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QA: Vijay Simha, Chief Strategy Officer, BPL Ltd

Source : BUSINESS_STANDARD
Last Updated: Thu, Mar 17, 2011 19:51 hrs

After its exit from consumer electronics segment, BPL Ltd has been steadily building on the healthcare business, which has a topline of Rs 100 crore, and is expected to grow at 20 per cent annually. In an interview with Raghuvir Badrinath, BPL Ltds Chief Strategy Officer Vijay Simha details the way ahead. Edited excerpts:

The healthcare business has been, to a large extent, resilient and making steady progress. How do you intend to grow this?
The healthcare business has been with BPL for the last 40 years. It was just that the earlier mainstay, consumer electronics, was so huge that the healthcare business was not noticed. Now, healthcare accounts for more than 95 per cent of the companys revenues. Our focus is primary healthcare and emergency care, with portable devices like portable ECG machines and cardiac care equipment. This market is growing at 15-18 per cent yearly and we have a good platform to grow our business at 20 per cent.

We are looking at touching Rs 400 crore in this business in the next four to five years, given the huge untapped potential of this market. The primary healthcare segment has to function effectively to take the load off the large hospitals and we are empowering the doctors in the frontline with tools to diagnose better. We have a pact with US-based Welch Allyn, a manufacturer of medical diagnostic devices, cardiac defibrillators, patient monitoring systems and miniature precision lamps. We are expanding the scope of pact with them from being a master distributor in India to joint product development and will go on to manufacture equipment in India over a period of time.

We are progressing from a products company to a solutions company and if a general physician wants to set up a clinic, we can move in with a complete set to solutions needed for such a unit.

But the healthcare equipment market has large players like GE, Siemens, Philips. How do you intend to square up to them?
These players are strong in the large corporate hospital segment and they are actively building up resources in the portables segment. L&T, with its medical equipment business is another player which has presence in this segment. The Indian healthcare market is pretty huge and there is space for other players. The National Rural Health Mission envisages an outlay of around Rs 22,000 crore over a period of time and it is here where there is immense need to equip doctors with cost-effective solutions. People in rural areas do not mind spending money for quality healthcare and it is high time we focus our resources on this.

For the past four to five years, BPL has been restructuring its business and working with debtors to settle a host of aspects. There is some market talk that the relationship with Deutsche Bank, your primary lender, is strained and BPL is under pressure to settle the debt. What is the status?
Deutsche Bank, which consolidated all our debt from various lenders, understands our restructuring plans and are patient. It has been three years since they consolidated the debt, which is around Rs 400 crore. We should be able to settle all aspects with them by end of 2011 and the discussions are progressing pretty well. When a company goes through a restructuring process, there will be discussions on various aspects and one should not rush to conclusions.

How do you intend to settle the debt when the company's topline is around Rs 100 crore?
BPL Ltd has vast land bank of close to 400 acres and this will be the major instrument through which we will be settling the debt. During the past couple of years, the land prices had fallen and are appreciating now. We have received interesting offers from various players and negotiations are on to finalise a plan of monetising some land banks and some through joint development. All these are going through the final stages of getting the best price for the assets and Deutsche Bank is in the loop.

BPL is also trying to be in power generation, smart home systems and few other areas. What is the status on these businesses?
The thermal power project in Andhra Pradesh is on course and we are working towards a financial closure. Smart home solutions is another aspect on which there is progress and we are studying various facets on how we can grow this segment. In addition to this we are exploring renewable energy and also smart grid technologies.




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