DENVER—DaVita Inc. plans to expand its operations internationally, the dialysis provider’s CEO Kent Thiry said Nov. 4 during a third-quarter investor conference call.
“We are pursuing launching dialysis operations in several countries outside the U.S.,” Thiry said during the investor call. “We believe the long-term upside opportunity dramatically outweighs the downside risk, and that international markets could be a long-term growth driver for our shareholders—long-term defined as the second half of this decade and beyond.”
DaVita expects to be providing dialysis services internationally by next year, according to DaVita spokesman Vince Hancock.
“We realize that building an international business with attractive and sustainable returns will be challenging, will take time, and will expose us to new risk,” Thiry said. “In addition, of course, it will require a sustained financial investment.”
Thiry listed the following factors that led to the decision to expand internationally: the market is large and appears to have reasonable margins, the market is growing more rapidly than the U.S. market, and there is significant market share remaining outstanding. In addition, privatization and government outsourcing trends are gaining momentum globally.
Estimates by medical market research publisher Kalorama have found that the $60.3-billion international dialysis market has experienced 5 percent to 6 percent growth per year in the past five years. In addition, Kalorama estimated that there are approximately 1.8 million dialysis patients worldwide.
“The dialysis products and services market is a highly fragmented market,” Kalorama wrote in a June 24 news release. “Global players account for only a fraction of the total market and the rest is occupied by the regional companies.”
As of Sept. 30, DaVita operated or provided administrative services at 1,598 outpatient dialysis centers serving approximately 124,000 patients.
Thiry said the company couldn’t provide much insight into exact plans because DaVita is in the early stages of developing their international strategy. However, he said that general characteristics of possible places to expand include countries “that have enough scale, that have what appear to be attractive margins, that have nice growth characteristics, and are still fragmented in terms of ownership.”
