Shalby to add 50 orthopaedic centres in 3-5 years

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Ahmedabad-based Shalby Hospitals, the healthcare chain known for joint replacement surgeries, said it will open 50 orthopaedic centres across India and abroad in the next three to five years through franchise agreements.

Shalby’s chairman and managing director Vikram Shah told ET in an interview that to ramp up the accessibility of orthopaedic services quickly, he has decided to take the asset-light route by establishing standalone Shalby Orthopaedics Centres of Excellence (SOCE).

The SOCE centres will have highly experienced and qualified specialists equipped with the latest high-definition arthroscopic systems to deliver state-of-the-art joint replacements with computer navigation technology.

Shalby provides branding, expertise, standard operating procedures and conducts quality audits.

The company has already opened centres in Ahmedabad and Udaipur, and has signed agreements to open three more in Gwalior, Lucknow and Kanpur.

“In America, there is a trend of orthopedic day care centres for joint replacement. You don’t require large facilities for this. We have 11 multi-specialty hospitals; it took us 10 years to build it. Now I have 15 years left of my work, so I want to go pan-India and pan-Asia,” Shah said. “I don’t want to invest in real estate… We can go out and start 10 units (centres) every couple of months across India.”

Shah said these units will be started very soon… “We are not investing in it, we do long-term contracts. It’s a revenue sharing model,” Shah said.

Shalby, with its network of 11 hospitals and more than 1,200 operational beds, has a 15% share in joint replacement surgeries in the organised segment.

In India, some 150,000 knee and 100,000 hip replacement surgeries are performed every year, growing at 10-12% on an annual basis. Over 50% of Shalbly’s revenue of Rs 660 crore in FY22 came from the orthopedic segment.

The number of such surgeries in India increased to over 250000 in 2021 from about 350 in 1994.

According to Shah, an aging population, poor lifestyle, and nuclear family units where mobility becomes much more critical, are pushing up joint replacement surgeries.

He said the disruption caused by Covid-19 in the last two years has pushed the pent-up demand for joint replacement surgeries in India.

“In the first wave it went down to 5% of our usual run rate of joint surgeries; second wave it was 50%; now it is 120-130%, as patients are queuing up for surgeries,” Shah said.

To be present across the value chain of joint replacement surgeries, Shalby entered into the orthopaedic implant business by acquiring the manufacturing assets from US-based Consensus Orthopedics for $11.45 million.

Consensus Orthopedics, now renamed as Shalby Consensus, has capacity to manufacture 100,000 implants, with several patents to its name.

“The government has restricted the price. A number of foreign companies have lost interest in doing business in India; three companies are there but not enough sizes are available, sets are not available,” Shah said. “At our volume, I don’t want anybody to take us for a ride. Secondly, Indian joints are different, Indian lifestyles are different, it was always there in our mind that we should have our own designs.”

Shah said, “In the coming years, we will be manufacturing in India, as we want to go worldwide. We are already selling in Japan and the US.”

He claimed that Consensus has zero product recall.

Shah said the company will be soon launching its knee implant in India, as it has got approval to import Consensus implants, which are expected to drive sales in FY23.