Singapore O&G taps demand for quality confinement care to diversify business

Singapore

YOUNG mothers are now seeking more professional and higher quality postpartum confinement services - a trend that Singapore O&G (SOG) is hoping to capture as it dips its toes into the confinement care centre business.

In its first foray overseas, SOG had earlier announced that it will be establishing a confinement centre in Johor under a newly-formed joint venture. This will expand the firm's existing healthcare services and revenue streams, chief executive officer Eric Choo told The Business Times.

Going into the confinement care business has been a long time coming.

SOG already serves in the fields of obstetrics & gynaecology (O&G), paediatrics, dermatology and cancer-related treatments. Still, there was a gap to be plugged, said Mr Choo adding that the confinement care business will therefore enable SOG to offer a more holistic range of services

SOG will pump in RM1.96 million (S$673,883) for a 49 per cent stake and two board seats under a joint venture (JV) agreement with LYC Mother & Child Centre.

The confinement facility is expected to be near the Singapore-Malaysia border to serve residents from both nations, and more of such centres could be established in Malaysia under the agreement.

It is expected to commence operations with an initial capacity of 60 beds and can eventually be ramped up to 130 beds.

While the location of the centre has not been disclosed, Mr Choo told BT that the JV has already secured an 18-year lease agreement.

Under the agreement, the rental will increase by a small percentage every year but is capped at a certain number, making the rent manageable and cost-effective, he said.

Operating in Singapore, on the other hand, might be a pipe dream at the moment.

"We can't identify a low cost structure in Singapore presently," said Mr Choo, citing high rentals and manpower costs among reasons that will dampen profitability.

But the close proximity of the centre to Singapore might appeal to locals here.

The idea, said Mr Choo, is to make confinement periods feel like a getaway or a staycation. There will be activities conducted and amenities such as a swimming pool. Meanwhile, there are also plans to provide transport to chauffeur customers to and from the confinement centre.

It is a very exciting space to be in, particularly as more people seek confinement services outside of their homes, said Mr Choo.

In Singapore, the traditional practice would be to hire a confinement nanny. But with increasingly smaller homes these days, some people might not have the space to put up another person while others might prefer more privacy.

Aimed at providing accessible and affordable services, there will be different packages (inclusive of room stay and services) to choose from with prices beginning as low as RM15,000 - in line with the prices of hiring a confinement nanny in Singapore.

The partnership with LYC Mother & Child Centre, which already has a strong brand presence in Malaysia, will also allow the JV to get a slice of the growing pie there.

The company has been offering postpartum confinement care services since 2018, and operates three confinement centres in Klang Valley, Malaysia with a total capacity of 122 beds in Taman Tun Dr Ismail, Puchong and Bukit Jalil.

Given that this is SOG's first venture overseas, teaming up with a player that is already familiar with the business will help minimise risks and give them an edge over players who are small or new to the market, said Mr Choo.

Meanwhile, SOG will be able to contribute by offering its healthcare expertise for the confinement centre to take its services up a notch.

The JV comes just over a year after Mr Choo took over as CEO.

Having previously served as a financial controller and subsequently chief financial officer at SOG, Mr Choo was no stranger to the business and that had given him the foresight to look beyond the group for growth avenues.

There is no need to be very fixated on just managing the existing business as there are opportunities out there for the taking, he said.

That said, the group will still continue to grow its core businesses. SOG recently brought on a new colorectal surgeon as well as a breast and thyroid surgeon boost its cancer-related segment.

"With our core business in O&G, people think that we (SOG) are in a sunset industry due to the low birth rate in Singapore," said Mr Choo.

"But we are not, because delivering babies is only one of the healthcare services we offer and we complement that with other specialties to serve a broad range of our patients," said Mr Choo.