A healthy joint venture

David Lindsay speaks to Simed International bv Managing Director Sietse Zoodsma and Area Manager Ferry Dubbers about its recently signed joint venture with medical equipment and services representatives Medea Ltd. The newly formed venture, named Simed International limited, will seek to further penetrate the Mediterranean and North African healthcare industry by using Malta as a strategic base

Last week another international company joined the ranks of companies that have formed Maltese alliances with a view to better penetrating the potentially lucrative North African market.

However, Simed International, which is teaming up with Maltese healthcare distributors Medea, is no stranger to the Maltese market and in fact, has submitted tenders for the Mater Dei hospital to the tune of EUR70 million – making it one of the most prominent and prospective suppliers for the new hospital.

Simed had already worked intensively with Medea – a grouping of Malta’s three largest suppliers of the healthcare industry comprising of Associated Equipment Limited, Pharma-Cos Limited, and Technoline Limited – in the preparation of the tender for both the medical and non-medical inventory for the new Mater Dei Hospital.

Simed Managing Director Sietse Zoodsma provides an overview of the joint venture "Simed International Ltd is a joint venture between the Simed healthcare Group and two Maltese enterprises: Medea Ltd, a co-operation of the three largest Maltese distributors of medical and scientific equipment and Alcom Enterprises ltd, the representative of Simed International bv in Malta.

"The establishment of Simed International Ltd is the result of a gradual process that started more than two years ago with Simed’s preparation for the tender for the medical equipment for the Mater Dei Hospital.

"In the summer of 2000, Simed International bv, through Alcom Enterprises, made the first contacts with the three companies that now make up Medea Ltd.

"Around the same time, these three companies started their first careful discussions to join forces in the preparation of the best possible equipment and service package that could be offered to integrators participating in the tender. The co-operation resulted in the establishment of Medea Ltd one year ago.

"Of all the bidders of the medical equipment tender, Simed was the first to appreciate the excellent relation the Medea partners had with the medical profession in Malta, their knowledge of the requirements needed and brand preferences, and their long track record as reliable service providers.

"We have made optimal use of their knowledge in the selection of equipment for the Mater Dei Hospital and ensured that every equipment item offered will receive optimal service backup and supply of consumables during its entire life span.

"During the hectic months in preparation of the bid, we have learned to appreciate the staff of Medea and Alcom Enterprises as very dedicated and competent. Evenings and weekends were sacrificed to compose the best possible configuration for every department. This positive experience has become the foundation on which Simed International Ltd will be built.

"However, Simed International Ltd was not just established for the Mater Dei Hospital project. In case the contract will be awarded to Simed, it will be implemented by Simed International bv with backup and after sales services provided by Medea Ltd. The activities of their mutual Maltese sister company, Simed International Ltd, would be mainly outside Malta – especially in the Mediterranean region.

"Over the past decades, Simed has established a strong position as a project integrator in the Southern Mediterranean region, with projects completed such as the medical faculty and hospital in Sirrt, the dental faculty and hospital in Benghazi and several clinics in Algeria etc.

"All these projects were implemented by Simed’s own competent engineers under circumstances that were sometimes far from optimal. Simed also made sure the installed equipment could receive proper after sales service by training operational and maintenance personnel and involving the manufacturer’s authorised distributors.

"Through Simed International Ltd, we will have access to a pool of highly skilled technicians for the implementation and after sales service for projects in the region. For instance, Malta’s geographical proximity and the easy access of its nationals to Libya are a big benefit for this market.

"With the United Nations embargo now lifted, investments have increased, not only in public and private healthcare, but also in the oil industry, which places frequent orders for the inventory of clinics, burn centres etc. We expect to announce the award of a contract to equip a private hospital any day now. The 1,200-bed Benghazi hospital is also expected to be tendered in the near future.

"With Simed International ltd we expect to be better prepared than ever.

"However, we are also looking for other markets in the Mediterranean and even the Middle East. In peak periods, which frequently occur, we will have access to the Medea staff for backup, even if this is required in the Far East.

"We hope and expect, that the specific contributions that Simed and Medea can give to this unique Dutch-Maltese co-operation will mutually reinforce each other and result in the acquisition and successful implementation of many prestigious projects in the region."

