Thonburi Hospital is expanding its healthcare business in China, its main overseas market, after recently signing joint-venture agreements with two groups of Chinese investors to build five private hospitals. The total value of the projects is at least Bt20 billion.
"This expansion is a vital breakthrough for our group inChinasince our success in joining with state-owned hospitals after entering the market five years ago," group Chairman Dr Boon Vanasin.
He added that the healthcare business inChinawas very tough for foreigners, as there were many barriers.
Of the total project value, theThonburiHospitalgroup will invest about Bt6 billion, representing 30 per cent of the equity that it will hold in each joint venture.
He said the group and hospital-management firm WJ International Management Holistic (WJM) separately signed agreements with two groups of Chinese investors to manage their entire hospital chains - the United Force Group (UFG) and the American Pacific Group.
In addition, the group has also signed agreements for a 30-per-cent equity each in both ventures, said Boon.
For UFG, it plans to build three new hospitals with 300 beds each in three cities,Nanjing,SuzhouandWuxi. Investment value of each hospital is about US$150 million (Bt4.5 billion).
Under the management contract, theThonburiHospitalgroup will receive from UFG for 10 years an annual management fee of 2.5 per cent of gross operating revenue and 5.5 per cent of earnings before interest, tax and depreciation.
Meanwhile, American Pacific Group plans to build two new hospitals with 200 beds each inShanghaito cater to expatriate patients, who have high spending power.
Boon said the joint-venture partners would raise funds in both theUnited StatesandChina, "where major shareholders of those firms have good connections in the financial and property sectors. As forThonburiHospitalgroup, it will use its working capital".
He added that construction work on all five new hospitals would start this year and was expected to be completed in the next two years.
"As a matter of the fact, we have enteredChinawith the purpose of creating quality human resources such as doctors and nurse to supply the healthcare business around the world," Boon said.
Previously, the Thonburi Group joined hands withPekingUniversityfor the training of doctors and nurses, expecting about 1,000 trainees per year. In addition, the group was granted a contract from a military state-owned hospital chain inChinato operate a 100-bed international ward, for an investment of about Bt1 million per bed. It also won a contract from the Red Cross to design and plan the construction of a new hospital building with 100 beds. The building will be completed in the next 18 months. Under the contract, the management is included.
For domestic expansion, Boon said the group aimed at taking over existing hospitals with capital size of more than Bt2 billion. It is not interested in building any new hospitals, as supply exceeds demand. Hospital beds inThailandnow have an average 60-per-cent utilisation rate.
ThonburiHospitalgroup expects to see Bt4 billion in revenue this year, up 6-7 per cent from last year, of which Bt2.5 billion would be fromThonburiHospitalsolely and the rest would be from the other 17 hospitals under the group.
The group also expects its other income, mainly from management fees overseas, to reach Bt2 billion this year.