Chennai-based medical technology company Trivitron Medical Systems, which recently offloaded an unspecified minority stake to HSBC Private Equity and venture capital firm ePlanet Ventures for $ 11 million, is planning to expand in a big way with a medical technology park, and acquiring domestic firms with a view to modernising them.
The Rs 200-crore company, which draws it revenues largely from trading activities at the moment, wants to scale up its fledgling capabilities in manufacturing and hopes to earn 50 per cent of its revenues from manufacturing by 2010-11, GSK Velu, managing director, Trivitron, told Hindustan Times.
Velu said the funds from the stake sale would be utilised for acquisitions, manufacturing joint ventures and to develop infrastructure for the proposed medical technology park in Chennai at an estimated initial Phase I expense of Rs 250 crore (around $60 million).
Rs 175 crore would go to joint ventures to develop infrastructure and the remainder for acquiring domestic firms and modernising them, he added. The company is eyeing a turnover of over Rs 1,000 crore in three years.
"We will raise the additional funds required through debt restructuring, internal accruals and from our joint ventures," Velu said, adding that Ernst & Young has been appointed as consultant for the project.
The size of Indian medical technology market is an estimated $2.7 billion, of which imports make up 90 per cent, or around $2.4 billion, Velu said, adding that it was increasingly becoming important for India to set the record straight. The size of the Chinese medical technology market is around $12-13 billion, he said, primarily because China had a head start in manufacturing.
"The medical technology park would allow the country to take a first step towards becoming self-sufficient as a medical equipment manufacturing nation," he added.
Global medical equipment manufacturers have already begun setting up plants in India in a bid to tap the booming healthcare market. Companies such as Aloka and Humanity of Japan, and Starkey of the US, Japanese ophthalmic firm Hoya, Nova India of Brazil and Chinese company Mind Ray have all set up shop in India.