Innovation has become Trivitron’s key differentiator as it forges global relationships to put India on the medical technology map
The story of GSK Velu, founder and managing director of Trivitron Group of Companies, Chennai, reads like a Jeffrey Archer novel; one of grit and determination winning at the end of the day with just enough suspense left for a full-fledged sequel.
Soon after graduating from BITS Pilani in 1988, when he was just 19 years old, Velu joined a medical instrument distribution company called IMI. At 21, he became a partner in Allied Healthcare, turning entrepreneur at a young age. Then, after a stint as corporate manager in the US-based MNC Ciba Corning Diagnostics (which later became Chiron/Bayer), initially handling India and then moving on to manage South and South East Asia, he floated Trivitron in the year 1997, in a market dominated by the U.S. and European MNCs. “Trivitron started with the concept of generalists for specialists, showcasing the capabilities of single focus, small and medium sized companies in the medical technology space,” recollects Velu. The company established its reputation for its sales and service of medical technology products.
Since then, the company has come a long way and today, it is known for innovation and is expanding its reach through organic and inorganic means.
Retracing the growth
“In the year 1999, I bought a 50 per cent stake in a single, stand-alone pathology lab called Metropolis owned by Dr. Sushil Shah based out of Mumbai. Using his technical expertise and my business network, corporate orientation and contacts from my 10 years of experience in the pathology industry in India, Metropolis expanded through inorganic roll up and hospital laboratory management concepts,” Velu recollects. Today, Metropolis is the second largest diagnostics chain in the country with over 200 pathology labs located in India, Sri Lanka, UAE and South Africa. Metropolis mainly grew through the inorganic acquisition route. Velu brought in most of his long time pathologist friends located in different cities of India into the Metropolis family; thus, establishing a decentralised structure with strong local management in each of the cities or regions. At present, Metropolis carries out over 4,000 varieties of investigations and acts as referral lab for over 1,00,000 doctors and over 10,000 hospitals/ laboratories across India. “I ran Metropolis as the CEO and MD until July 2010 and now we have an executive management team to run the day-to-day affairs of the company,” he explains. Ameera Shah, Dr Shah’s daughter, was elevated to the post of CEO and managing director from the year 2010 and Dr Shah and Velu have taken strategic roles as chairman and vice-chairman respectively.
Unlike the MNCs where the product gets innovated and manufactured in the western world with little or no concern for costs, Trivitron wants to bring in innovations and concepts in this space to improve access and affordability
Another Trivitron group company, Medfort/Maxivision Eye Hospitals, was floated three years back as India’s first national chain focused on eyecare and diabetic verticals drawing from its cross referral strengths in a country with over 50 million diabetics. Medfort has raised its own capital and private equity of over Rs. 100 crore and replicates Metropolis’s business model of bringing individual doctors under one roof for better economies of scale, technology upgradation and wealth maximisation for the doctors. The venture already runs around 20 eyecare super speciality hospitals with a high technology focus in Hyderabad, Chennai, New Delhi, Vishakapatnam and Vijayawada.
Due to a long-standing and close relationship with Apollo Group of Hospitals, Trivitron has forged a joint venture to run stand-alone dialysis centres and dental clinics that leverage Apollo’s operational expertise and technology with the contact and network base of Trivitron. “The alliance today has over 75 dental clinics in the name of Apollo White SPA and five dialysis clinics and is fast expanding to become a 100 dental clinics and 20 dialysis clinics network soon,” adds Velu.
Building on strengths
At the core of Trivitron’s business is its manufacturing of medical technology products, sales and after sales support.
Having gained a reputation in the Indian market for its service Trivitron went on to build its brand in South-Asia, the Middle-East and Africa. The company’s experienced management team with an average age of 35 – many of whom have been with the company since its inception – started focusing on innovation, manufacturing and international operations as three pillar of its growth.
According to Velu, Trivitron is probably the only company in India to have survived the MNC domination in the country with its multi-product focus, comprehensive solutions offering best in class support which is equal to or better than MNCs. “Unlike the MNCs where the product gets innovated and manufactured in the western world with little or no concern for costs, Trivitron wants to bring in innovations and concepts in this space to improve access and affordability,” he points out. Being an emerging market brand, Trivitron aims to achieve this by combining local innovation, frugal engineering, partnership with MNCs and local acquisition strategies.
Trivitron has opened up an Innovation Centre at IIT Madras in strategic partnerships with several academic institutions and scientists to look at innovative product concepts in the areas of in vitro diagnostics, cardiology, imaging sciences, critical care and ophthalmology. The company is in the process of acquiring a majority stake in some Indian/European medical technology companies with strong innovation and manufacturing skills. It has already forged many manufacturing joint ventures with leaders such as Hitachi Aloka Japan Ultrasound/ColorDopplers, Biosystems Spain Diagnostics Reagents, Johnson Medical Sweden Modular OTs and Diasorin Italy. The factories are in construction at Trivitron Medical Technology Park, Chennai.
Over the past two years, Trivitron has acquired Labsystems Diagnostics Group of companies in Finland, Kiran Medical Systems, Mumbai, Imaging Products Corporation, Mumbai, Star Trivitron in UAE and Vision Mediaid in Pune to expand manufacturing operations, own IPs/patent and expand its global presence. Through these acquisitions, Trivitron now has presence in over 160 countries and is now a world leader in product categories such as new born screening systems, celiac diagnostics kits and radiation protection apparels. Fidelity Growth Partners and India Value Fund invested in two rounds to the tune of US $75 million and US $24.5 million, respectively, in 2012 and 2013, to fund the growth of the company. Currently, Trivitron has eight manufacturing plants across Chennai, Mumbai, Pune and Helsenki (Finland).
“Though the government of India has refused to even recognise medical technology as a core industry within healthcare, we strongly believe India can be a viable alternative to China in medical technology innovation and manufacturing,” asserts Velu. In the absence of clear direction and fiscal incentives for import substitution, MNCs have shown little or no interest in bringing substantial investments to India, preferring to sell China-made products.“We do hope that at some point the government will understand the intricacies of this industry and make this import independent and export oriented like the pharmaceutical industry,” he says. Trivitron wants to be the torch bearer of the indigenisation and local innovation/manufacturing initiatives in the medical technology space. “We, as the largest medical technology company of Indian origin, feel this will do a world of good to Indian citizens in terms of cost, access, local validation and clinical trials,” he adds.
In the next 10 years, most of the products in the medical technology space are likely to be manufactured in China or India or any other emerging market, giving Indian manufacturers an advantage in emerging marketsto be brand leaders while promoting affordable healthcare.
The group, with revenues currently in excess of Rs. 500 crore, aims to grow to over Rs. 1,000 crore by 2015, with more than two thirds of its revenue coming from manufacturing, services and international operations. Trivitron’s vision is to think out of the box to make the most innovative medical technology products affordable to a larger section of population in the emerging markets with a particular focus on India, South Asia, Middle East and Africa
Scaling up its innovation and manufacturing operations through organic and inorganic means
Trivitron’s Innovation Center in IIT-Madras will focus on R&D in in-vitro diagnostics, cardiology, imaging sciences, critical care and ophthalmology
Set to acquire majority stake in some Indian/European medical technology companies with strong innovation and manufacturing skills
Recently signed up several manufacturing JVs and constructing factories at Trivitron Medical Technology Park, Chennai
Set to expand manufacturing operations, own IPs/Patent and strengthen its global presenceGSK Velu Healthcare Metropolis Pharmaceuticals Trivitron Group of Companies