Community, Diaspora and Immigration
TLG Capital investment in Snapper Hill Clinic, in Liberia gives hope to Monrovians
TLG has just celebrated a very successful year of investing in Africa and India, particularly in the health sector. You are now laying the foundations to invest in a medical centre in Liberia. How have you come to know about this particular project?
We first encountered this opportunity during a conference we were invited to speak at in the US earlier in 2010. We were approached by Mr. Sirleaf, the owner of the Snapper Hill Clinic, located in Monrovia, Liberia.
When you were considering the possibility of investing in this project, did you think that Liberia, with its recent challenging past, would pose particular hurdles, and how were you prepared to overcome them?
The Liberian landscape has changed over the past four years and its worst days from the civil war are behind it. The country has taken on a new direction, implemented political, economic and social reforms. President Ellen Johnson-Sirleaf, the first African female President, enjoys strong and vocal support from the Liberians, the international community and the United Nations. Over the past few years, there has been an increasing inflow of FDIs from investors (BHP Billiton, ArcelorMittal, Firestone, etc.), mainly in the country’s natural resources.
The medical clinic is the only private clinic to have survived Liberia’s civil war. The main challenge to overcome from our end was the need for investment in new medical equipment. We have been in discussion with several suppliers to provide us with the equipment needed for the clinic.
What were the particular points that made you decide that this investment was very worthwhile pursuing?
There are only a handful of clinics in Liberia and one public hospital in the capital. Other than basic diagnostics, the local population has often got to travel abroad for specialized care and medicine. The opportunity in the sector does exist and there is scope for growth. The clinic has a strong reputation for good service, a motivated management team and staff and it enjoys healthy margins. Our view is to invest and help the clinic enhance some of its operations and purchase new equipment in order to increase patient inflow and become the local reference for private healthcare in Liberia.
How do you envisage the project to impact the service users and the local community long- and short term? Are you for example introducing new services to this facility? Can you also give us a list of what the clinic is offering now?
The project will enable the local population to have access to more medical services, which we take for granted in the developed world, but unfortunately are not easily or commonly available in Liberia.
The first phase of our investment will replace old laboratory testing and medical diagnostics equipment and an X-ray machine, as well as buy the first few stocks of fresh drugs to treat patients suffering from diseases.
For our second phase investment, we are looking to introduce pre-natal and neo-natal care. UNICEF has found that for every 100,000 births, 1200 mothers die. For every 1,000 children born in Liberia, 145 won’t reach the age of 5.
The clinic currently offers medical consultations, lab tests (blood, urine, malaria, typhoid, etc.) and the sale of medical drugs.
Is your aim, ultimately, to ensure the viability of the project in terms of self-sustainability and adequate supply of drugs and qualified staff without external financial input? How do you see this happening?
Yes, our goal is to see the clinic become self-sustainable. The use of proceeds will be for a mix of capital expenditures and working capital requirements. We expect the investment and the added services to increase patient inflow and hence revenues. We will also look to help the clinic develop and deepens its banking relationship in Liberia for its future financial needs.
Do you envisage at the beginning, to draft in qualified staff from other countries? And if so, will you make provision for local staff to get further training, either on site or maybe outside of the country?
The clinic already has qualified medical staff. It has doctors who graduated at the top of their medical school in Liberia. One of them is currently on leave to complete her certification in International Health Organisation in the Netherlands. She has been working at the clinic for several years. Staff isn’t the problem the clinic is looking to address, rather it is the medical equipment. We have been approached by some suppliers and NGOs that have offered to provide technical assistance and training to the staff on the use of new equipment.
How will you ensure that the staff employed at the clinic will want to remain there, as the levels of pay for medical staff are so much more attractive abroad?
The staff is very dedicated and enjoys good benefits. As it is in the case with other countries, the African diaspora has been returning back home. One of the doctors at Snapper Hill has stayed on with the clinic in spite of her foreign qualification and her former government post. With new investment and a bright future on the horizon we expect there to be little staff turnover in the clinic.
Who are the main users of the medical centre at the moment?
The main customers are residents of Monrovia. They tend to be professionals from the middle class. The clinic also has agreements with the local staff of the World Bank and United Nations missions in Liberia.
What approach do you have towards people who cannot pay for the services but are very much in need of medical assistance?
The clinic is a for-profit entity. The majority of the patients at the clinic have medical insurance to cover their expenses. Where possible, we are studying some options for the least fortunate patients, including working with some charitable foundations.
How will you evaluate that your investment in this project has been successful?
From a financial standpoint, success will be measured by increased patient inflow, increased services and increased revenues. Success will also be measured in terms of quality of service, customer satisfaction and the impact the clinic will have on the community.
What other investment project would attract you next on the African continent?
We like to focus on investments that have exposure to the rising middle class in Africa. We are looking at investments in consumer retail, food processing, hospitality, etc.
What would you like to say to people who might consider investing in the health sector in Africa, but are sceptical of an adequate ROI?
According to the IFC, healthcare expenditure in sub-Saharan Africa is expected to more than double from 2005 to 2016, up to US$35bn, half of which will be captured by private providers. Healthcare is an attractive sector because of its healthy margins and the potential for repeat business. The scope for growth and returns in the sector are definitely there. Of course, investors will have to do their own due diligence to assess if companies can meet their financial objectives and achieve the forecasted returns.