Contributing to India's Well-Being Growth and Development with High-Quality Healthcare Services
May 7, 2025
Brilliant Economic Growth and the Underlying Issue of Healthcare Disparities
India has achieved remarkable economic growth in recent years, but infrastructure to cover its vast territory, approximately nine times the size of Japan, and its population of over 1.4 billion, the largest in the world, is only halfway complete. In terms of healthcare, India does not have full-fledged universal healthcare like Japan, and only around 25% of the population is enrolled in health insurance. Hospitals in India are divided into state-run public medical institutions and private medical institutions, but as the country's economy grows, the establishment of new, high-quality medical institutions, training of medical personnel, and development of a comprehensive medical infrastructure, including a supply chain to support hospital operations, have become social issues. To help address these challenges, Toyota Tsusho is collaborating with the Secom Group to operate and manage hospitals and provide peripheral medical services locally.
Providing Attentive Medical Services to the Community
In hospital management, Toyota Tsusho and the Secom Group Japan jointly established Sakra World Hospital (hereinafter “Sakra Hospital”) in March 2014 in Bengaluru (Bangalore) , India’s fourth-largest city. The hospital is the country’s first Japanese-style general hospital, committed to delivering patient-centered, finely tuned medical services and improving the quality of healthcare.
One of its unique features is that it offers home care services (home nursing, home rehabilitation, home testing), which began in September 2019, enabling seamless medical care from treatment to post-discharge support. Additionally, to provide high-quality medical services to patients located far from Sakra Hospital, the first clinic of this business, Sakra Premium Clinic, was established.
Rooted in the local community, the medical services of Sakra Hospital protected local residents from health-related harm during the COVID-19 pandemic. Having celebrated its 10th anniversary, the hospital strives to offer high-quality services covering a range of local healthcare needs, from prevention and treatment of lifestyle diseases to advanced treatments, by improving the local medical infrastructure. It is also tackling pressing issues in India’s medical practice, including treatment for victims of traffic accidents, which are on the rise, and hospital infections.
Sakra World Hospital
Deputy Managing Director
One of Sakra Hospital’s unique features is its emphasis on thoroughly explaining diagnostic results, treatment plans, and the necessity of hospitalization to each patient. This approach has not only earned the trust of patients, but also frontline medical staff and those involved in hospital operations. Ten years have passed since our establishment, we’ve seen a heightened public awareness around health maintenance and disease prevention in the wake of the COVID-19 pandemic, which has led to increased demand for health checkups. Moving forward, we aim to stay close with the local community to raise health and medical standards in the region.
Consolidating and Achieving Higher Efficiency in the Pharmaceutical Supply Chain
India is the world’s 11th largest pharmaceutical market. In recent years in particular, with the increase in medical needs, the pharmaceutical manufacturing industry is anticipated to grow at a compound annual growth rate (CAGR) of 8 to 12% in the future.
However, there are also issues in the supply chain. Many pharmaceutical distributors in India are small- and medium-sized family-managed companies, which number over 65,000. Hospitals that procure pharmaceutical products have limited types and quantities of pharmaceutical products they can purchase from a single pharmaceutical distributor, and must procure the necessary medicines from multiple distributors. As a result, labor for order placement and inventory management has become increasingly complex.
In response, Toyota Tsusho invested in Skites Pharma (hereinafter “Skites”), a major local pharmaceutical distributor, in 2021. Established in 2017, Skites is a pharmaceutical distributor equipped with world-class in-house warehouses, high-quality logistics, IT infrastructure, and cold chain logistics systems. Its strength lies in its ability to handle approximately 22,000 varieties of pharmaceutical products. Skites also excels in smart logistics, which enables traceability, optimal inventory levels, and stable supply, allowing it to efficiently sell pharmaceutical products to around 12,000 pharmacies and hospitals.
In India, the introduction of the Goods and Services Tax (GST)* in 2017 improved the previously fragmented state-by-state tax systems. As a result, it has become easier for major pharmaceutical distributors like Skites to acquire customers across states. Further consolidation and reorganization of pharmaceutical distributors is expected going forward.
