Executive Talk, Episode 12: PSH Home X Healthcare, innovation beyond limits
Mr. Uten Lohachitpitaks, Group Chief Executive Officer of Pruksa Holding PCL (SET: PSH), explains his company’s vision to expand the ecosystem from property development to the healthcare business. With the combination of home, healthcare, and digital technology, PSH aims to improve the quality of life of Thai people.
1. PSH has penetrated the healthcare business in the past couple of years, whether the Vimut Hospital or the synergy with Theptarin Hospital. What is the purpose behind such a significant paradigm shift? How would the integration between property development and healthcare benefit customers?
I will start by explaining the philosophy of Pruksa as its foundation first. As you all know, Pruksa has been in business for over thirty years, and it is predominantly building affordable housing at an affordable price to most of the mass market. However, latest change over the last three to four years, the company has a new set of directions toward healthcare. And again, with the same mission and purpose, we wanted to build healthcare as a service and make it affordable to everyone. In society today, we all have been polarised by a high medical cost that is now on the back of rising costs and inflation. As a result, Healthcare treatment is harder to find and still expensive. That is where the position Vimut Hospital comes in, hoping we can offer high-quality medical treatment to the broader audience of the mass market.
2. What type of healthcare model can we expect? For example, has it been designed for common diseases, particular treatment, wellness centers, or elderly care? What are your specialties?
If you look at the healthcare value chain, it is actually very long, starting from preventive, acute treatment, rehabilitation, and end of life. Pruksa started Vimut as an acute treatment hospital. Within a whole vertical of this healthcare sector, I would say we were fortunate to have the opportunity to invest in Theptarin Hospital, which is very well established and long known for its expertise in diabetes treatment. That brought the latest medical science to Vimut Hospital, which benefits the broader customer base audience.
Now, from the ecosystem of what we are in today, Vimut serves as a hub hospital. So the strategy we are now embarking on is building the hospital as a hub surrounded by nursing homes and wellness centers. We aim to bring healthcare as close as possible to the residents where you can depend on a hospital for its specialties and acute treatment, but you can also access healthcare services right from home or near home. So over the next few years, we will be expanding a lot more between the hospital and the spoken concept of wellness centers surrounding the hospital. The latest one coming up will be opening in August. I think the company has built it since the middle of the late last year.
The other leg of the ecosystem we are now trying to do inside our business model is “reaching right to the home.” It means we are investing a lot inside digital healthcare, such as the “Tele-consult,” so that you can access the service through the mobile phone where we have a live and in-person coach to advise you; on how you should deal with diabetes, weight management or mental issues. So it is bridging individual treatment right from home to wherever you are. And if you need a wellness center, we have already built it near your home. Or if you need further treatments, you go to the hospital.
3. To what extent would the business revenue proportion change in the future? How much would healthcare and others contribute?
Between three to five years from now, we hope to see revenue from healthcare to the tune of three to four billion baht. That is about ten percent of what we are today. But obviously, this is at the stage of what we have built so far. We have not announced new sights. If you add on new expansions that we are embarking on, such as a new wellness center and acute hospital, and if you include the periphery of the new digital healthcare ecosystem, we are hoping to double the revenue. But that would take us more than five years.
4. In Q1/2022, PSH established a new Corporate Venture in pursuing digital innovation to strengthen the core business, real estate, and healthcare. Is there an innovative experience coming for Thai consumers this year? Also, within five years?
I would put it this way, for the corporate venture that we have set up. The primary mission of this business unit is to bring in technology and innovation of new business beyond the capabilities of what we are today, whether at Pruksa or Vimut Hospital. And the objectives that we are looking for from this corporate venture fund are;
(1) “Prop-tech,” anything that enhances living inside a residence or even constructing a home and lifestyle. These are concerning prop-tech.
(2) Healthcare, in relation to “Health-tech.” Again, we are talking about innovations beyond the ecosystem of Vimut today.
(3) Sustainability drive: As part of the corporate venture, we also look for investment and opportunities to help reduce our and our customer’s carbon footprint.
Regarding an entire investment so far, we have invested in a company called “Naluri,” a preventive healthcare service we want to bring to the Thai market. We have also recently invested in “Gut Microbes,” which has to do with the new science of treatment where people believe in gut microbes transplant, meaning that everything inside your body starts from your microbes inside the gut. So if you have a healthy gut, you have healthy health. Everything inside your body is related to the gut. It is a preventive science. So, basically, you moderate the food supplement that helps improve gut microbes. It improves many things. For example, if you have a sleeping issue, you can treat it with gut microbes.
Moreover, for the third objective mentioned above, we also have our investment made early this year for an Australian fund called “Taronga.” Ninety percent of the activity is all about sustainability. Such as reducing carbon footprint, meaning efficiency and improvement inside our workflow to reduce carbon footprint. So, we are now exploring with the company and trying to bring it to the Thai market. So, there should be many more projects coming next year where the services can be available in the Thai market. There are many digital platforms in the Thai market. However, when you talk about inside or unique verticals like the healthcare vertical where we talk about preventive inside the healthcare, there are not many service providers in the market today. And that is where we fill the gap.
5. What do you consider a significant challenge?
It is all about people. As I said, Pruksa has for thirty years established itself. It is only good at building a residence. Management at every level has done this inside out. They know it well. And I would say Pruksa is probably one of the largest and the best in its core – building affordable housing. So if you talk about Pruksa being innovative and daring to change the industry, this is the company. Pruksa also has been the first in Thailand to establish a “Manufacturing home,” which is why affordable housing can be made affordable.
However, we have now moved with the paradigm shift into healthcare, innovation, and digital technology. The mindset has changed. Capability needs to be improved too. Therefore, the priority for this year and the following year we are investing a lot in our people. The capability-building program we have established for the company is introducing things like design thinking, how to build an agile way of work, and introducing enterprise artificial intelligence. Enterprise AI is very new to the Thai market, not just Pruksa. I am bringing this to change how we work and move our people to higher value added. So, changing from doing laborer into a higher value-added itself is a challenge. You are changing the status quo. You have to be aware of the mental shift of the people and prepare them to be ready for the change.
This year, therefore, investing in our people is one of the priorities and is itself a challenge. And this change is not only for new business or healthcare. However, we are introducing change organization-wide. Hopefully, there will be new concepts for the new home we build. There will also be new services that we will leak into a home to the residents or customers. We will uplift the value of the residence, lifestyle, and quality. And we all believe in our new philosophy, “live well, stay well.”
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