhardt, Paras, Max and international hospital chains like Columbia Asia are in various phases of expanding their hospital chain businesses in the country.