Sumitomo Acquires Local Clinic Operator in Malaysia

May 06, 2024 | News On Japan

TOKYO - Sumitomo Corporation is making a bold move into the healthcare business in Malaysia. They have acquired a local clinic operator with plans to expand its network to 100 facilities and transform it into a consolidated subsidiary. By 2026, the Japanese group aims to triple the number of facilities and enhance primary healthcare services.

Sumitomo Acquires Local Clinic Operator in Malaysia Expanding the clinics operated in Malaysia threefold (clinics acquired by Care Clinics Healthcare Services)

Sumitomo has made additional investments worth billions of yen in Care Clinics Health Care Services (CCHS), a major clinic chain, increasing its stake to over 50%. CCHS operates clinics primarily around Kuala Lumpur, serving over 2 million patients annually. Sumitomo initially invested in CCHS in 2020, holding a stake of over 20% until now. Sumitomo aims to leverage its expertise in location analysis and financial management from its subsidiary Tomod’s, a drug store chain in Japan, to support CCHS's growth.

Apart from expanding the number of facilities to 300 and gradually increasing 24-hour medical services, Sumitomo plans to grow its current billion-yen (US$7 million) revenue to up to ¥20 billion (US$130 million) by 2026.

As Malaysia grapples with an increase in lifestyle-related diseases alongside economic growth, healthcare expenditure per capita is on the rise. According to the World Health Organization (WHO), Malaysia's annual healthcare expenditure reached $487 per person in 2021, a 40% increase from 2011, surpassing the growth rate of per capita GDP.

Addressing the challenge of controlling healthcare costs, there is a growing need for systems like "Managed Care" to connect healthcare institutions, insurance companies, and patients to ensure appropriate medical care.

Sumitomo already owns SC Health Care, a subsidiary specializing in private medical insurance in Malaysia. They plan to enhance Managed Care services by integrating data from CCHS.

Japanese companies see vast opportunities in Southeast Asia's healthcare sector. Mitsui & Co. has also been developing Managed Care in Malaysia and Thailand through its investment in MyCare in 2021.

Source: Nikkei

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