THESE ARE EXCITING TIMES.

Injecting Growth The impending growth of healthcare infrastructure across the country has multifarious connotations for the electrical and lighting industry New healthcare facilities, like the Fortis Memorial Research Institute in Gurgaon, will likely be certified green spaces of the highest rating THESE ARE EXCITING TIMES. Medical tourism is booming and hospitals are aggressively pursuing expansion plans. They are seeking out energy-efficient and health enhancing solutions in lighting as well as other electrical products. Design and lighting play a major role in enhancing well-being and a healthy environment within healthcare establishments, be they hospitals, clinics or path labs. Further the aesthetics help them attract patients, especially the international ones. Setting up of new healthcare infrastructure will definitely boost sales of manufacturers of lighting, switchgear, cable, wiring accessories and related electrical equipment suppliers. As majors like Apollo and Fortis expand their network in tier II and tier III cities, their need for automated building management solutions that enable remote monitoring of functions like lighting, security, surveillance, plumbing, access, etc becomes all the more important. This provides yet another business opportunity for providers of innovative solutions customised for healthcare institutions. Current State According to a report by Business Monitor International (BMI), size of the Indian healthcare market was valued at $79 billion in 2012 and is expected to reach $160 billion by 2017. The healthcare sector is expected to grow at about 15% yearon-year (y-o-y). The hospital segment constitutes around 70% of the total healthcare industry, and is growing at a CAGR of 20%, as per Assocham. However, a CII Technopak report concedes that healthcare infrastructure in India is quite inadequate compared to global standards. As per Indian Hospital Services Market Outlook by RNCOS Industry Research Solutions, India needs to cover a cumulative deficit of around three million hospital beds to match the global average of three beds per 1,000 population. Fortis Healthcare (12,000 beds), Apollo Hospitals (7,946 beds), Manipal Group of Hospitals (4,400 beds), Aravind Eye Hospitals (3,649 beds), CARE Hospitals (1,912 beds) and Max Hospitals (1,800 beds) are the major private players operating in the Indian hospital industry. Medical Tourism A Renub Research report titled Asia Medical Tourism Analysis and Forecast to 2015 states, India was one of the first countries to recognise the potential of medical tourism. From 2009 to 2011, the number of medical tourists in India grew by 30%. It is estimated that by 2015, India will receive nearly half a million medical tourists annually. According to the report, the trio of Thailand, India and Singapore would control more than 80% market share in 2015. India Brand Equity Foundation (IBEF) 60 SEL July-August 2013

estimates that the medical tourism industry, growing at around 18%, would increase two-fold to $2 billion by 2015, from its current level of $1 billion. India has witnessed an influx of patients from Africa, CIS, Gulf and SAARC nations, who come with organ transplant, orthopedic, cardiac and oncology problems. The inflow of medical tourists has increased by 23%, with Chennai emerging as the favourite destination. The reasons attributed for the same are a higher concentration of super-specialty hospitals with better infrastructure and greater average bed size as compared to other zones. A study by CII further points out that the city attracts about 40% of the country s medical tourists. Business Models The Indian hospital industry operates on two popular business models, viz hub and spoke, and operating maintenance contracts. Under the hub and spoke model, a super specialty hospital (hub) is established in a major city of a region, with smaller multi-specialty hospitals or day care centers in neighbouring towns. Apollo Reach hospitals and Vasan eye care clinics operate on this model. In the second case, a corporate chain (like Fortis or Apollo) takes over the management control of a hospital owned by a trust. In return, the trust gets a fixed annual management fee or a share of the revenue. Growth Trends Bridging the Divide for a Healthy India, a report jointly published by Grant Thornton and CII, notes that north India is witnessing proliferation of specialty hospitals and healthcare centers. The report explains, Leveraging improved technology and