IHH Annual Report 2018

A COMPLIMENTARY PRESENCE IN NORTH INDIA, PROVIDING IHH A STRONG PAN-INDIA PORTFOLIO ON A COMBINED BASIS SEIZING TRANSFORMATIONAL OPPORTUNITY India’s burgeoning healthcare market offers enormous growth potential for the Group. Fortis, India’s second largest hospital chain, has a strong presence in North India and complements our existing South India portfolio. By focusing on multi-specialty tertiary and quaternary care, this acquisition entrenches our leadership positioning in complex and innovative medical procedures and capitalises on our deep expertise in the areas of organ transplants, gastroenterology, cardiac sciences, orthopedics, mother and child health and oncology. SYNERGISTIC EXPANSION OF OUR INDIA PORTFOLIO The addition of Fortis to our stable marks a significant expansion of the Group’s capabilities in India, our fourth home market after Malaysia, Singapore and Turkey. The number of hospitals in our portfolio has increased from seven to 36, and beds from approximately 1,200 to 5,000. COMPLEMENTARY E I A G WING MARKET Of the total population of 1.2 billion in India, North India commands the largest market share at 30.5% and it is one of the fastest developing markets in terms of healthcare infrastructure. As of 2011, North India had 3.4 doctors per 10,000 people, in contrast to 11.6 doctors in South India. Beyond augmenting our existing portfolio with a presence in North India, the acquisition of Fortis strategically propels the Group to a strong leadership position in the pan-India market. ESTABLISHING A LAB POWERHOUSE India’s laboratory diagnostics market remains largely fragmented and growing. Fortis-owned SRL Diagnostics has tremendous potential in IHH’s vision for Fortis. We see strategic value in developing SRL Diagnostics as part of IHH ’s international diagnostic offerings. LEVERAGING OUR INTERNATIONAL AND LOCAL EXPERTISE IHH brings to the table decades of international private healthcare experience. The benefits we will bring together as a Group, including Fortis, will include cost rationalisation, implementing a strong corporate governance structure, optimising financial costs and exchanging best practices across our international footprint. TURNING OBSTACLES INTO OPPORTUNITIES This acquisition provides IHH with the mandate to partner and support Fortis to become a leading healthcare provider in India. Despite facing significant headwinds, including operational and financial issues. Fortis brings to the table a high-quality asset portfolio. IHH values the potential of Fortis and plans to turn these obstacles into opportunities for growth. 27 Strategic Report