Toyota Tsusho is contributing to the consolidation of Skites’ pharmaceutical distribution business, cost reduction, and operational efficiency through digital transformation (DX), while also incorporating the perspective of hospitals-the buyers of pharmaceutical products-based on the hospital-related needs it has identified through the operation of Sakra Hospital. Furthermore, by collaborating with pharmaceutical manufacturers, Toyota Tsusho is involved in the introduction of both over-the-counter drugs and new products targeting market launch. Toyota Tsusho is also considering exporting pharmaceutical products from India to CFAO Healthcare (Eurapharma), a Toyota Tsusho Group company engaged in pharmaceutical distribution business in Africa, thereby working to create and expand opportunities for selling pharmaceutical products.
- *Goods and Services Tax: An indirect tax introduced in July 2017. Prior to the introduction of the GST, the central government and state governments each levied complex indirect taxes. These taxes were a cause of inefficient supply chains across state borders in India.
Skites Pharma
Director
Since we made our investment, Skites has steadily increased the number of customers and has received a high evaluation in Mumbai and its suburbs.
Going forward, we would like to grow Skites into a pharmaceutical distributor that can “Be the Right ONE” by focusing on the following three points:
1) Smart logistics that achieve traceability through digital transformation, optimized inventory management, and optimized logistics;
2) The creation of a one-stop shop that covers everything from pharmaceutical affairs and manufacturing to sales, logistics, and after-sales service; and
3) stable supply through collaboration with partner companies and Sakra Hospital.
Expanding Medical-Related Services by Combining Strengths
Hospital linens such as bedding and towels require stringent collection, laundering, and storage management from the standpoint of hygiene and infection control. However, within India, there are almost no service providers capable of delivering high-quality services that meet these standards.
In response, Toyota Tsusho partnered with Tokai Corporation, one of the leading companies in Japanese linen supply market, to establish a joint venture, Valabhi Hospital Services Private Limited (hereinafter “Valabhi”), in September 2022.
Valabhi is headquartered in Bengaluru (Bangalore), the same city as Sakra Hospital, and facilitates collaboration between Toyota Tsusho and Tokai Corporation. This partnership fuses Toyota Tsusho’s strengths of Toyota Way field improvements and operational efficiency expertise with Tokai’s strengths of Japanese-style infection control technologies and medical peripheral business know-how to create a new linen supply business model.
In its service delivery, RFID tags are sewn into the linens to enable tracking and precise management of the number of washes, wear, losses, and storage. Looking ahead, the company aims to enhance the quality of the entire service chain including delivery, storage control, collection, and laundering, while expanding this business model beyond Bengaluru (Bangalore) to other cities. Ultimately, it aims to provide various medical treatment-related services, not just linen supply services, to meet India's needs.
Valabhi Hospital Services Pvt. Ltd.
Managing Director
Our services contribute to infection control in hospitals by supplying high-quality linen. Additionally, outsourcing indirect operations such as linen management and other non-medical tasks to external providers helps create an environment in which medical professionals can focus on patient care. In this way, we believe our business plays an indirect role in enhancing the quality of healthcare in India. Looking ahead, we aim to stay ahead of local medical trends and needs, expand our medical peripheral services in line with rapid economic growth, and broaden the scope of our contribution to India’s healthcare sector.
Toyota Tsusho’s linen supply partner company
Establishing a New Hospital to Further Improve Access to Medical Care
India’s medical issues are gradually being resolved. However, there are still areas in the country without sufficient access to hospitals. Toyota Tsusho is therefore planning to build a new hospital (name undecided) in Bengaluru (Bangalore), following Sakra Hospital.
The new hospital is expected to have approximately 450 beds, exceeding 294 beds in Sakra Hospital, and will further strengthen its local medical functions by establishing a Comprehensive Oncology Center, a Comprehensive Pediatric and Perinatal Medical Center, and Advanced Health Checkup Center. It will also be equipped with a training facility for doctors and nurses for better education and training, and an advanced rehabilitation program and home healthcare services provided after a patient is discharged to enhance patients' quality of life (QOL).
Toyota Tsusho will contribute to solving medical issues through measures such as those mentioned here to support India's healthy growth. In addition, we will continue to support medical access in developing countries through the expansion of our healthcare business while accumulating know-how and knowledge through hospital management and medical peripheral service businesses.
