VinaCapital Vietnam Opportunity Fund (VOF) has recently announced its investment of $ 26.7 million to own 30 percent of shares in Thu Cuc Medical and Beauty Care Joint Stock Company – owner of International General Hospital of the same name. In addition, a representative from VOF is also one of Board members of this Hospital.
For a broader perspective, Nhadautu.vn had an interview with Mrs. Nguyen Thu Cuc, Chairwoman of the Board of Thu Cuc Medical and Beauty Care Joint Stock Company.
WHY DID YOU DECIDE TO SELL SHARES TO VINACAPITAL?
Mrs. Nguyen Thu Cuc: Thu Cuc Medical Facilities are currently operating quite successfully with remarkable growth over the years. More and more patients from all the provinces, even from Ho Chi Minh City, Dak Lak and other remote localities, come to us. The first mission when Thu Cuc International Hospital was established was to bring high quality medical services to the Vietnamese people. This has been confirmed during the past years of the Hospital’s operation.
From 2015 onwards, as entering the second 5-year development phase, we embarked on our second mission of bringing and making the well-formed medical services closer and more accessible to many people. Since then, we draw up a strategy to develop a chain of medical facilities and satellite clinics throughout Hanoi and nationwide.
The next two years were in preparation, and by 2018, fundraising was underway for this development phase. Many investors showed their interest at that time, but VinaCapital was chosen because of its long-term experience in the medical field. It would be more favorable for us to make strategic decisions regarding this particular industry.
In fact, even without completing the fundraising process, we tripled the expansion of Thu Cuc International Hospital (at 286 Thuy Khue Street) and opened a new facility at 216 Tran Duy Hung Street in early 2019. All expansion projects are reaching or even exceeding the plan. Therefore, the cooperation with VOF is expected to help accelerate the intensive and extensive development of Thu Cuc Medical Facilities, thereby creating practical benefits for the community.
When running a business in the healthcare industry, I always desire to devote good values to society. Wherever health care develops, there are people with less difficulties. At least the patients could access good medical care services without having to travel far and wide.
WHAT ARE YOUR EXPECTATIONS FOR VINACAPITAL’S CONTRIBUTION?
Mrs. Nguyen Thu Cuc: First of all, I would like to clarify the current operational structure of Thu Cuc. VinaCapital has invested in Thu Cuc Medical Facilities, including Thu Cuc International Hospital and Thu Cuc International Clinic, and new facilities to be established in the future under the strategy of opening a chain of facilities.
Thu Cuc International Hospital, now referred to as TCI, only operates within the scope of medical examination and treatment, and no longer operates in beauty care industry. Instead, the beauty care services have been separated and operated by an independent company, Thu Cuc Beauty Joint Stock Company, which includes plastic surgery hospitals, plastic surgery clinics, and high-tech dermatology clinics.
The reception of VinaCapital’s investment in the healthcare sector helps bring a valuable source of capital. In addition, VinaCapital’s experience of investment in healthcare industry would be of great help in the coming stage of rapid development. Our goal is to lead the private medical market.
Moreover, through the appraisal process as well as the financial cooperation in the coming time, the transparency in the Hospital’s governance system would be even more apparent.
With the capital contribution equivalent to 30% of the shares, VinaCapital has a seat in the Board of Directors. However, VinaCapital would not run the company’s permanent operations, but assume its role in managing important, strategic and orientation activities such as financial statement approval, financial review and business strategy development or extraordinary non-planned investments.
THE COMPANIES THAT RAISE CAPITAL ABROAD ARE OFTEN UNDER A LOT OF PRESSURE ON SALES TARGETS AS WELL AS PROFITS, WHAT WOULD YOU DO TO MEET THEIR EXPECTATIONS IN THIS DEAL?
Ms. Nguyen Thu Cuc: Unlike a startup calling for investment, Thu Cuc International Hospital (TCI) has been operating for nearly 10 years, we have got achievements, a clear development strategy and stable profits. Even before, when we haven’t called for foreign investment, we still set KPI targets for each year and always met the targets.
In addition, when evaluating TCI before the investment decision, VOF has got the picture of actual revenue, cost, profits of TCI. Everything is real, not just expectation.
We have made plans and agreements to achieve new business targets in the near future. However, the increase in revenue and profit will be based on scale growth and the enhancement of high-tech and intensive technical services. We will definitely prioritize service quality over profitability.
WHAT IS YOUR PLAN FOR THE CAPITAL WITHDRAL OF VINACAPITAL IN THE FUTURE?
Ms. Nguyen Thu Cuc: The investment strategies of an investment fund may vary from time to time. At this time, TCI and VOF choose to cooperate with each other, but it is normal to change partners at another time. And of course, both VOF and TCI have plans for any changes.
WHAT DO YOU THINK ABOUT THE POTENTIALS FOR PRIVATE HEALTH SECTOR IN VIETNAM NOWADAYS? ESPECIALLY FOR THE BEAUTY CARE INDUSTRY?
Ms. Nguyen Thu Cuc: In my opinion, the potential for private health sector in Vietnam is still very big. As a country with the population of nearly 100 million people with increasing incomes and intellectual standard, the needs for high quality and well-served health care services is increasing. And that is certainly the inevitable trend as the society develops.
However, the current healthcare system has not yet fully met the needs of the people in the new era. According to statistics, each year about 2 billion USD flows abroad in the healthcare sector. Meanwhile, the resources of our domestic heatlthcare sector are enormous. There are many good professors and doctors. They continue to contribute even after retirement. In addition, we also have a lot of talented young doctors in the country as well as those studying from abroad and then come back to the contry for working.
It can be said that our human resoures are not inferior to the world at all. What we need is the investment to give those talents a chance to develop. We desire to create more and more opportunities for medical staff who have studied very hard to have a better working environment to contribute to the society, positively changing the face of Vietnamese private healthcare to become an effective and effective “extension arm” linked to the public health system, bringing good medical services to all people and at the same time prevent brain drain and foreign currency bleeding in the medical field abroad.
Beauty care industry is still a potential market. Our former company has been separated and Thu Cuc Beauty Joint Stock Company is not related to TCI, it is 100% private ownership without foreign investment.