Northern states in India are leading in volumes of refurbished equipment sales

By : Raelene Kambli
Posted on: Wednesday, August 14, 2013

Northern states in India are leading in volumes of refurbished equipment sales
In an interaction with Raelene Kambli, Ratish Nair, CEO, SANRAD Medical System speaks about the opportunities and challenges associated with the business of refurbished medical equipment and gives an update on the sector's progress in India

How does the refurbished equipment market operate? What is the size of the refurbished medical equipment market in India?
A large part of Indian population does not have access to quality healthcare due to very high costs. The healthcare service providers view refurbished medical equipment as an alternative to new equipment. The demand for refurbished medical equipment is increasing in India, as the healthcare service providers are focusing on Indian rural markets. Coupled with cost sensitivity, the demand for refurbished medical equipment is growing rapidly. The refurbished equipment market operates similar to other new equipment business, except for the fact that the business is concentrated more in the tier II-III towns/cities. Presently, the refurbished market is approximately 20 per cent of the overall equipment sold and almost 30 per cent of the sales in the private sector.

What are the major driving factors for the growth of the refurbished medical equipment market in India? Which refurbished medical products have a huge demand in India?

Lower cost of refurbished equipment and increasing occurrence of diseases are the major drivers for the growth of refurbished imaging equipment. It aids small and medium healthcare institutions to provide advanced treatment at lower rates.

Refurbished equipment gives an opportunity for the customers to purchase latest technology products for their clinic or hospital. Refurbished medical imaging equipment is likely to be the most viable and affordable alternative to otherwise expensive high-end equipment. In case of individual, corporate or private healthcare institutions, it is necessary to control the budget for new and latest medical equipment and they in turn purchase refurbished equipment which benefits the economy, increases patient satisfaction, reduces electronic and toxic waste and improves overall healthcare quality throughout the world. Buying refurbished equipment can save you sometimes over 40 per cent of what you would normally pay for brand new equipment.

It allows you to own top brand equipment at a low price. It also provides same performance level as that of new equipment and comes with full warranty. It is always best to purchase used and refurbished medical equipment from a reputed vendor, who will ensure that the medical equipment you buy are fully refurbished and tested under Original Equipment Manufacturer (OEM) specifications. For continued growth of refurbished equipment in the Indian market, it is very essential for a refurbished equipment supplier to have complete knowhow of the product and good infrastructure to support the maintenance and repairs of the equipment. The demand for refurbished equipment are mainly in the high value segment viz. CT scanners, MRI scanners, cath labs., etc.

Can you name a few cities where the demand for refurbished medical equipment is high?

The demand for refurbished medical equipment are more in developing states, specifically in states where infrastructure and healthcare facilities are growing fast. An approximate zone wise assessment indicate that the northern states in India are leading in volumes of refurbished equipment sales.

What are the opportunities and challenges associated with the business of manufacturing and selling refurbished equipment in India?

Some cringe at the very mention of used or pre-owned. Whether it's in the eyes of the buyer or the seller, the patient or the healthcare provider, there is often a negative association connected to these terms. Whatever we may call it, ‘remanufactured, reconditioned, re assembled refurbished, pre-owned’, plainly speaking it comes under one class 'second hand' or ‘used' equipment.

Sometimes the customer reaction is justified. There are certainly instances where refurbished equipment will fail every other day or may not meet quality standards. Also, there will be some 'fly by night' operators, in any business for that matter, who will 'join the game' just for profit, causing suffering and loss to customers as well as patients. Just a few of these types can do severe damage to reputations of genuine vendors in the refurbished medical equipment business.

It may be very difficult for some hospitals to equip themselves with the latest medical devices, but they still want to be the best possible healthcare providers. Their reputation and standing in the medical community depends on these factors. However, they simply are not able to afford the newest state-of-the-art medical equipment like CT scanners, MRI scanner or any other equipment necessary to perform their basic functions. In such circumstances, refurbished medical equipment supplied by genuine vendors are good alternates for most of them.

If good quality refurbishment processes can be created with the active support of the manufacturing company, then refurbishing equipment in India will definitely give a tremendous boost to the business as costs can be greatly reduced as compared to refurbishing at facility abroad. To start a good quality refurbishing facility in India it is essential to have the involvement of the parent company manufacturing these goods, and that practically seems to be difficult presently. Moreover the present tax rates are much higher for manufacturers as compared to direct imports.

What is SANRAD’s market share within the refurbished equipment sector?

SANRAD is the pioneer in the refurbished equipment sectors, and has a major share of the market due to its technical skills, excellent after sales service and committment towards supplying good quality equipment.

SANRAD is not only a well-recognised brand for medical imaging equipment, but also has turned into a concept by itself. This concept embraces a range of customer support systems that have been designed for cost conscious customers in India for a market that is both technology oriented and demanding. Our reference customers are key growth initiators in our business. It is important for the customers to check with existing user of the same equipment about the vendor, equipment, spare parts, failures, service support etc. We do not sell old technology equipment that are used more than approximately five to six years.

SANRAD invests in extensive training, and development of knowledge driven manpower on all ranges of CT Scanner models including the newest versions. The lead engineers at SANRAD are trained at Japan.

SANRAD believes in customer relations, which is our core value, and we ensure that the equipment delivers the same output as a new one, we have the largest inventory of spare parts in the country and offer them ex-stock to our customers, wide network of service support. Our wide network of service offers fastest response time for customer support and is acclaimed as the best in the industry. The most important benefit that SANRAD offers its customer is a ‘First Service and Pay Later’ attitude that has been crucial for keeping the systems running at more than 98 per cent efficiency and saving many lives today.

As part of the SANRAD culture, our engineers and marketing professionals understand the customers requirements, cost and business pattern. Based on those factors we help the customer select an appropriate model of equipment to meet all their imaging requirements. This is one of reasons for our success and hence our customers are growing year on year.

As a reputed vendor we feel that its our moral responsibility to support the performance of our equipment and supply spare parts at least seven to eight years from installation and above all cater to the safety of the customers’ investment. This adds to our credibility within the industry. As a preferred service provider, SANRAD believes in building relations with the customers, and the key people belonging to medical fraternity, through trust, integrity and emphasis on quality.

Refurbished equipment vendors have few responsibilities to which they must adhere. Can you name a few parameters that you consider while designing refurbished medical equipment at SANRAD?

Due to complex nature of the equipment, the after sales support, quality of the product provided by the vendors directly impacts the reliability. Most important parameters being considered by SANRAD are age of the systems, emphasis on latest technology of the equipment, upgradability of systems, ease of availability of spare parts, actual users review in terms of stability of product and Installation base in international market.

Indian customers demand latest technology equipment supported by proper technical service with and assured 95 per cent + uptime for equipment and this is the key to future business.

Where do you see this market in the next five years?

India is the biggest market in Asia for refurbished medical devices. M&M predicts Asia will be the most lucrative market for refurbished devices in the near future. India is one of the largest emerging medical equipment markets in the world. It is estimated to grow at a rate of 15 per cent with a Compounded Annual Growth Rate (CAGR) to exceed $4 billion by 2015. The increased need can be attributed towards growth in medical tourism, increase in health budget, rise in population associated with increase in lifestyle diseases and growing economy have led to stupendous demand for medical devices. As a country, we are cost conscious and still evolving strategies towards managing toxic wastes. Refurbished medical equipment allows for affordable machines without sacrifice of quality. More and more customers are using refurbished equipment just like a new equipment.