Finnfund

DBC International was established in 1997 to exploit a programme, developed in Finland, for treating chronic spinal problems. The Finnish company licenses its methodology of rehabilitation to clinics around the world.

At the moment DBC International has clinics in 22 countries in Europe, North America, Middle East, Asia and Africa.

The sole licence holder in South Africa is DBC SA, owned by its local management and the doctors who work for it.

The eight clinics in South Africa have medical and managerial staff of nearly 60 people. Several years have been spent in gaining local acceptance for DBC’s way of treating back and neck problems.

“It has been a challenge to get medical approval and to build the DBC programme into a profitable business,” says Albert van Zijl, managing director of DBC SA.

Rehabilitation makes a breakthrough

Of the 52 million people of South Africa, most have access only to public health services, but seven million have personal or occupational health insurance. This allows them to use the services of private clinics and hospitals.

In proportion to the population, South African hospitals carry out a lot of spinal surgery. DBC’s treatment programme is well-suited for post-operative rehabilitation.

Effective rehabilitation is something new for South Africa. Physiotherapy was previously used just to identify patients who did not need surgery, Albert van Zijl explains. Now doctors, employers and insurance companies are coming to realise that non-invasive treatment can reduce the need for surgery and thereby save costs.

“Our long-term strategy is to roll out an effective and feasible model that can benefit the whole nation. We are doing this in cooperation with the government and other socially responsible partners.”

The South African government plans to introduce standard national health care within the next five years. This will include preventative treatment as well as new hospitals and clinics, but keeping costs under control will be vital for its success.

Partners must know the local market

The managing director of DBC International, Petri Kiviranta, believes that the Finnish rehabilitation model will conquer the field in the years to come. The long ramp-up period is simply a fact of life.

“It was worth introducing South Africa to DBC. We have a good partner there, who knows the market and saw how changing health care structures were creating an opportunity. We would never have spotted it from Finland.”

Kiviranta believes that success fundamentally depends on a grasp of local markets and business conditions. Knowing the health care system is not alone enough. Understanding the role of stakeholders in occupational health, like employers and insurance companies, is also important.

“Together we reached the conclusion that South Africa was ready for the Finnish model of physiotherapy and rehabilitation.”

The risks are small in a business model based on sale of licences. The investment in South African clinics is made by the local partner.

“We offer information, skills and technology. Our partners have to be strongly motivated to make the joint project work, by providing high-quality services. They need more than just market information. They must have a clear vision of the business opportunity, the strategy and operational management. Shared values are also important.”

Expansion financed by Finnfund

Finnfund has provided an investment loan to finance the establishment of new DBC SA clinics. Its finance has allowed operations to be expanded nationwide. Finnfund investment manager Ari Nironen says that DBC’s methodology has major advantages.

“For the patient, rehabilitation is a less painful alternative than surgery. For employers and society as a whole, it brings lower costs and absenteeism.”

Albert van Zijl regards Finnfund’s participation as important. Finance to start or expand a business is hard to come by in South Africa.

“Getting start-up finance is always the biggest challenge here. You need a lot of capital to establish clinics and obtain equipment. It also takes time before operations become profitable.”

The business of DBC SA is showing steady growth. In the years ahead it aims to open seven new DBC centres and to raise the capacity of existing clinics.

“I believe the DBC brand has reached the tipping point in the South African market. This is reflected in the number of new agreements that we are currently making with insurance companies.”

The long-term aim is to extend operations to other parts of Africa. Charting new markets could start in late 2011 and 2012, van Zijl says.

For more information please contact Mr Ari Nironen, tel. +358 40 547 8848, firstname.lastname@finnfund.fi