UAE hospitals operator also plans to expand in Saudi Arabia, deputy CEO says
United Arab Emirates-based hospital operator NMC Health plans to enter Qatar and Oman before year-end and expand in Saudi Arabia as low oil prices constrain governments' ability to provide healthcare, the company's deputy chief executive said.
Many industries in Gulf Arab countries, including construction and to a lesser extent banking, are going through tough times as shrunken oil and gas revenues force governments to cut spending and state investment.
But companies in essential services such as healthcare may actually benefit from the trend as they fill the gap left by governments. Rapid population growth in the region, and people's susceptibility to lifestyle diseases such as diabetes and obesity, may create further opportunities.
"We are preparing to enter Qatar and Oman by end of the year," Prasanth Manghat said in an interview at the Reuters Middle East Investment Summit.
"The penetration of private hospitals is low in these countries and governments are not spending on infrastructure," he said, adding that NMC was about to start construction of greenfield medical facilities in Qatar and Oman.
The London-listed company, with $200 million in cash plus $100 million in unused financing facilities, also plans to expand in Saudi Arabia through organic growth as well as acquisitions if opportunities arise, he said.
NMC entered Saudi Arabia in August, investing in a new hospital in the kingdom's western region and acquiring a majority stake in a hospital in the east, adding 260 beds to its total count.
"We can do a lot of expansion in long-term care provision, rehabilitation and specialty services such as fertility and geriatrics," Manghat said of Saudi Arabia.
NMC will also continue to grow in the UAE, its home market, by building new hospitals or acquiring existing ones, he added. said. Since it listed on London's stock market in 2012, the company has made eight acquisitions, four in the UAE, three in Europe and one in Saudi Arabia.
Billionaire Indian businessman B.R. Shetty, the chief executive of NMC Healthcare, came to the UAE in 1973 as a trained pharmacist and opened a medical centre which grew into NMC. Shetty holds a 25.6 percent stake in the company.
NMC has 1,135 beds around the world and accounts for 26 percent of the UAE's private healthcare beds. In the long term, "there's no limit on increasing our bed count" given opportunities in the Gulf, Manghat said.