Sojitz Corporation

CLOSE

Hospital Project in Turkey

– Sojitz joins project for operation of medical facilities in Turkey –

April 2018

pj1804_01.jpg
Concept image

(Job titles and organizations reflect those at the time of the article’s publication.)

First Overseas Hospital PPP* by a Japanese Company
The First Step to Entering a New Field for Sojitz – the Healthcare Business

The government of Turkey first set a medical treatment improvement plan in 2002, later introducing universal healthcare in 2008. While this resulted in more Turkish citizens with health coverage—improvements in average life expectancy (rising from 71 to 75 within a 10-year period) and infant mortality rates being the biggest indicators—it also meant more patients. Calls to modernize state hospitals and improve medical treatment across the board led to a range of investment. This included investment to create more hospitals, using a scheme whereby public and private organizations collaborate to provide nationalized service, as well as investment to increase the number of hospital beds to 55,000 (currently only 40,000 beds total).

*PPP:Public Private Partnership

“Now this we can do.”

The Ikitelli Integrated Medical Campus is located in Istanbul and houses 2,682 hospital beds. Total cost for the project amounts to approx. JPY 200 billion, with Sojitz planned to contribute JPY 30 billion in investment and loans. The facilities are scheduled to begin operation in 2020.

Sojitz first heard of this project in June 2015. Ronesans Group was in the midst of developing its EPC (engineering, procurement, and construction) business, and Ronesans Chairman at that time, Illicak Erman, mentioned it to Sojitz. The team working on the project was initially hesitant given that Sojitz had no experience in hospital projects.

The project is unusual in that the Turkish government is responsible for providing doctors, gathering patients, and monitoring medical procedures; Ronesans Group is responsible for design and construction; Sojitz is responsible for acquiring funding for the project; and the joint venture established with Ronesans is responsible for managing facility operations.

Expanding Sojitz’s Portfolio – Joining a Hospital Project

“We set up a team for the project with around 30 members, and once a month, they would gather to report their progress. Even so, things didn’t go as planned. We originally expected to reach the financial close by December 2016, but this was pushed back to 2017.” says General Manager Ikuo Koinuma, looking back on their difficulties with the project. “Sojitz helped lead the development. In particular, designing the financing scheme and approaching banks required us to team up. There were periods where we were up all night working on the project for days at a time.”

Team member Takahito Kurata describes the future of the project like this: “Our relationship with Ronesans stretches back over 10 years. It was our success with manufacturing plants in Turkmenistan and Russia which led Ronesans to bring this project to us. While tensions strained over differences in the decisionmaking process and sense of speed between our companies, I can say now that it was only because of our relationship with Ronesans that we were able to bring this project to fruition. Our participation in the project has expanded the scope of Sojitz’s business, and we hope that it will lead to future trade in medical equipment, diagnostic materials, and pharmaceuticals.”

Masaki Ishiguro handled finance. He places particular emphasis on the team’s successful collaboration with Ronesans, saying, “I was dealing with a constant, rapid-fire stream of hard-hitting questions every day, but it was those questions which helped me get a deep understanding of the project. I built trust with these parties as I met their questions head-on.”

All three of these men agree that the team demonstrated excellent teamwork on the project. While the project team comprised 30 people from both the business and corporate departments, they nevertheless were able to join forces to make this project a success under their motto of “Never give up. Talk it out.”

At the financial close ceremony in July, Japanese and Turkish flags adorned the streetlamps alongside flags bearing the Sojitz and Ronesans logos. When footage of Turkey’s president attending the ceremony made the news, the locally-hired staff of Sojitz’s Turkey office were in awe.

“The healthcare industry is expected to hold great potential for growth and diversification in the future. With this limited-risk project, we make our first inroads into this new field, whereby we can obtain medical facility operations knowhow and learn techniques for efficient hospital operation,” says GM Koinuma with a twinkle in his eye.

pj1804_02.jpg

Planned construction site for the IHC

pj1804_03.jpg

Chairman Sato meeting with Turkish President Recep Tayyip Erdogan at the financial close ceremony in July

Page top