May 08, 2009
Exporting health to Africa
Mozambicans who travel hundreds of kilometres for medication and health care in SA may soon be able to save themselves the journey. And in other Southern African countries, too, residents can look forward to the prospect of better treatment. SA health-care groups are eyeing new investments in several regional countries.
One of the busiest is Lenmed Health, whose chairman, Prakash Devchand, talks of Mozambicans travelling across the border to buy Gaviscon, an antiheartburn medicine. Lenmed has teamed up with a Mozambican company, Invalco, to build a 110-bed hospital in the capital, Maputo. Elsewhere, Netcare is involved in a R1bn project to rebuild a 390-bed hospital in Lesotho.
Prakash Devchand - Not growing too fast
Southern African countries are keen to welcome SA investors. These include Angola and Zimbabwe, where there are signs of economic reconstruction. In Mauritius, the Hospital Association of SA has been invited to conduct what CEO Kurt Worrall-Clare says are "preliminary studies".
Lenmed’s Mozambican project is at an advanced stage. "We’re at rooftop level and on track to launch in October," Devchand says. In SA, Lenmed runs four hospitals (a capacity of nearly 450 beds) and has a stake in Pharmed, a drug wholesaler.
With Invalco and a European banker, Lenmed’s first cross-border project is the US$17m Hospital Privado de Maputo. Lenmed director Ahmed Nana says the hospital will include a 24-hour trauma unit and a five-bed intensive-care unit. Nana, who has spent the past few months shuttling between Johannesburg and the building site in Maputo, says it expects to admit 500-1 000 people each month.
This is just the beginning, says Devchand. Lenmed will eventually run four hospitals in Mozambique, which is home to 22m people. Its second project is a 50-bed hospital in Nampula, 1 500 km north of Maputo. Construction in Beira will commence next year. Then it’s off to remote Tete, which should also cater for Cahora Bassa and attract patients from Malawi and Tanzania, he says.
But could Lenmed be trying to do too much too quickly? The company is also sizing up opportunities in the Democratic Republic of Congo. "The Mozambican opportunity was dropped in our lap. We feel we’re ready but we’re not going to push it too quickly. We’ve done our homework," says Devchand. He adds that the Mozambican government "is behind us. It wants private health care there, because it will also contribute to skills development and job creation."
He adds that Lenmed has experience of Mozambican patient demand. "Our Lenasia branch gets patients from Mozambique. Some of them go to Nelspruit, others come to Johannesburg. There’s certainly good demand."
The skills shortage was expected to frustrate the project, but Nana is "pleasantly surprised" how many medical practitioners are keen to work at the Maputo hospital.
However, the number of nurses remains low. To this end, the Netherlands’ Fontys University will train locals. For now, Lenmed will consider importing nurses from other countries, says medical director Farouk Kaka, who has been with the group since inception in 1984.
Lenmed started out as a small hospital built with R2,5m in contributions from Lenasia’s community. It has grown into an operator that churned out R42m in post-tax profits in the 2009 financial year.
"In the old days, black doctors were not allowed to practise in white areas and black patients were barred from going to white hospitals, so it made sense for the community and doctors to build their own facility. Banks didn’t fund us so we went door-to-door in Lenasia to raise funds and invited business people to invest," Devchand says.
Lenmed’s footprint also covers Johannesburg and KwaZulu Natal, but it wants to become a national player.