While healthcare is currently not the strongest area for Siemens Mexico, it is indubitably growing strong since it represents an important segment of the company’s profits. Siemens Healthcare is planning to grow alongside the country, as the company is certain that this area will become a priority sector in Mexico.
Exclusive interview with Alejandro Paolini, Executive Vice President of Siemens Healthcare
Q: What is the role of Mexico in Siemens Healthcare’s global strategy?
A: Siemens Healthcare currently represents less than 20% of Siemens’ total revenue. However, the healthcare division remains an important business as the area represents a significant segment of the company’s profit and we generate a large portion of its cash flow. Healthcare is a profitable business and global trends indicate that the industry will continue growing in Mexico and worldwide. Mexico is by far our most relevant market in Latin America and presents great short- and medium-term potential. Excluding Brazil, Mexico is the largest market for us in Latin America, with Colombia in second place but not even making up half of Mexico’s size. On the global scale, Mexico is in tenth place among the second wave of emerging countries so it is appropriate to call this country a land of opportunity.
Q: What is your main focus within the healthcare division?
A: We provide medical devices mainly for diagnostics and for prevention and we are the only company that covers the whole spectrum for diagnostics, including two out of three methods of diagnosis. The first method, which focuses on the physical test from a physician, is a technique that is rarely used nowadays. The other two methods are much more popular: through imaging techniques or through clinical tests. Most companies cover either just imaging or laboratory, not both. Naturally, this means that we face different competitors such as GE and Philips for imaging, and Abbott and Roche in the laboratory segment. This coverage is an opportunity for us as the healthcare sector is continuously growing due to an aging global population. Usually, a person spends 60-70% of their total healthcare expenditure in the last 20 years of their lives. In contrast, Mexico’s health profile is starting to resemble that of other developed countries as communicable diseases are being replaced by chronic ones, such as obesity, cancer, diabetes, and cardiovascular diseases. As long as Mexico continues growing, the incidence of these diseases will only increase. However, one of the main challenges that Mexico must face is the fact that, while chronic diseases are clearly increasing, the public healthcare system still has to treat communicable diseases.
Q: Do you believe that healthcare is a priority for the Mexican government?
A: Healthcare has not been the government’s top priority for the last two years. In 2014, the medical devices market did not grow as expected for that very reason. At the time, the government was more concerned with the Energy and Tax Reforms. However, healthcare will eventually become a priority that can no longer be postponed. Mexico currently invests around 6% of its GDP on healthcare, which is low for the OECD. Taking into account Mexico’s infrastructure and population, the government should immediately increase investments to cover the current demand. The previous presidential administration implemented Seguro Popular, but there are still many gaps to be covered in terms of the number of available talents, infrastructure, medical equipment, and medicines. Siemens wants to cover those gaps in medical devices as it provides a complete portfolio for all medical devices needed in different markets. Siemens is widely recognized for its high-level innovative technologies but we do not only sell the latest equipment. For example, developing countries such as Mexico need equipment that is both affordable and good enough to cover the large demand. Siemens can offer advanced yet affordable solutions to fulfill this need. We are aware that resources are limited and the healthcare sector must look at every aspect before making a decision.
This post is an excerpt of Mexico Health Review 2015, to be released in September 2015. To pre-order your copy click here. Please direct all media enquiries to firstname.lastname@example.org.