Olympus 2014 Annual Report Download - page 15

Special Feature: Reliable Growth in Global Markets
Asia / Oceania
Q
Q
Q
The key to expanding the Asian market can be found in training support and
service systems. Olympus will strengthen these systems to respond to the
rising demand for safe endoscopic procedures and endoscope repairs.
At the same time, large-scale products will be systematically introduced into
the Chinese market, a growth driver in Asia, to rapidly expand our operations
in this region.
Mitsuhiro Hikosaka
Division Manager of Medical Business Div.
of Asia / Oceania, Medical Business Group
(Executive Offi cer of Olympus Corporation /
President of Olympus China Co., Ltd.)
What is your view of the business environment in the Asian market?
Also, would you please discuss the past year’s results?
What initiatives and policies will you focus on over the next year?
Finally, would you please discuss your medium-to-long-term business growth strategies?
Operating Environment in Asia
Asia is characterized by considerable latent demand,
particularly in China. The population in Asia, and
consequently the number of patients, is massive, but
the number of physicians is quite low in comparison.
On top of this, medical technologies still need improve-
ment. Our main challenge in this region is spreading
medical procedures and helping train physicians. At the
same time, political issues and the institution of stricter
regulations will probably continue. Accordingly, it will
be important for Olympus to ensure it can advance
business activities in compliance with ever-stronger
regulations and unimpeded by political issues.
Initiatives and Successes over the Past Year
Our operations continued to feel the impacts of anti-
corruption activities and political issues throughout
fi scal 2014, and I regret having to report that, on a
local currency basis, sales in China were unchanged
as a result. Over the year, we strengthened our corporate
governance systems, and our systems are now
particularly strong for our industry. At the same time,
we pushed forward with efforts to spread endoscope
usage and train physicians with the aim of advancing
ongoing medical progress in Asia. For example, in
November 2013, we established a training center in
Guangzhou. Adding to our existing Chinese training
centers situated in Shanghai and Beijing, this center
isour largest training center in Asia. Going forward,
demand for training and after-sales services is
expected to grow, and we are constructing systems
in response, such as infrastructure for spreading
medical procedures and helping train physicians.
Inaddition, we relocated our local offi ce in Australia,
where stable economic growth is creating a rise in
demand. Into this offi ce, we introduced a repair center
that allows visitors to bear witness to our high-quality
service as well as a training facility(*). These were
some of our greatest accomplishments in fi scal 2014.
* The training facility utilizes training apparatus made to resemble a human body into
which trainees can insert endoscopic surgery forceps (the scissor-like instruments
used to grasp and pull tissue and foreign substances inside the human body).
In spring 2014, EVIS LUCERA ELITE and VISERA
ELITE were introduced into the Chinese market. These
products are already available in Europe, the United
States, and Japan and are expected to be major
growth drivers in China. Also, we plan to receive sales
approval for a new 3D laparoscopy surgical system
from the Chinese government. I anticipate that this
new system will greatly change surgical procedures,
and I am committed to supporting this change.
Furthermore, we intend to commence sales of our
new THUNDERBEAT energy device during fi scal2016,
positioning us to further expand our share ofthe surgi-
cal device market in China. In the coming year, we will
focus on sales activities in the gastrointestinal and
surgical device fi elds,
including promotions of
new products. Through
these efforts, we aim to
transform these new
products into growth drivers that will make strong
contributions to earnings from fi scal 2015 onward.
Furthermore, we aim to strengthen sales of Axeon,
anew gastrointestinal endoscope targeting hospitals
that do not boast substantial purchasing power.
Axeon is positioned as a strategic product for
expanding the number of institutions using endo-
scopes, and we anticipate it to be a powerful tool
inadvancing the growth of our operations.
China
To reiterate, China is a major growth driver in Asia.
There are currently approximately 25,000 hospitals in
the country, but the Company’s main customer base
consists only of the elite hospitals among these, or
roughly 1,300 institutions. We aim to expand our
customer base to around 3,000 institutions, and we will
need to expand the market itself to do this. We are
developing robust service systems, centered on
specialized training and other educational support
services, while helping boost the quality of China’s
medical services through academic societies and other
interactions with physicians. We hope these efforts will
contribute to future market expansion. From a long-
term perspective, we are also strengthening the sales
and service systems needed to respond to projected
rapid market expansion and intensifi ed competition.
Asia / Oceania
The usage level of gastrointestinal endoscopes in Asia is
such that it will take 20 years or more for the region to
catch up with developed nations. In this manner, endo-
scope usage is still quite low in China, India, and other
Asian nations. Nevertheless, the market is growing. The
overall size of the Asian endoscope market is expected
to double in size over the next fi ve years and to triple
in size over the next 10 years. In light of this, Olympus is
constructing foundations from a forward-looking perspec-
tive targeting 10 years down the line. However, before
endoscope usage, it is important that we address the
diagnosis and treatment rates of early-stage cancer. For
example, stomach cancer has a high rate of occurrence in
Japan, South Korea, and northern China, while other parts
of Asia and Oceania have recently been seeing a rise in
colorectal cancer, which was previously rare. While inci-
dence varies by country, it is common for cancer to be
found at a late stage due to the lack of physicians
trained in endoscopic procedures in Asia. Higher early
diagnosis rates will require that endoscopic procedures be
spread and the number of physicians capable of safely
conducting these procedures be increased. Support for
these advancements is crucial. For this reason, training
centers and other infrastructure must be developed
throughout Asia, not only in China, and we believe that it is
the Company’s mission to contribute to local communities
in Asia by supporting their government and academic
societies in that endeavor. We already have training centers
in place in China, and we are considering the possibility
of establishing such centers in other Asian nations.
However, in improving the standard of medical
care, it will not be enough to just spread early cancer
diagnosis techniques and help physicians learn
procedures. The general public will also need to be
educated. These represent important tasks that we
must tackle from the big-picture perspective of elimi-
nating cancer itself, which will require collaboration
with government institutions in each country. Above
all else, we must make Olympus into a company that
is indispensable to medical progress. It is this sense
of purpose that guides our actions.
A
A
A
New of ce with enhanced service and training functions established
in Australia in February 2014
Latent Demand in China, Asia’s Growth Driver
Elite hospitals with
large case numbers
of endoscopic
treatments and
signi cant
purchasing power
Olympus current
principal customer
base
Prefecture
Province
City
Possesses
endoscopes
Olympus client
classi cation District
Does not
possess
endoscopes
Township
Town
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OLYMPUS Annual Report 2014
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