Amarinder Singh, Founder & CEO, Clove Dental
"We have raised over Rs100 crore from international investors and will likely raise additional capital late next year or in early 2016."
Nov 27, 2014 12:11 IST India Infoline News Service
Clove Dental, headquartered in New Delhi, began operations in mid-2011 and now has nearly 40 dental centers, in Delhi NCR and the Chandigarh Tri-City Area. This fiscal year the company plans to expand to 90 clinics / locations in Delhi NCR and Punjab. Close to 150 doctors operating under this brand and almost 60% of them have advanced degrees. With almost 98% of the Indian dental market being in the unorganised space, Clove is striving to establish a chain of multi-specialty dental clinics. Replying to Anil Mascarenhas of IIFL, Amarinder Singh says, "We have raised over Rs100 crore from international investors and will likely raise additional capital late next year or in early 2016."
Give us a brief overview of the dental market. What are the changing trends here?
Currently, India's dental industry is highly fragmented, so the standard of services provided varies widely and is often quite low, particularly in rural areas. Clove Dental intends to set the benchmark for dental services by offering world class services across all dental specialties in convenient locations and at a competitive cost.
Though India's dental market is fragmented and lacking a clear and enforceable set of standards, it is growing at a fast pace. Including both dentists and dental ancillary services, it was worth $739 million USD in 2010 and is expected to reach $1.3 billion USD by 2015, expanding at a compounded annual rate of 12%.
We're seeing a number of trends in the dental industry that are very exciting.
- Many international manufacturers of dental equipment and supplies have set up offices in India, as they see great potential in India's dental market. These multinationals include: KaVo, Ivoclar-Vivadent, DENTSPLY, 3M, Nobel Biocare, Mectron, Sirona, and SS White. Their presence will have an impact on the quality of dental care delivered in India and will also help Indian clinics market their services more effectively to an international market.
- The Indian dental market is witnessing the entry of dental networks such as Clove Dental;these networks can achieve economies of scale that individual clinics cannot achieve. This puts us at an advantage, as it allows us to bring the latest tools, equipment and technology and a very broad range of treatments and services to our patients. These innovations include advancements in technology that have changed the face of dentistry.
- Dental tourism has the potential to become a booming industry in India and much progress is being made in this area. There has been a vast improvement in the quality of technology and infrastructure in Indian dental services. Because a larger number of dental service providers are now offering the latest treatment methods, they are in a better position to attract patients from overseas. Dental tourism forms 10% of the total medical tourism industry and is projected to grow at 30% in the next year.
Recent improvements in oral healthcare go well beyond toothpaste and mouthwash. For example, advancements in dental technology have resulted in a significant reduction in the treatment-related pain experienced by the patient. At Clove, we use The Wand - Single Tooth Anesthesia? system; it offers advanced injection technology that delivers anesthesia exactly where it's needed, so patients experience far less pain during treatment. As consumers become more aware of the pain-management technologies available, the fear of pain that prevents them from seeking treatment should dissipate. We hope that this will enable us to address their oral health issues before they become severe.
Clove clinics are also equipped with intraoral cameras that enable our dentists to get a far better look at the condition of a patient's teeth and gums. This facilitates a more accurate diagnosis. And because our patients also see the photos, they can see problem areas and change their oral care habits as necessary.
In terms of treatments, implants represent one of the greatest innovations in dentistry. As a replacement for a permanent tooth that's been lost due to decay or an accident, implants far surpass alternative solutions such as bridges or dentures. An implant offers the appearance of a real tooth and provides durability and functionality that can't be matched by any other prosthetic device designed for tooth replacement.
What kind of infrastructure are you building to improve dental care and its awareness?
Clove Dental is making every effort to introduce an entirely new standard for oral healthcare to the Indian consumer. Patients are introduced to this new standard the moment they walk into our clinics. Our clinic lobbies offer a completely different look and feel. They are inviting and friendly - not cold and sterile.
Before entering the operatory, they'll be asked to cover their footwear with our shoe covers. This is just one of many steps we take to ensure that our clinics meet the highest international standards for clinical hygiene and safety.
Before treatment begins, the attending dentist will remove all required tools from their sterile packaging in front of the patient. This assures the patient that all tools used during treatment have been sterilized. And our sterilization rooms are typically just next to the operatory, so patients can see this critical component of our infrastructure for themselves.
Our patients are seated in unique dental chairs that are equipped with retractable valves; the valves prevent the backflow of oral fluids into the chair tubing. Most dental chairs allow the backflow of these fluids into the tubing, and though the tubing is sterilized after a treatment, it is far more effective to prevent oral fluids from passing into the tubing in the first place.
Convenience and accessibility are also important aspects of the service we offer. We currently have over 50 clinics in the Delhi NCR and Chandigarh Tri-city areas (over 40 are operational and there are another 10 in the pipeline). Our clinics are open from 9 am to 9 pm, even on Saturdays and Sundays. Families can use several clinics - one close to home, another close to the workplace and yet another close to school, and they will experience the same standard of care and the same uncompromising attention to hygiene and safety at every clinic. Patients' records can be accessed from all clinics.
One of our key differentiators is our team of dentists. We have over 170 dedicated, well-trained dentists on our payroll, and half of them have advanced degrees in a dental sub-specialty. Our selection criteria for doctors are very stringent: the dentists we have on board were selected from a pool of over 18,500 profiles. They have been trained in India's best dental institutions and receive additional training after joining Clove. Because our team brings skills and experience from all dental sub-specialties as well as general dentistry, there's no oral healthcare issue we cannot address. Collectively, our dental team brings over 1,000 years of experience to our clinics.
