Tell us about the medical devices industry in India and Trivitron’s role in the space. 

Medical Devices are one of the top 4 pillars of the health care industry along with medical education, health services and pharmaceuticals. But the other three have grown a little bit over the years as compared to technologies and devices in this sector and it has been left behind. This is mainly because we are still 80 per cent import dependent. Though ‘Make in India’ has been talked about since a couple of years but has made a very small impact. The industry for medical devices in this country suffers from lack of scale. For example, in the year 1991 and 1992 China applied the carrot and stick strategy to bring multinational companies to start producing over there. This is how technology started breeding and today their domestic medical devices companies cater to over 80 per cent of the country’s needs as well as become the largest exporters of medical devices in the world. In India however, there is a deficit of trust between public and private enterprises to come together and decide the road ahead like their contributions for pharmaceuticals 20-30 years back. If we need to improve healthcare facilities in rural areas, it is crucial that devices like ultrasound machines, x-ray machines, inter scope equipment and basic lab equipment are provided to medical centres at a lower or affordable price. The Ayushmaan Bharat scheme needs to sustain and for that I feel the acquisition cost must come down and not just the transaction cost for medical devices. We must make domestic industries feel vibrant rather than dependent on multinationals in India. We have been a trading company from 1997 to 2010 and we moved into manufacturing seven years ago and currently we have 10 factories located in Chennai, Mumbai, Pune, Helsinki and Ankara. We have grown from a Rs 350-400 crore company to a Rs 700 crore entity today and 90 per cent of our profits come from manufacturing.  If all the companies like Boston Scientific, Fresenius Medical Care, Nihon Kohden, Amilton, etc. had trading associations with us, we would be a Rs 3,000 crore company today. We can improve the profile of the medical devices industry by providing scale to domestic companies. 

What are Trivitron’s most successful line-up of products with respect to medical technology? 

Among the top five products is the Newborn Screening Reagent Kit, which is produced in three of our factories in Finland, Turkey and India. We rank second in the world in newborn screening devices where a heel prick drop is taken from a baby and you can do anywhere between five to 50 tests. This project is really close to our hearts. We have a lot of value products apart from X-Ray equipment, mammography equipment, radiation protection apparel and X-ray accessories which we produce in our Mumbai factory. In our Chennai factory, we produce ultrasound machines in a joint venture with Hitachi, along with diagnostic reagents and equipment. We also make dialysis machines for intensive care units and OTs. We have a lineup of around 500 products at Trivitron out of which 200 are manufactured by us across five different segments including Imaging, Clinical Laboratory Diagnosis, Intensive Care, Operating Room and Renal Dialysis. For us the best market for new-born screening is China followed by Latin America and Europe. Under the radiation protection category, Kiran Medical Systems is one of the top five brands in the world having markets in the US, Europe and Japan. We want to be global leaders in the field of new-born screening and radiation protection. Our third most important products, known as Basic Value Products, are present in all parts of the world. Our other sweet spot offerings are value products for emerging markets like Africa, the Middle East, Latin America and SE Asia. These are the markets where we sell our x-ray equipment, c-arm equipment and ultra sound equipment which is manufactured in India. Our exports have significantly increased. Two-thirds of our profits come from exports and one-third from imports. 

 How is the management maintaining the core value of the company and focusing on achieving the goals set out by Trivitron? 

Everything we do at Trivitron and other business verticals is followed by a philosophy, access and affordability. We always ensure that we provide a healthcare model which is not luxury based. We also focus on developing markets to enhance the biggest area for us that is value products. With our new born screening placed at world’s second rank and fifth in radiation technology, our focus is also to spread out and enter every market. Our core philosophy is, ‘Provide access to people who don’t have it at an affordable price’. Our goals are now set for making a difference in markets like Africa, Middle East, South East Asia, Latin America and India.

What are the challenges in the medical devices industry in India? How do you wish to address these issues? 

I believe that preferential access is not given to organisations in the field of medical technologies. There are basic issues as well like inverse duty structure where the Customs Office do not even consider basic manufacturing needs. 

