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MEDICAL EQUIPMENT
DARANA CHUDASRI
Respiratory equipment and sleep therapy products from new acquisition Respironics will give Philips a new revenue stream from home health care. |
Philips, one of the world's largest industrial conglomerates, sees huge potential for growth in Asia's medical technology market as the population ages over the coming decades.
In the view of Philips Healthcare CEO Steve Rusckowski, demographic change will inevitably expand the market, especially for home health care.
''In the West 15% of the population is elderly and this figure is expected to double within 25 years,'' he said. ''By 2050, about 50% of the population in developed countries will suffer from a chronic illness.''
A similar trend is now appearing in Asia. According to the Thailand Development Research Institute, 10% of the Thai population is currently 60 years or older. By 2027, the number of elderly people is expected to reach 16 million, or 20% of Thailand's population.
Philips, along with Siemens and General Electric, dominates the field for advanced medical technology and over recent years has invested more than 5 billion in acquisitions in the health-care sector. This includes a 3.6-billion deal in March to acquire Respironics, a leading supplier of respiratory equipment and sleep therapy products.
The home health-care market will be particularly important, as limitations in providers and human resources shift more of the burden for senior citizens to early detection, disease management and monitoring inside the home.
According to Philips, home health care is projected to generate sales of 1.5 billion this year, or around 15% of the company's total health-care business revenues. By 2010, home care is expected to rise to 20% of total revenues.
Growth in the segment is forecast to rise 6% to 8% per year over the next two years, with the market worth 22 billion worldwide by 2010. Currently, North America accounts for 55% of home health-care sales and service revenues, with emerging markets contributing 15% and other countries the rest.
''Philips is ready to take advantage of opportunities where they are available,'' Mr Rusckowski said, pointing to emerging Asian countries such as India and China as having particularly high potential, in addition to the already large Japanese market.
While in Thailand, home health care remains a relatively small market, growth prospects are strong as the population ages in line with global market trends.
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