08 MAY 2002

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Medea - a unique alliance

MEDEA LIMITED IS A UNIQUE STRATEGIC ALLIANCE SET UP LAST OCTOBER BY THREE LEADING COMPANIES IN THE HEALTH SERVICES INDUSTRY, FIERCELY COMPETITIVE AS STAND ALONE ENTITIES BUT UNIFIED TOWARD A COMMON GOAL. DAVID LINDSAY SPEAKS TO TECHNOLINE’S SIMON CUSENS, PHARMA-COS LTD’S MARCEL KARL MIFSUD AND ASSOCIATED EQUIPMENT’S PAUL DALLI ABOUT THE PARTNERSHIP

Medea is a synergy between three leading local healthcare companies and although the three are autonomous, independent and actually in competition with each other, they came together to present a united front for large projects, the first of which is the new hospital project at Tal-Qroqq.

The three companies equally own Medea Ltd., which was set up as a subcontractor with a view to interfacing between the international contractors and those issuing the tenders.

The individual companies involved in Medea – Technoline, Pharma-Cos and Associated Equipment - had realised early on that their chances on their own were small due to their own individual limitations but as a united front these chances would be greatly increased through the emergent security, stability, long term reliability and a holistic solution of high quality products.

As Paul Dalli explains, "I see it as something truly unique and as being very different from anything you would see locally or even abroad, although it could be paralleled with what is happening within the insurance or airline industries.

"It could be seen as a consortium, but it is not. When you speak of a consortium, you speak of a number of companies from different lines who work together.

“Medea, however, comprises three companies with basically similar product portfolios which we are merging together. But when we come together we are complimentary and fully-fledged - encompassing the full spectrum of medical requirements, whatever they might be.

"Although we are fierce competitors in the market, we take pride in what we do and most of the most delicate and specialised equipment at the hospital has been supplied by one of the three of us. Each of the individual companies excel in a niche sector and coming together we really matter and excel in all the areas and provide a wholesome solution."

Speaking about the merging of products, Simon Cusens explains, "There was an agreement between us that each would bring in his product portfolio, through which each company is also bringing in their expertise. While there are certain overlapping areas of expertise, there was a mutual agreement between us whereby we were able to individualise where one company excels over another and it would be agreed that that particular company would concentrate on that particular field, brand or item.

"For example, Technoline is very well known on the local market for its imaging products, so a decision was taken to push the Philips product range within this sphere although there was the possibility of bringing in other players through the other two companies involved. It’s only natural that we would be individually biased toward our own brands."

Tenders were issued for over 1,200 items in terms of the new hospital project, a mammoth development and the tendering process took Medea some four months to complete, in the process mobilising large amounts of staff to that end.

Mr Cusens elaborates, "What we did was gather these tenders together electronically and batch them off to the main contractors, who had a choice of reaching a deal with us to use our products and services or to do it themselves.

"The choice was entirely theirs. In fact, out of the five contractors who submitted a bid, there were two who worked very closely with Medea, another two were involved to a certain degree while another had their own strategy.

"If presented to the clinicians and the end users the way we presented the tender requirements to the contractors, we believe that it will be a very user friendly offer."

This is down to the fact that the three companies have first hand experience of what the clinicians themselves require. As Mr Cusens adds, "We did not structure our presentation for the Foundation for Medical Studies, the adjudicating committee or for the sub-committees. We presented it in a matter in which the end user would immediately associate with and we are hoping that the end user will be consulted during the decision making process.

"Medea can make one thing more simple for the FMS and we hope it is noted by the decision makers. We’re talking about the physical migration of a 1,000-bed hospital in terms of human resources, expertise and equipment to a new building in a different location that is not tried and tested. This upheaval is massive.

"Medea can simplify the process to a very high degree by not interrupting the working relationship there is between the leading healthcare companies in the country and the doctors and end users.

"We know what they need, we deal with them everyday ourselves and see to their needs on a regular basis. So if Medea were brought in as an interface, either at the request of the contractors or of the FMS, it would be greatly beneficial to solving a problem that would ultimately affect the quality of service to the patient.

"This is as project for Maltese people and who better than experienced Maltese professionals to advise or consult the doctors and clinicians than Maltese with vast experience in the country’s health sector."

One of the main synergies emerging from the alliance is access to each company’s wide product portfolio of world leading brands, effectively creating a one stop shop for comprehensive and better health care solutions. "We no longer believe that we are selling products, but solutions backed up by trained personnel who very often come from the medical field themselves such as nurses and bio technicians and who better to understand the needs of the clinicians than those from the clinical field themselves?

"We have a contribution to give and we are very eager to give it. We know what the local end user requires better than the overseas companies who are used to other markets.

"During the life span of this hospital service will only be a phone call away and our expertise in the field speaks for itself. In fact, we have not proposed any items or brands that we are not using today, we are used to all the product ranges we have submitted."

