May 07, 2024
Sumitomo Corporation

Full-Scale Entry into Private Clinic Business in Fast-Growing Southeast Asia- Investing in Malaysia's Largest Clinic Operator to Expand the Healthcare Business -

Sumitomo Corporation (Headquarters: Chiyoda-ku, Tokyo, President & CEO: Shingo Ueno) will make a full-scale entry into the fast-growing private clinic business in Southeast Asia through investment in CareClinics Healthcare Services (hereinafter referred to as “CCHS”), which operates private medical clinics in Malaysia.

CCHS is a private medical group operating 104 clinics in Malaysia. It has a total of approximately two million patients per year and provides community-based primary care services.*1 Sumitomo Corporation first invested in CCHS in 2020 to provide convenient and high-quality medical services by leveraging its knowledge of chain store operations gained through its retail and pharmacy businesses. It has made additional investments in CCHS several times since then and is now the largest shareholder.
In addition to providing growth funds, Sumitomo Corporation provides CCHS with a variety of support, including developing strategies and strengthening systems for business development and internal controls. Specifically, we analyze the demand for clinics in each region, and in areas where demand is not being met, we establish operating systems that fit the lifestyles of local patients, such as extending the operating hours, to support the community’s healthcare infrastructure. We also standardize healthcare services across all clinics and use digital technology to centrally manage patient information to seamlessly deliver high-quality healthcare services.
By combining the strengths of CCHS and Sumitomo Corporation, the number of clinics has grown from 18 at the beginning of the collaboration to 104 (as of March 2024), making it the largest private health clinic networks in Malaysia.
Going forward, we aim to expand to 300 facilities by 2026 and build a solid business foundation in Malaysia. We also aim to expand our healthcare business in Southeast Asia, and provide better medical services, through expanding the clinic business to other countries and collaborating with the managed care business*2 of SC Healthcare Holdings, our group company.

*1. Primary care services:
A community health care service that responds comprehensively and continuously to all health problems and diseases, including pre-symptomatic health conditions and disease prevention, to serve for public health care and function as family physicians.

*2. Managed care business:
A managed health care system that has been increasingly adopted mainly in countries where public health care systems are not well developed, in which companies/private health insurance companies, managed care providers, and medical institutions work together to manage medical services provided to patients.

CCHS Clinic

Current State of Healthcare in Malaysia

In recent years, problems related to healthcare have surfaced in Malaysia. The aging of the population and the increase in lifestyle-related diseases have increased the demand for medical care, however the quality and supply of medical services have not kept pace with this demand, causing lack of adequate medical services and long waiting hours to receive medical treatment. In addition, the development of medical technology has also increased medical costs, placing an excessive burden on patients, employers, and insurance companies.
Under these circumstances, efficient and convenient clinics are expected to serve as the first point of contact for health management and primary care. The Malaysian government encourages local clinics to play an important role in providing primary care services.

Sumitomo Corporation’s Commitment Affinity with the Managed Care Business

To strengthen and develop its healthcare-related business over the medium to long term, Sumitomo Corporation operates pharmacies, establishes community-based comprehensive care systems, and provides support for drug discovery, both in Japan and overseas. It also operates a managed care business in Southeast Asia.
In Malaysia, approximately 60% of clinic visitors are members of managed care providers’ medical insurance programs or company employees. Because members of managed care programs are required to use clinics contracted by managed care providers, close alignment between the managed care business and the clinic business is inevitable in order to provide high-quality and efficient medical services.
Through cooperation between clinics and managed care providers, Sumitomo Corporation provides health management services by offering in-house clinics to corporate clients of managed care providers providing health checkups and other programs to detect pre-symptomatic health conditions to prevent diseases among their employees. We also strive to contribute to the financial management of patients, medical institutions, companies, and national and local governments by developing services to curb and optimize medical costs leveraging knowledge obtained from each business. These include pre-symptomatic/disease prevention services, early detection of members of managed care programs who are at high risk of sickness and provision of medical treatment for them.

<Profile of CareClinics Healthcare Services Sdn. Bhd.>

Company name CareClinics Healthcare Services Sdn. Bhd.
Established 2017
Business Primary care service business in Malaysia
Employees 959 (as of March 2024)
Facilities 104 (as of March 2024)
Clinic locations KL, Selangor: 78,Ipoh: 8,Melaka: 11,
Johor: 4,Penang: 1, other locations: 2

—Sumitomo Corporation’s Healthcare Business in Southeast Asia

Since establishing Tomod’s, a chain of pharmacies in 1993, Sumitomo Corporation has been committed to improving the quality of community healthcare in Japan. Sumitomo Corporation has used the knowledge it has gained in operating Tomod’s to expand its healthcare business in Japan and overseas, entering the overseas healthcare business in 2019 with the goal of “building a sustainable healthcare system that serves to improve the quality of life for individuals.”
Sumitomo Corporation has invested in SC Healthcare Holdings, a group company in Malaysia, and Insmart in Vietnam to operate the managed care business.
Sumitomo Corporation has been working to advance its managed care business and solve social issues by providing value-added services—such as online medical consultations and prescription services—and health promotion programs, in addition to the functions of medical payment management and medical infrastructure that existed before its participation. As a result, SC Healthcare Holdings has the largest market share in the industry in Malaysia. We will continue to expand our business through the analysis and utilization of experience and knowledge, with the goal of reducing the medical costs in Malaysia by approximately 30 billion yen by 2030. We are also actively considering expansion into Singapore, the Philippines, and other regions in Southeast Asia.
Through cooperation between managed care providers and clinic businesses, we will continue to build a network of social infrastructure to support healthcare in Southeast Asia.

Corporate Communications Department, Sumitomo Corporation
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