infrastructure of medical institutions, northern India is witnessing a steady rise in medical tourism. A number of regions including Delhi-NCR, Chandigarh, Amritsar, Mohali and surrounding areas have been attracting patients from abroad. Major players viz Fortis, Apollo, Medanta and Metropolis have invested in the region. The report further pointed out, Eye care, dental care, maternity, pediatrics, orthopedic surgery, pathology, low-end imaging, etc are areas in which we expect to see significant New Healthcare Delivery Models Healthcare Cities One-stop shop which offers healthcare services including wellness, education and training. Due to large land requirement, these are often set-up in outskirts of a city. Attracting patients is a challenge. Nine health cities being planned in India at an investment of $2.3 billion (eg Medanta Medicity, Gurgaon). Day Care Surgery These are units that conduct procedures and patients are discharged on the same day and not hospitalised Helps hospital chains in freeing up capacity at tertiary hospitals while retaining patients within the network Require lower capex, making break-even periods shorter Senior Living Hospitals An institution where aged people can reside after their working life Offer medical facilities, options of entertainment such as libraries and TV rooms, and encourage members to live a healthy community life with regular exercise, meditation and healthy food (eg Max Venture s new initiative Antara in Dehradun) Mobile Healthcare Four wheeler unit comprising of paramedical staff and a trained doctor who address minor diseases and gives primary diagnosis Diagnostic as well as surgical mobile van, also prevalent in metros transaction activity in 2013 and beyond. Vikas Chhabra (vikas.chhabra@paras hospitals.com), general manager, sales & marketing at Paras Hospitals, Gurgaon echoed the same. He said, Northern region has shown a remarkable growth in terms of beds against number of patients. Dr Anil Gupta (sgehraipur1@gmail.com), director at Shree Ganesh Eye Hospital based at Raipur, Chattishgarh, said, Apart from the northern region, maximum growth is seen in mini-metros (tier II and tier III cities) like Lucknow, Kanpur, Nagpur, Raipur, Panchkula etc. Speaking at the CII Conference on Transforming Healthcare in Northern CHHABRA: Energy saving solutions are important for us Region: Agenda for Action, Dr A K Shiva Kumar, member, National Advisory Committee, Government of India, called for greater private participation to complement government s initiatives. He said, India has a huge population, and one single agency cannot transform the entire healthcare in the country. Public private partnership is the only way forward. Expansions Sanjay K Randhar, president of IndiaVenture Advisors Pvt Ltd, estimated the cost of setting up super-specialty units at `50 lakh to `1 crore per bed in tier-i cities. The cost would vary GUPTA: We seek technologies that increase patient comfort (Source: Dinodia Capital Advisors) SEL July-August 2013 61

Expansion Plans of Various Hospital Chains Organisation Investment Span Plan Apollo `2,250 crore Next 3 years Capacity addition in Chennai & Bengaluru, and Kolkata (200 beds) New hospital in Mumbai, Visakhapatnam and Indore New Reach Hospital' in Tiruchy (Tamil Nadu), Nellore (Andhra Pradesh) and Nasik (Maharashtra) Adding 1,500 beds in eastern & north-eastern India in next 5 years 4 new hospitals in Kolkata, Patna, Raipur, Guwahati Fortis Manipal Plans to raise `540 crore from IFC & World Bank Raising `540 crore from IVFA Next 3-5 years To start 4 hospitals including one in Himachal Pradesh Increase operational beds in tier-ii & III cities Add 850 beds over next 12 months Add 450 beds in newly built FMRI, Gurgaon, and 400 beds in greenfield hospitals in Ludhiana & Chennai Increase bed capacity in Bengaluru, Mangalore, Goa Establish greenfield multi-specialty hospitals in Pune, Hyderabad & Bhubaneswar by 2014 Wockhardt Hospitals -- Next 2 years Set up new 350 bed super-specialty hospital in South Mumbai, to be operational in next 2-3 months Establish new 300 bed super-specialty hospital in Delhi to be completed by 2015 QRG Healthcare `1,000 crore Next 5 years To reach a target of 1,200 beds in 5 years Focus mainly on north India, particularly cities in and around NCR along with Ludhiana, Agra, Jaipur, among others A 450-bed super-specialty facility in Faridabad, called QRG Health City, to be commissioned by September Healthspring `60 crore By end of 2014 Set up centres in Delhi, Hyderabad, Bengaluru