Hospital Industry Indonesia Attractive, Plenty of Growth Potential
The hospital sector of Indonesia is promising. Therefore, several investors are eager to expand into the nation's hospital business. For example, the Mayapada Group will add five hospitals to its portfolio over the next 12 months. Another example is Mitra Keluarga Karyasehat that also plans to acquire a number of hospitals with a focus on the new market that is created under the central government's universal healthcare program.
Not only domestic investors are interested to expand in Indonesia's hospital industry. Also foreign investors have show interest. Malaysia-based Creador injected USD $45 million in Medikaloka Hermina, the operator of the Hermina Hospital Group. Despite the costly injection the Malaysian investor is not the majority shareholders (but the exact share ownership has not been revealed).
Cyril Noerhadi, Senior Managing Director at Creador, said there is a major lack of supply in Indonesia's hospital industry and therefore it harbors plenty of growth potential. In Indonesia there are only 12 hospital beds available per 1,000 people, while the global average is 30 hospital beds per 1,000 people. Considering Indonesians' purchasing power is strengthening, poverty is falling, awareness about health is rising, while the government is eager to enhance connectivity as well as universal healthcare, there is plenty room for long-term growth in Indonesia's hospital industry.
Meanwhile, Mitra Keluarga Karyasehat plans to acquire Rumah Kasih Indonesia, which owns seven hospitals that focus on patients that are treated under the government's universal healthcare program. The acquisition is expected to be concluded in October 2017.
Under the universal healthcare program (in Indonesian: Jaminan Kesehatan Nasional, or JKN), a program that is managed by BPJS Kesehatan, the Indonesian government targets to provide health insurance to all Indonesians by January 2019.
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