What have been the main achievements of GulfDrug over the past year?
We have had some good results, and business has picked up since last year's major growth in retail pharmacies. Many hospitals are being built, or undergoing expansions, as the government has been investing more in infrastructure. GulfDrug has been able to sync up with these positive developments. Being in the healthcare sector, we always have to be able to service the current and growing needs of the economy.
How has GulfDrug's portfolio evolved in line with last year's growth?
One of the major portfolios that we have streamlined with GulfDrug over the past two years has been imaging; we sell CT scanners, MRIs, and ultrasound machines from Toshiba. We have been able to place these within many private and public hospital projects. We work with a company called Carestream, which is the former Kodak, that provides larger solutions for clients to meet imaging requirements. We have expanded our portfolio for disposable and invasive products, and we have launched new products in the gastro and IVF segment. In addition to pharmaceuticals, many cutting-edge oncology products from Pfizer have come out, and major pharmaceutical players are developing more niche products for the harder-to-treat diseases.
How important is innovation for a company like GulfDrug?
Innovation comes from new and better products. In terms of distribution, it is important to be able to smoothly introduce these and upgrade products. With the CRM module and other tools we introduced in 2013, we can better track our interactions with customers. Considering our expanding portfolio, this is important for each product. We value internal innovation in regard to tools and technologies and managing new challenges with our current products.
How has the introduction of compulsory health insurance impacted your operations?
It was an important missing piece of the puzzle to offering sustainable healthcare services in the UAE. Prior to this development, only a small percentage of people had access to the best hospitals and medicines. People were moving from the Emirate to seek healthcare elsewhere, and as such, the UAE was losing economic productivity. More of the middle class, the driving engine of the economy, are now covered. As a result of the new system, healthcare business volumes have grown, the long-term viability of hospitals has increased, and the sector has become more sustainable. We have seen growth in treatments and the utilization of pharmaceuticals, which has motivated the companies that own the hospitals to expand.
What potential does Dubai hold to become a world medical hub, and how can GulfDrug contribute to this goal?
As is usually the case in Dubai, or the UAE, the issue is not one of building construction or creating the infrastructure. The challenge will be to attract high-quality doctors. When it comes to sophisticated medical treatment, patients will go where the quality doctors are. Work volumes for doctors have increased with the new insurance system, giving them more reason to be here; thus the number of medical tourists coming to Dubai will grow. With this in mind, and with governmental support, Dubai can become a hub; everything indicates that we are moving in this direction. The investment environment has improved dramatically over the past two years, and hospitals are competing on price and quality. On our part, GulfDrug has continued to provide a solid portfolio in many segments; hence, we stand to benefit from an upsurge in the sector by servicing in specialized areas, such as gastro, dialysis, and intensive care. We are also filling needs in terms of imaging and hospital equipment.
How would you evaluate your financial performance for 2014, and what are your expectations for 2015?
In terms of volume, growth has been recorded in the double digits. There is a high level of financial confidence in this sector because payments are reliable. Insurance guarantees payments to hospitals, thus hospitals are able to pay the suppliers and their doctors. The government has been continually reducing the margins for distributors and reducing the prices of medications. Hence, the drive of the UAE is to standardize and continue reducing prices, which presents a challenge for providers as costs increase. We have managed our growth carefully.