The Mater Dei project, Simed Area Manager Ferry Dubbers explains, has presented an opportunity for Medea that doesn’t come around often.

He explains, "This is a once in a lifetime opportunity for Medea. Their primary market is Malta and while they do get a certain amount of business from North Africa there will never be another local project on this scale again and as such, it is a very important project.

"Our tenders for the Mater Dei project are valued at approximately EUR70 million. But our main markets are in countries where they are restructuring their healthcare systems. The EU market is relatively dormant and projects like this in Malta simply do not happen on the continent as the whole infrastructure is already in place."

The experience triggered discussions between Simed and Medea to join forces for the development and implementation of further large healthcare projects in and outside Malta. The discussions have led to the conclusion of an agreement between Simed International (represented in Malta by Alcom Enterprises) and Medea Ltd to establish a Malta-based joint venture from where such activities could be further developed.

The geographic proximity of North African markets and the easy access of Maltese nationals to countries such as Libya is expected to make Medea the ideal partner for Simed International to support maintenance programs for healthcare projects.

But with the new Malta-based joint venture, Simed and Medea have their sites set on the North African market, which Simed is already active in to a certain extent. But these activities are expected to be augmented and enhanced through the newly-formed partnership with Medea.

According to Dubbers, "Simed as a company has traditionally been quite strong in the Middle East and North Africa. In Algeria, for example, we are working on several projects at the moment. We are also planning a contract for a 1,200 bed hospital project in Benghazi, which is very large considering the fact that the Mater Dei Hospital will hold some 850 beds.

"This means that you have to have reliable, knowledgeable back-up when we carry out projects world-wide, which number between 15 and 30 each year."

But not all of Simed’s contracts are the size of the tenders submitted for the Mater Dei Hospital and in fact range from the very large to the small. One large project being implemented by Simed is the restructuring of several hospitals in Romania in a single contract worth some USD85 million.

Dubbers adds "Projects crop up all at the sme time which we can usually cope with, with our own staff, but we need back-up support is crucial when our capacity is full.

"We found Medea’s staff to be extremely competent, they have easy access to North Africa and our engineers know Malta quite well from the past as whenever we had a project in Libya, they would stop here for one or two days and then carry on to Libya."

With the new joint venture, Simed aims to have permanent access to Medea’s technical staff to support its activities.

As a result of its experience with healthcare projects in the region, Simed International is a leading contender for the contract to equip the 1,200-bed Benghazi Hospital on turnkey basis. Simed’s activities will include procurement, logistics and installation of the medical and non-medical inventory, commission and training of the medical and technical staff as well as the execution of long-term maintenance programs. The easy access of Maltese nationals to Libya and the short communication lines make Malta, in Simed’s opinion, an ideal base to approach the North African Markets.

A major share of the medical equipment would be supplied by Philips Medical Systems. This Dutch company has a long and active presence in Malta with an installed base that exceeds 80 per cent market share in imaging equipment and a similar position in North African markets. Simed International is the preferred integrator of Philips Medical Systems for projects world wide, including the Mater Dei Hospital. Philips Medical Systems has, like Simed International, positive experience with Medea Ltd to support their projects in and outside Malta. The synergy of the different partners, as well as the geographic proximity will enable the group to maximise their efficiency by using local services and expertise, which will guarantee the best quality of care for patients and healthcare providers.

Dubbers emphasises that Simed and Medea remain two independent companies, "If we win the [Mater Dei] contract here then we will co-operate but remain independent.

"We have founded other companies outside the Benelux region – in Germany and the United States – and this in Malta will be the third but, uniquely, will be the first not completely owned by Simed. We will have a minority share, Medea will have an equal minority share while a further 10 per cent will be held by Alcom enterprises – our representatives in Malta – so there is a Maltese majority.

"Simed and Medea are not competing with each other, We are 90 per cent complementary with only a small overlap. Rather than competing with each other, we have to consolidate our relationship and move forward in the market. After the embargoes are lifted, there are enormous opportunities in the Libyan market from hospitals to clinics. Then there are other countries such as Tunisia which will also figure greatly into the equation. Malta is in the right location to capitalise on these markets, as an EU member or not.

"Simed is a much stronger market player with the help of Medea, while Medea will have access to a lot more projects with the help of Simed. Having said that, this is a mutually reinforcing co-operation."