The fourth wave of growth has begun

Mehmet Ali Aydınlar is determined to make the Acıbadem Health Group (ASG) into a serious regional player. Today he has a 25 per cent share of ASG and a 5 per cent share of IHH. He says that, however much it may look as if he is losing his majority in ASG, the actual situation is different and that this partnership with IHH has left the management of the Middle East and the Balkans to him. Aydınlar’s agenda is headed by plans to expand in the region in particular. Aydınlar says that, in the first stage, they will invest in Russia and the Balkans. “Our target countries include Russia, Azerbaijan, Iraq, Libya, Egypt, Albania, Serbia, Kosovo and Romania,” he says. We spoke with Acıbadem Health Group Mehmet Ali Aydınlar about where he wants to take ASG.

Capital: Today your shareholding in the Acıbadem Health Group is down to 25 per cent. How does it make you feel to own 25 per cent of a company which you founded from nothing?
- Actually, one should look at it like this. I used to have a 50 per cent share of ASG. Itook 10 per cent of this in cash. I gave 15 per cent to the other side and took a share. With the remaining 25 per cent I became a shareholder in ASG. I have a 5 per cent share in the overall holding group Integrated Healthcare Holdings (IHH). There is a partnership there between Khazanah Nasional Berhad, which is a Malaysian government investment fund, Mitsui & Co and Mehmet Ali Aydınlar.

Capital: You are targeting expanding in the region... How will you move forward and what direction will you take in the region?
- We have a hospital in Macedonia. We have investment plans in the Balkans, the Middle East, North Africa and Russia. These will all be under the Acıbadem roof and be tied to us. The Acıbadem brand will continue to grow in this region.

Capital: So what are your targets? What will you achieve in terms of turnover and the number of hospitals?
- In 2010, the Acıbadem Health Group had revenue of TL 946 million and 9,566 employees. In 2011, the group’s revenues were TL 1.3 billion and the number of its employees stood at 11,354. We are aiming to increase our turnover by 30-35 per cent in 2012. We expect the number of our employees to be 13,000-13,500 by the end of the year. At the end of this year, the number of our hospitals will stand at 20, including acquisitions. In the last five years, we have doubled our turnover and the number of our employees. A similar growth can be expected over the next five years.

Capital: You are opening new hospitals... So, is there such a potential in Turkey?
- Demand is increasing every day. In 2009, our revenue from patients brought from abroad was $10 million. In 2011, we earned $60 million from patients brought from abroad. This year the figure will be over $100 million. If you consider that our turnover last year stood at TL 1.3 billion, then this means that this was a little over 10 per cent of our revenue.~

Capital: You are growing through mergers and acquisitions. Will this continue? Do you receive a lot of offers with people saying “Come and buy us”?
- Of course, we shall grow through acquisitions. We shall add new purchases. Yes, we receive a lot of offers like this. In fact, you need to divide private hospitals in Turkey into two categories. There are those which are really private hospitals. And then there are private state hospitals. These all work with the Social Security Institution (SGK). Our colleagues in this sector are having difficulty surviving. Indeed, I can say that they are breaking the rules. Because they need to survive and in order to survive they may be doing a number of things. As a result, there are a lot of hospitals for sale in this segment in particular. When we want to set up a new hospital, we either buy a hospital or we buy a medical center and we merge them and turn them into a hospital.

Capital: You have gone from being a neighborhood hospital to a national chain. What were the turning points for you?
- On 19 April 1993, I took over the management with a majority share. At the end of 1993, I decided to stay for the long-term. The most important thing I did was to invest all of the money I earned from the system back into the system. The first critical stage was the public offering in 2000. It gave us some significant advantages. When we saw that there was demand, we increased the proportion that was open to the public from 15 per cent to 36 per cent. We were always one of the top three companies in terms of earning the most for investors. In 2008, we formed a partnership with Abraaj Capital. They made a profit and left in January 2012. This time the cooperation was with a strategic partner. Consequently, we can talk of three critical stages: the 2000 public offering, the 2008 partnership with private venture capital and the 2012 strategic partnership.

Capital: Is the fourth stage growing in the region?
- Of course, this excites us. I am always travelling abroad. And I see this: in health, Turkey is far ahead of the other countries in its neighborhood. There has been a significant improvement in the health sector in Turkey since 2002. In the past, a person would only go to a doctor twice a year, but now we have reached the level of developed countries. In developed countries people go to see a doctor eight times a year, while in Turkey the rate is around 6-7 times. This is also because of the improvement in the sector.

Capital: Right from the beginning you have focused on just one area, on health. Will this continue?
- In fact, health is my main business and shall remain so. Apart from this, I have some personal investments. For example, Erman Erman Ilıcak, the head of Rönesans, and I have bought some land together and we shall construct an office block there. But this is something for which I have provided financing. My business is health.