What was the rationale behind the acquisition of Alpha X-ray Technologies and Meditronics?
There are a couple of reasons. Philips Healthcare has traditionally been strong in the high-end premium range of the market. We wanted to complement our product offering in India with products that are more value-priced and we wanted to do it inorganically. Today, we import a lot of products to India. In India, in the cardiovascular segment, for instance, the demand is very different than that of the West. It is for products with more basic functionality and that are value for money. For X-ray machines, about 20-22 per cent are imported, so if you do it locally, it is a great advantage. We are trying to capture that value. Over time these products will be marketed under the Philips brand. On the other hand, for the acquisition of Alpha in the cardiovascular market segment, the clear plan and ambition is also to export products from that company first to other emerging economies, and probably in the longer term to mature economies as well.
...What are the company’s expansion plans in India?
We have big ambitions. We are planning to increase our workforce to reach out to tier-II and tier-III cities in a bigger way, to step up marketing efforts and strengthen our customer support services. We have a clear game plan to grow our business in India considerably over the next two years, and we expect revenues for our healthcare business to reach 100 million euros beyond 2010.
...Are you looking at new acquisitions in India?
Yes, we are constantly looking at companies that could complement our portfolio.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at email@example.com