Topics :

• L&T background

• Global market scenario

• Growth drivers

• Issues/Hurdles in export market

• L&T export strategies

Larsen & Toubro Limited :

• Founded 62 years ago, by two Danish engineers Mr. Henning Holck Larsen and late Mr.Soren Toubro

• Ranks among the top ten in India’s Private sector companies

• In 2000-01, the sales turnover of the company was approx.

• Rs. 80, 000 million ( 1.7 Bn US$)

• Is in multiple business areas. One of the principal business area of the Electrical & Electronics business group is Medical Electronics

L & T’s Medical Equipment Business :

• Started its Medical equipment business more than 10 years ago

• Excellent brand equity

• Profitable operations, growing at 31% CAGR (96-97 to 99-00)

• Sales turnover: Year ended 31-03-01: Rs. 520 million

• Expected for year ending 31-03-2002 : Rs. 600 million

• Expected cumulative installed base of medical equipment till 31-03-2001 is about Rs. 2600 million.

L & T’s Medical Product Portfolio :

• Ultrasound (B/W) scanner- Portable & trolley type

• Patient Monitoring systems 

  • Bedside (Single & Multi-parameter models) Monitors.

  • Central Nursing station.

• Electro-surgery (i.e. surgical diathermy) equipment.

• All products manufactured are from in-house R & D

Global Medical Equipment market :

• Current market is US$ 120 Bn.

  • 70% consumption in USA & Europe

• Market is dynamic in nature

• Competitive, cost sensitive & driven by technology

• Diverse in nature, comprising of wide range of products:

  • Medical equipment

  • Medical Consumables

Growth Drivers :

• Remunerative referral practice

• Preventive medicine concept spreading

• Surgical procedures commercialised & glamorised

• Improving health care standards

• Increase in reimbursement of health care expenses (Insurance sector opening)

• World bank funding

L&T: Corporate plan :

• "Convert L&T into an established Indian Multinational, by 06-07"- CEO’s vision

  • Major initiative- Thrust on export market development

  • Specific countries identified for focussed approach

  • Business and administrative capabilities geared up, to negotiate the challenges of international markets

  • Clear action plan & strategy for penetrating the market

• L&T MEDICAL:

  • A dedicated team formed

Issues/Hurdles :

• " Made in India"- A mental block

  • Branding Licensing

• Price-Volume game, hence

  • Marginal pricing to begin with

  • cost reduced to be profitable

• Entry barriers leading to long gestation periods

  • Use channels for the time being

• USA- FDA

Strategies :

• New product development

  • Ultrasound :

    • New models with convex probes launched

    • Colour dopplers also being launched

  • PMS :

    • Market appropriate models developed

  • Surgical Diathermies :

    • Automatic power controlled units developed

• Increased importance to aesthetics

Strategies :

• Quality accreditations:

  • CE-entire range is certified 

  • UL

  • FDA-work in progress

• Sales Promotion:

  • Participation in international exhibitions (Medica, RSNA etc.)

  • Advertisements in international journals (IHE etc...)

  • L&T Medical Website & Links

  • Roadshows

Strategies :

• Value Engineering

  • Design improvements

  • Sourcing cheaper alternative modules 

  • Increasing volumes

• SKD/CKD business opportunites

• Branding

• Contract manufacturing

• Participation in major tenders

Key achievements :

• Branding of patient monitors for a leading European manufacturer ( > 500 nos. p.a)

• World bank tender for supply of surgical diathermies

• SKD/CKD arrangement in Middle-East & South East Asia

• Contract manufacturing

• Breakthrough in China & Latin America

Award for Innovative Product/Service Design in Health care

The recommended route :

• International safety & performance standards (IEC 601.1)

• International quality certification for systems
  (EN-46001)

• Products: Acceptability (CE,UL,FDA…..)

• Initially, branding for foreign distributors

• Setting up marketing channels

• Eventually, selling under Indian brand names

International Sales (Cum.)