In line with its strategy to expand the company’s industrial footprint in India, Royal Philips Electronics recently announced commencement of operations at its first greenfield manufacturing facility for imaging systems in the country. Located in Chakan, near Pune, the Philips Development and Manufacturing Center will play an essential role in Philips’ commitment to locally develop and produce meaningful products and solutions that help improve access to healthcare for people in India and other growth geographies. Krishna Kumar, President, Philips Healthcare India shares Phillips vision for the facility and future plans with M Neelam Kachhap
What is the rationale for setting up of a greenfield manufacturing facility in India?
| Krishna Kumar |
The Philips Development and Manufacturing Centre (DMC) in Chakan has been set up to provide relevant healthcare solutions for India and other growth geographies. This facility is our seventh global centre of excellence and it will play an essential role in Philips’ commitment to locally develop and produce meaningful products and solutions that help improve access to healthcare. Let me give you a brief background on this. We conducted in-depth research to understand the on-the-ground requirements in India and worked closely with healthcare partners to gain better insight into their ‘Made in India’ needs. This research indicated that several factors, including low operating costs, energy-efficiency, easy serviceability and support for high patient volumes, are critical to increasing healthcare access in India and thereby improving patient outcomes. The Chakan facility will deliver this type of ‘designed for India’ products that are robust, reliable and can take maximum patient load. The key innovation challenge that we have been able to address is providing high quality care at affordable costs.
What was the total investment incurred on this facility and what are your revenue expectations from this facility?
It is a significant multi-million euro investment. As a company policy, we do not specify any growth/revenue forecasts. Let me reiterate that this is an extremely important long term investment for Philips. We are investing in India to manufacture quality healthcare products for a healthier India. The DMC at Chakan allows us to ramp up “In India For India”. This facility will deliver ‘Designed for India’ products, thus enabling healthcare providers in the country to provide care to those communities who did not have access to high-quality healthcare in the past. With this facility, Philips has reinforced and optimised its production capacity in diagnostic and interventional imaging solutions.
Which markets will this facility serve?
While this facility will chiefly serve India’s healthcare needs, it will also play a critical role in expanding the footprint of Philips in emerging markets as well. Many of the products and components developed in Pune can also serve the needs of mature markets looking to replace or upgrade entry-level diagnostic devices.
How will this set up change the market dynamics for Philips Healthcare’s existing market in India?
The plant at Chakan will operate as Philips Centre of manufacturing excellence for imaging systems. In growing markets like India, healthcare professionals demand features like durability, dealing with interrupted power supplies, limited radiology technician time per patient, fast and easy-to-read diagnostic output, and affordability. To share an example with you, India needs to address about 45-60 million heart patients every year, whereas with the existing facilities in the country, only two million of these patients get treated annually. So there is tremendous scope to provide entry level and value added diagnostic healthcare solutions for emerging markets that will swiftly address the needs of a large volume of patients.