IFC set for $60m investment in SE Asian medical player
The International Finance Corporation (IFC), the investment arm of the World Bank, has proposed a commitment of $60 million to IDS Medical Systems, a Hong Kong-based healthcare industry supplier for Southeast Asia.
According to a filing, the investment would support a broader $130 million growth project for the company, including expansion of existing operations and entry into new markets such as Cambodia and Myanmar. Additional backing will be provided by Fung Investments, a family investment vehicle associated with IDS’ majority owner The Fung Group.
Founded in 2011, IDS distributes medical equipment to healthcare institutions across developing Southeast Asia as well as Singapore, Hong Kong and Taiwan. Devices, technical components and consumables are sourced through major manufacturers including Philips and General Electric. Services include installation, training, warranty and maintenance support.
The investment will attempt to meet growing demand for affordable healthcare services in Asia by reducing IDS’ supply chain costs. This effort will include adopting best practices from industries with more mature logistics infrastructure and improving access to small hospitals away from major cities.
McKinsey & Company estimates that supply chain expenses represent 25% of pharmaceutical costs globally and more than 40% of medical device costs. It found supply chain improvements could increase profitability by 11% for pharmacies and 20% for hospitals and producers of medical supplies.
Recent healthcare sector activity by IFC in Asia includes a $68 million investment in Apollo Health and Lifestyle, a unit of India's largest hospital chain. It also joined SeaLink Capital Partners in a INR 1 billion ($15 million) commitment to Indian dialysis clinic operator NephroPlus.
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