UAE’s NMC Health eyes strong expansion in Saudi by 2020

United Arab Emirates-based NMC Health aims to increase its licensed bed capacity in Saudi Arabia to 1,000 over the next three years, as part of its aggressive expansion plans for the Kingdom, chief executive Prasanth Manghat told Argaam.

The healthcare provider currently has a capacity of over 1,000 beds in the UAE, and is targeting similar growth in neighboring Saudi Arabia, given factors such as a large population, demand-supply issues, and lifestyle disorders.

“There's a lot of fundamentals which makes it more attractive for investment. We already have by now 700 beds [in Saudi Arabia]. So it's not far to reach 1,000+ three years from now,” Manghat said.

NMC said last week that it had received regulatory approvals for a new long-term care facility in Jeddah.

The 220-bed medical center will be one of the first greenfield healthcare facilities established by a foreign company in Saudi Arabia. The facility initially started operations with 50 beds.

“By early 2019, we will be in a position to operate at around 90 percent capacity of the 220 beds,” Manghat said.

The firm also reached agreements to acquire multi-specialty hospitals in Najran and Hail for a total of $40 million, and plans to establish a 170-bed greenfield multi-specialty facility in Khobar, expected to be operational in H1 2019.

Construction on the Khobar hospital is expected to begin early next year, Manghat noted, declining to specify how much the project would cost.

Expansion strategy

NMC’s strategy for Saudi expansion involves investing in markets outside of Riyadh, Jeddah, and Khobar, which are already heavily sought after for private healthcare investments, the chief executive said.

The Abu Dhabi-based company also plans to offer more specialized services under the strategy.

“We'll look at home care, look at fertility, long-term care, or oncology, children's hospitals, pediatric care,” Manghat added, noting that many areas in the Kingdom are underserved in this regard – either in terms of physical capacity or technology available.

Home care, in particular, is a key area the company is looking at.

“We're a strong home health provider in the UAE today, so transferring knowledge like that to Saudi will be easy for us. It's not a very capex-intensive business. It's more of a knowledge-intensive business,” Manghat said.

“KSA is really underserved when it comes to acute care in home, so the ability to care for such patients at home will definitely free up a lot of space in the acute care beds in the market. There is already stress on the in-patient

capacity in Saudi Arabia,” he added.

In terms of plans for the wider GCC, NMC currently has three facilities in Oman and is looking at expanding its presence in the sultanate.

“You will see us very active in Oman. But if you really look at the size per se, Saudi Arabia is much larger,” he said.

The healthcare provider is keen to snap up opportunities from the Kingdom’s ongoing privatization of the health sector, part of broader reforms to diversify the Saudi economy.

“Privatization definitely will be a good initiative, and we will definitely look at opportunities. At this point of time there is nothing available, which is ready to go or something. But we are in discussions,” Manghat said.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com