Glocal Healthcare `400 crore In operation by 2014 Set up 50 new units across 6 states West Bengal, UP, Bihar, Chattishgarh, Jharkhand, Odisha All these units will mainly cater to tier-iii cities & rural areas Each hospital will have 100 beds built on 15,000 sft with G+6 structure Paras Hospitals -- Next 2 years New 100 bed hospital in Darbhanga (Bihar) A few more hospitals having over 500 beds are planned to be set up Rockland Hospitals Open 505-bed multi-specialty hospital in Manesar, Haryana Open 500-bed hospital in Greater Noida, UP Ganesh Eye Hospitals Government Super-specialty eye hospital in Raipur, Chattishgarh within 1 year Plans to open satellite hospitals in few more districts Establish 6 super-specialty tertiary care hospitals with research & education centres between `30 lakh and `50 lakh in tier-ii and tier-iii cities. What s in Store In addition to the materials that are used for electrical installations in buildings, almost all the healthcare chains are also looking for upgradation of technologies. At the recently concluded 2nd Annual Hospital Expansion Summit in New Delhi organised by Noppen, speakers deliberated upon how design, renovation and other technological applications including implementation of the digital touch can benefit hospitals. Speaking at the conference, Ravi Kumar Dhulipala, head strategic market at Ingersoll Rand India, explained the role of HVAC systems in reducing hospital infections. Citing examples of situation prevailing in the US, he said, One out of 22 patients coming to a hospital acquires secondary infection, with airborne infection affecting 9% of the population. ICUs contribute to more than half of the infections. With ICUs accounting for 65% of energy bills, energy-efficient HVAC systems can not only help reduce cost, but also reduce energy consumption of the hospital. In India, more and more hospital chains are concentrating on maintaining energy-efficiency and are shifting towards green building design. The newly built Fortis Memorial Research Institute (FMRI) in Gurgaon, at a cost of `480 crore, exemplifies the same. It has been recognised as a green building and has been awarded Four Star rating by TERI GRIHA. Optimisation of building design, use of low emissivity glass for the building envelope, deployment of solar energy for lighting and hot water, and use of highly energy-efficient fixtures and equipment managed centrally by a building management system, ensure energy conservation. Daljit Singh, president, Fortis Healthcare Ltd said, Right at inception, we took a conscious call to weave green building principles into the design of the FMRI project. Chabbra of Paras Hospital shared, We are also planning to implement building management systems very soon. These initiatives, besides helping hospital chains reduce cost, also build a brand. It is expected that soon all major players would be leading a drive towards energy-efficiency and green buildings. n Mrinmoy Dey 62 SEL July-August 2013

Innovative Products Product: Myrius anti-bacterial switch Category: Wiring accessories Manufacturer: Legrand (www.legrand.co.in) Made using Ag+ ions which destroy bacteria that comes in contact with the product s surface The silver ions attack all around the bacteria cell wall, thereby reacting with sodium ions in the bacteria and destroying it Approved by BTS (Biotech Testing Services) in India, COFRAC in France Aimed at hygiene-conscious industries pharma, agro & foods, labs, healthcare etc Product: Prestige 3D Antibac Blue Category: Cable management trunking, anti-bacterial Manufacturer: MK Electric, Honeywell (www.mkelectric.com) Uses a silver based additive inherent within the PVCu which acts as effective weapon in fighting bacteria such as MRSA and other harmful bacteria Unique patent-pending fluorescence under UV light, providing customer confidence 40% faster to install than any other u-pvc trunking Product: Over-voltage release MZ209 Category: Energy distribution protection device Manufacturer: Hager (www.hager.co.in) Monitors supply voltage between phase & neutral conductors Trips the associated circuit breaker (MCB, RCCB or RCBO) if voltage exceeds 280V for more than a millisecond Red colour flag to show tripping due to over-voltage Can be used in new as well as existing installation without any change in wiring Product: Luminaires hospital range Category: Lighting Manufacturer: Crompton Greaves (www.cgglobal.com) Luminaires customised with the required level of illumination Both CFL and LED based