Saudi German Hospital eyes ‘organic’ growth across the GCC, Egypt

Saudi German Hospitals (SGH) Group is focusing on organic growth across the Gulf Cooperation Council (GCC), Egypt, and even Asia, the company’s vice chairman and deputy president Makarem Batterjee told Argaam in an exclusive interview.

Middle East Healthcare Company (MEAHCO), which is listed on the Saudi Stock Exchange (Tadawul), was founded by the Batterjee family. The group owns and operates a network of hospitals under the Saudi German Hospital brand.

Given the regional success of the SGH brand, Batterjee said the group’s focus is to reinforce its position as a key player in the healthcare sector across in the Kingdom and neighboring areas.

“Beyond the GCC, we currently operate in Egypt with plans to expand our presence there and across North Africa as well as Asia,” the vice chairman said.

In addition to the five hospitals that the healthcare major operates throughout the Kingdom, it is also expanding to Dammam and Makkah in 2019 and 2020 respectively.

The 39,000-square meter Dammam healthcare facility, which is 66 percent complete, is slated for opening in June. It comprises eight operating rooms and has a potential capacity of up to 300 beds and 100 clinics.

While in the UAE, the company will open an $81.68 million healthcare facility in Ajman next month, and plans to develop another 100-bed specialty hospital in Ras Al Khaimah. It currently has one hospital operating in Dubai.

Read: Saudi German Hospital to open new facility in Ajman

Tackling Costs and Competition

While rising costs and expenditure is currently a key challenge across the healthcare industry as organizations seek to improve their healthcare services using new technologies, Batterjee said the financial performance of the group is stable, which reflected through its continued growth and expansion.

“Our continued growth has allowed us to maintain our aim of opening a new hospital every year,” he revealed.

However, the healthcare major reported a 46 percent year-on-year (YoY) drop in net profit after zakat and tax to SAR 172.2 million for the fiscal year 2018, due to lower revenue growth.

Read: Saudi German Hospital net profit falls 46% in 2018

That said, Batterjee is unnerved by the impending competition from foreign players, as Saudi Arabia is planning to allow foreign investors to take 100 percent ownership in the health sector.

But Makarem, who is the son of MEAHCO chairman, Sobhi Batterjee, said he has learned how to roll with the punches and develop new strategies from his father.

“While foreign investment is something we will have to deal with, it is important to remember that we are the largest healthcare provider with many decades of experience providing top quality healthcare across the Kingdom and MENA region, and we will continue to grow,” he said.

“So competition will not erase our ability or history in providing best in class patient care to the communities we have served and healed.”

Finding Talent

Meanwhile, Batterjee said finding and educating quality medical professionals is in high demand as populations grow, referring to reports that indicate a need for nearly 40,000 additional doctors in Saudi Arabia by 2030.

“Therefore, we are committed to enhancing medical education within the region, in line with Vision 2030. We provide top class medical education through our Batterjee Medical College focusing on medicine, nursing, pharma and dental. To date, 2,150 female and male students from the region have registered.”

SGH has launched an E4E (Education 4 Employment) program, sponsoring a cohort of 100 students, most of whom are Saudi women, who are encouraged to take up nursing profession.

But in Saudi Arabia’s healthcare sector, it’s not just doctors and nurses that are in high demand. The Kingdom also is on the lookout for highly talented administrative and executive staff that can support the sector’s growth and fill the gap for such talent in the industry. 

“That’s why we have also launched the Global Business School to provide advanced and innovative education for executives looking to advance their business and management skills,” Batterjee said.

Write to Parag Deulgaonkar at parag.d@argaamplus.com