"The three have merged and have made available their full product portfolios and by merging the products, each product still has its own interest and its own pricing so it’s not a cartel situation. It’s truly distinctive as we are giving various options according to our individual portfolios and we are still competing in quality, price, products and features," Mr Dalli comments.

Mr Mifsud emphasises, "We came to an understanding upon what requirements needed to be met for the tenders. Therefore due to the synergistic relationship we decided not to waste three individual resources in pushing similar products when at the end of the day the specifications clearly indicated what the end user wanted."

Turning to the tendering process for the requirements of the new hospital, Mr Dalli explains, "Generally speaking, we delivered options – where the specifications were grey, we offered various options and in some cases we gave four options for the same item, more than there are companies involved.”

However, Medea banks not only on the supplying of products, but on the expertise the individual companies have in their possession.

According to Mr Cusens, "Medea is not only experienced in representing products and having trained staff to back them up – it has core competence in all these areas. In fact, we are very strong in consultancy and advice, we know other people’s experiences, we know it would not be a good idea if a group is thinking about a similar set up to one already in existence and if two would be sustainable in the country, for example.

"As such we are a point of reference for anyone embarking on a project. We know things that are not necessarily public knowledge so we are in a position to consult and advise to a high degree.

"We do have customers who approach us for financial options, project planning and even product and service training for hospital personnel. We bring trainers in from the manufacturers to train and certify personnel. We talk of providing better health care solutions because we offer a fully comprehensive service.”

But was Medea instituted with the sole aim of supplying the new hospital, I ask?

To which Mr Cusens replies, "It definitely was not set up only for this project and two of the four contractors who have consulted us have indicated that there is scope for them to talk to us on future projects.

"Many of these groups work with part timers, they engage staff depending on the intensity of a project. Each tender requires a good deal of work and then there are four months in which to wait so rather than laying off people, they employ part-timers. It is a problem for them because they live abroad where people need to travel long distances and they need to commute for three months of work at a stretch and that is a problem.

"Medea has also offered its assistance in this respect as well. In the days of e-mail and Internet we have done extremely well with transferring information, understanding the briefs, preparing the offer, getting it across, answering the questions – through the synergy of expertise that we can offer.

"We believe that there is a role for Medea in the future either as a main contractor or as a subcontractor to the main contractor as is the case of the tenders for the new hospital.

"Some of the people involved are renowned entrepreneurs in this market – who have been involved in anything from construction to production of medical disposables, to the production of aluminium and glass and pre-installation work to medical gases – Medea is a formidable source of expertise.

Medea’s know how transcends the shoreline of Malta, based on the experiences of the companies involved.

One instance of that is the extensive expertise from projects carried out abroad, in Libya for example. Another is that Medea has resource to a forum in Europe in which distributors such as the individual Medea companies come together four times a year from 20 countries to discuss emerging medical technologies.

If the Medea were to succeed in their offers for the new hospital, there would also be trickle down effects from the process, considering the significant cash outflow of, as the bids stand, Lm20 to 25 million. As an offshoot, there is also a Lm2 million component of items that Medea would expect to purchase from the shops of Malta.

As Mr Cusens explains, "It’s no secret that the economic situation in the country is not at its best. I think that Medea could actually contribute through this project to make that picture better than if the contract goes to an international company and the entire cash transfer were to leave the island.

"By using Maltese technicians, professionals and companies a certain amount of the cash outflow would be injected into the economy. Once such expertise is avaliable in the country, it should be put to use."

Mr Dalli adds, "The tender will be awarded to a foreign contractor but what the authorities should consider is whether they have involved local contractors and if so to what degree.

"We are small fry by international standards but two large institutions recognise that we have the capabilities on which to base their offer and their offer is based on the Medea interface and is under their direct responsibility. These people have signed on the dotted line that they will be responsible and they have accordingly placed a large responsibility on Medea.

"If Medea fails, they would be held responsible and risk losing their performance bond of Lm2 million. This goes to say that if two of them came to this conclusion, the resource we are presenting is up to international standards, enough to put their name on it.

"We’ve convinced the people that they need to deliver and we believe that we should be part of the equation – we’ve been at it 20 years each."

The perils of the globalisation phenomenon also hold the potential of having an impact on the local industry, as Mr Cusens explains, "One problem that suppliers face is that if you are not representing a strong manufacturer that can survive in the competitive atmosphere overseas.

"There is a certain strength in a strategic alliance. One thing that each of us cannot afford is to have our companies dependent on one brand. Even if you do the best job, with the globalisation phenomenon, if that brand becomes acquired simply to be killed off, which is taking place with increasing frequency, you end up having to lay off employees or even closing shop.

"With the highly fluid effects of the globalisation phenomenon, Medea is seeking to address this uncertainty by providing a stable broad based resource pool that will withstand the significant pressures of the volatile health care industry."

 



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Editor: Saviour Balzan
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