Siemens' health unit to focus on smaller cities

JINGGANGSHAN, Jiangxi - China is expected to be the second-largest market in the world for Siemens Ltd's healthcare sector over the next two years, driven by the company's new five-year plan focusing on the development of basic medical care.

"During the next five years, Siemens' healthcare division will make great efforts to enter the medical care market in China's second- and third-tier cities and rural areas, in which our business growth will soon lift China to the division's second-largest market after the US," Wu Wenhui, sector cluster lead of North East Asia for the division, told China Daily.

Wu said by 2015, revenues from the basic healthcare business will account for more than half of Siemens Healthcare's total income in China.

China is currently the fourth-largest healthcare market for Siemens, and one-third of the sector's revenues come from the basic healthcare business, according to the company.

"To achieve the new target, Siemens Healthcare plans to strengthen its efforts to develop new products tailored to the rural market," Wu added.

In 2010, Siemens Healthcare introduced low-cost products in China. It will also develop new models of its X-ray machines, computed tomography units and ultrasound devices to meet the basic healthcare demand from community and rural hospitals over the next few years.

At present, 11 percent of Siemens Healthcare's income is devoted to research and development of new products.

Further, "Siemens Healthcare will increase its investment in China's rural areas where the development of healthcare requires more capital support," Wu said.

"Most county-level hospitals in China not only lack medical equipment but also require professional training in the use of equipment and treatment technologies, so we will try to become familiar with the basic healthcare market as much as possible and provide what it needs," Wu said.

On Saturday, Siemens Healthcare donated equipment worth 1.9 million yuan ($293,930) to the Jinggangshan Traditional Chinese Medicine Hospital, which is the first stage of the "Siemens Healthy China" plan that aims to improve medical skills in China's rural areas.

"Siemens will bring healthcare equipment and medical techniques to the People's Liberation Army's Long March areas like Jinggangshan, most of which are still undeveloped," Wu said.

Wu said Siemens has spotted business opportunities in the basic healthcare field, as the Chinese government plans to improve rural medical care during the 12th Five-Year Plan (2011-2015) period.

The basic healthcare sector is growing 16 percent year-on-year at present. Wu said the company's business growth in the basic healthcare field will be double that of the overall market.