luminaries customised for different sections of hospitals ceilings, corridors, OTs, hospital beds and store rooms IP66, bottom openable clean room luminaires in 3x36W CFL version to cater to needs of high illuminance levels in OTs Lighting management system with dimming control & occupancy sensors Product: Integrated Facility System Category: Electrical distribution switchboard Manufacturer: Eaton (www.eaton.in) Integrates traditionally, separate electrical distribution and control equipment into a single space-saving, factory assembled, and connected package Offers reduced installation space, lower overall equipment costs, and significantly decreased installation time Permits control of all lighting, HVAC, and alarm systems with single on/off switch as well as complete enterprise-wide monitoring 64 SEL July-August 2013

Industry Perspective Lighting India being a centre for medical tourism, all private hospitals are gearing up to provide the best of facilities to their customers. Lighting gives first impression to the patients/clients and helps them take a decision to opt for treatment in that particular centre. Owners and decision makers are ready to spend on energy saving lighting technology. We have a wide range of lighting solutions customised for hospitals, eg CFL and LED-based modular luminaries for ceilings, downlights for diffused lighting in corridors and consulting rooms, luminaries for hospital bed lighting, and customised lighting for OTs, store rooms etc. Sarang Bodhankar, senior manager marketing, lighting division Crompton Greaves Ltd In addition to traditional and customised lighting products, major hospital chains are investing in energy saving LED-based lighting solutions especially for corridor lighting. With international patients visiting these hospitals, corridor and reception lighting matches that of high-end hotels. Nirupam Sahay, president, Philips Lighting India Healthcare industry is driven by 24/7 electricity usage and hospitals are the second largest energy consumers as well as producers of greenhouse gases. Now LEDs are the preferred lighting choice at hospitals across the world, and the changing scenario has helped hospitals lower their carbon footprint and energy bills by incorporating green designs. The most important areas for LED lighting are OTs, MRI rooms and CT scan rooms. There are special LED solutions for clean room applications and OTs, which are different from LED fixtures used for general lighting purposes. Arun Gupta, global CEO, NTL Lemnis Switchgear & Automation The expansion of hospitals provides ample opportunity for the switchgear industry. Besides regular switchgear and wiring accessories that go into building installation, we supply over voltage release devices which are particularly suitable for Indian hospitals. They protect valuable medical instrument from neutral floating. Building automation has not yet made a full-fledged entry into Indian hospitals. We have recently done some projects for Apollo, Jaypee Medical Centre and NBCC Hospitals. Praveen Nair, head sales & marketing, Hager India Many Indian healthcare facilities are dealing with ageing infrastructures that need to be modernised so as to meet new demands. Further, rapid expansion would increase demand of such products. Eaton s electrical solutions enable these facilities to meet modern expectations, as well as maintain a high standard of reliability, because healthcare facilities simply cannot afford interruptions in power. However, the penetration of lighting controls has remained low in Indian hospitals. Sushil Virmani, sales director, electrical sector, South Asia, Eaton Wiring Accessories There is always an inherent demand of advanced hygiene measures in the healthcare industry. This increases the scope for innovative products like Myrius anti-bacterial switches. The market for antibacterial switches in India is niche because it is still a new concept. As the awareness of this product grows, its penetration in the targeted group would also increase. It is expected to grow at a fast pace in the coming years. Sameer Saxena, VP-Marketing, Legrand India Engineering Plastics We see tremendous opportunity for EP in the medical segment both in medical diagnostic devices as well as for drapes and bacteria-resistant fabrics. We expect that awareness in the industry towards new solutions will further improve and new standards would be introduced. Sanjay Jain, business director of DSM India s engineering plastics division SEL July-August 2013 65