The central government is looking in a myopic way and they don’t think the country needs it. However, a common consensus where everyone from the ecosystem need to come up with a solution where they are not import dependent is the need of the hour. The Finance Ministry says that these issues must be addressed by the health administration and the Health Ministry says that they are only responsible for control of quality and regulation and therefore cannot spread their roots further into medical technologies and manufacturing. Even the pharmaceuticals industry cannot be helpful because they do not have the knowledge of equipment like CT and MRI Scanner. The medical devices industry is an orphan without anyone coowning this entire sector in the right manner. Hence, there must be a combined approach where all the stakeholders along with private entrepreneurs, representatives from healthcare and medical technology need to take a stand administrative decisions benefiting each and every person belonging to this sector. A company like Trivitron with Rs 650 crore turnover is still considered an SME and we have not even moved to the large corporate sector of the medical device industry whereas companies like GE Healthcare, Phillips, Siemens and Roche are multi-billion dollar companies and are able to control this market more efficiently than us. The government needs to address these issues by first identifying the local manufacturers and traders and support associations that stand for production of medical devices and technologies in India. 

How How effective do you find the Medical Device Rules 2018 to be and what are your views on this policy? 

I think a combined group should be formed through a strong association to address challenges in the medical device industry. Prime Minister Narendra Modi has shown interest in the manufacture of technologies in the country. No leader in the world would say that an important industry like ours should be 85 per cent dependent on imports. We need to act more smartly and efficiently to make an impact. Today, the medical device industry is worth Rs 40,000 crore and in the next five years it will rise to Rs 2 lakh crore with 85-90 per cent import. Countries like China find this sector as a good breeding ground for producing the best of technologies with government backing. We have to somehow find a way to address the multinationals and tell them to produce in India particularly for the benefit of domestic entrepreneurs. 

What are Trivitron’s expansion plans in India and overseas? 

We have a three-fold strategy to expand in the markets we are present in. At the top of our business pyramid are products and offerings in newborn screening and radiation protection. In the middle are our value segments like laboratories, xray products, c-arm and mammography. As the third component of our strategy, we have targeted India and Africa as two places where we want to be known as the largest medtech company, doing everything from manufacturing to distribution. We also partner with other multinational companies to provide full-range products. In India we can provide almost 80 per cent of equipment to a single hospital at a time. Similarly, we want to approach and cater to the market in Africa as there is demand in Africa. We feel that we are yet to see growth in the third category.  

 How would you compare the taxation laws in India with other markets? Is it easier for a local med-tech company to conduct business outside India? 

Every country has its own issues but when we are exporting our goods to other countries, we have our own complications. However, we seem to have more disadvantages in India compared to other places. There are hardly any areas where companies like us have an advantage in our own country. At Trivitron, we do import and sell because it is easier compared to manufacturing and selling. We don’t get any manufacturing, GST, access or even subsidy benefits. In China, manufacturing companies are given free rental spaces for five years, all overseen by the government. These are the kind of benefits we are looking forward to be competitive in the international markets. Development of infrastructure for the healthcare sector is a priority. However, for the medical devices industry the priority is to become import independent.  

Who are Trivitron’s key competitors in the medical devices market today? What makes Trivitron different from its competitors? 

There are a few Indian competitors in the market today for Trivitron, but we are the only surviving multiproduct, multi-segment, Indian-origin medical technology company. Companies like Transasia Bio-medical, Allengers, Meril Life Sciences are competitors for us only in one segment. But if we include big multinational companies like GE, Siemens, Phillips, Roche Healthcare and other multi-billion dollar organisations, they are the real competition for all of us. The top five companies of Indian origin account for just 10 per cent out of the Rs 40,000 crore market. We have 80 per cent market share in new-born screening because it is a niche market. But in the medical devices segment including ultrasound protection, x-ray etc., we have a 10-15 per cent market share. In this industry what makes us different is the fact that we are obsessed with our customer and strive towards meeting their requirements. At the end of the day, we only exist because of our customers. Today, with our own manufacturing plants we are able to meet more of our customer’s demands. If a customer demands a feature to be added to the device during the purchase, we are able to match their demands and have them legally certified. Our tagline ‘Speaking Your Language’ has been our motto for the past 20 years which is interpreted as speaking the language of the customer.

Where would we see Trivitron in the next five years? How do you plan to sustain the brand with changing times? 

Today, we have Rs 650-700 crore revenue and within a couple of years that should rise to Rs 1,200 crore. We would also like to list the company and become the largest Indian medical devices company in terms of range of products, infrastructure and revenues too. These targets, if achieved, would help us publicly list the company. In five years from now, we would like to be a multi-billion-dollar company of Indian origin. In future, we will also look forward to acquisitions based on technological developments in Europe and India. As of today Trivitron is debt free and we wish to make some key investments in core areas like imaging and diagnostics. We also believe that the biggest growth for us in times ahead will come from Africa where we feel we are ahead of the curve. The Investment Fund for Healthcare in Africa and IFC Washington are backing us with our projects in the continent.