Our dental team includes a talented pool of the following specialists; periodontists (for gum disease), endodontists (for root canals), prosthodontists (for tooth restoration and replacement), orthodontists (for braces and aligners), and pediatric dentists (for children). Our specialists can also provide oral cancer detection. When general dentists refer patients to one of our specialists, patients are, in effect, getting two opinions and the attention of two highly qualified dental professionals without having to go outside our network.
These are all important aspects of the infrastructure we are developing, and feedback received so far suggests that we are making good progress in our mission to become North India's preferred dental care provider.
You have a membership by Royal Society of Medicine, UK. What is so unique about this?
Our membership in the Royal Society of Medicine (RSM), UK, is another indicator of our emphasis on quality, ethics and transparency: we are the only Indian healthcare organization to have been given a membership by this prestigious body.RSM membership sends the message that our doctors and clinics adhere to the highest international clinical standards.
Indian consumers were in the habit of often believing that they needed to go outside India for the best care. But our RSM membership suggests the opposite: patients can now access the best dental care possible right here. In fact, recent reports from the National Health Service (NHS), UK, suggest that NHS patients may find higher standards for clinical hygiene at Clove clinics, rather than their local clinic. Earlier this month the NHS reported that thousands of patients were recently recalled over fears that they may have been infected with blood-borne viruses due to a dentist's negligence with respect to sterilization.
Explain to us the dynamics involved in the healthcare and dentistry in India?
India's healthcare industry is transforming quickly, thanks to the increasing demand for quality healthcare. The industry is expected to reach a valuation of $100 billion USD in the next year, from the current $65 billion USD, and is projected to reach $250 billion USD by 2020.
As mentioned earlier, a recent report indicated that the country's dental services market is growing at a fast pace. Comprised of dentists and dental ancillary services, it was worth $739 million USD in 2010 and is expected to reach $1.3 billion USDin the next year, growing at a compounded annual rate of 12%.
The global dental care market was estimated to be worth about US$16 billion in 2005 and has been growing at an average annual growth rate of 4.5%. There are more than 1,80,000 dental professionals in India, over 290 dental institutes approved by the Dental Council of India, and over 5,000 dental laboratories.
According to various reports, growth rates of 20 to 30% are forecast for the dental product market in the coming years. Some financial investment groups are also building hospitals with dental specializations, offering general dental care and specialty treatment.
The endodontic dental service has been the predominating revenue segment in the dental care services market over the years as per the India Dental Services Industry Outlook to 2018 report.
There is a co-relation between oral health and eating habits, pregnancy and heart. Tell us more about it.
India's National Oral Health Programme reports that 95% of the population suffers from some kind of gum disease. Consumers in general are unaware of the relationship between poor oral health and general health. Gum disease in particular can pose very serious problems when ignored.
Take pregnancy, for example:
- According to The Journal of the American Dental Association, pregnant women with chronic gum disease are four to seven times more likely to have a premature baby. And gum disease in pregnant women can also cause low birthweight in their babies.
- Preterm delivery is the major cause of neonatal mortality and of nearly half of all serious long-term neurological conditions / morbidity.
- Premature and low-birth weight babies are still 40 times more likely to die during their first month (the neonatal period). Those infants who survive the first month face a higher risk of several neurodevelopment disturbances, health problems (such as asthma, upper and lower respiratory infections and ear infections) and birth defects, disorders or malformations.
- It may be hard to take gum disease seriously, especially when it doesn't cause pain. But pregnant women must be aware of the possible consequences of a premature delivery or low birthweight. The consequences can be grave.
- According to the Chicago-based Academy of General Dentistry, those with chronic gum disease are also at higher risk for a heart attack. Bacteria from the mouth can enter the bloodstream through the gums and these same bacteria have been found clumped in artery plaques. One theory is that these bacteria stick to the fatty plaques in the bloodstream, directly contributing to blockages.
Given that most of the dental institutes are full, what is the demand supply gap? It is often seen as a safer profession in the medical field too and financially rewarding. What steps are being taken to fill the technical gap in dentistry in India?
India has nearly 300 dental colleges that are approved by the Dental Council of India and they graduate a solid pool of talent every year. The challenge is not supply and demand, but the quality of education and training, which is not always consistent across these colleges. Dentistry is a neighborhood business, so it makes for an outstanding profession as it allows dentists to work flexible hours and have a clinic in their neighborhood. They build credibility in their community and become respected members of the community.
Comment on your financials. What is the outlook?
We are currently in the investment mode. We are deploying the dental infrastructure of good quality clinics with world-class equipment and recruiting top dentists. Over the next few years we plan to grow our clinic network to about 350 clinics across 10-12 regions in the country.
What are some of the challenges in this sector?
The dental care sector is a largely unorganized part of the country's health care market. Traditionally, India's dental care needs have been met by small clinics, usually run by one or two dentists. Historically, the sector has not been guided by a firm set of principles or standards, which accounts in part for its unorganized and fragmented nature.
The dental insurance sector in India is at a nascent stage, as only a handful of dental insurance plans are available. However, the Indian Dental Association has plans to bring out a comprehensive Indian dental insurance scheme in the near future.
Despite increased awareness in certain regions in India, most consumers are still unaware of the importance of oral care and the benefits in seeking professional care on a regular basis. For example, the National Oral Health Programme found that only 50% of Indians use a toothbrush. Consumers are also largely unfamiliar with the solutions that modern dentistry now offers, including recent the advances in pain management that have made dental treatment far more tolerable than it used to be.
The market is characterized by a gross imbalance in the distribution of clinical skills across urban and rural areas. In 2013, the dentist-to-population ratio in urban areas was 1:10,000, whereas rural areas have one dentist serving a population of roughly 250,000 people in the same year.
Though a number of domestic product manufacturers are supplying quality dental equipment and materials, many clinics still see the need to import the equipment and technology they need. Additionally, standards for oral healthcare are not quite what they should be. The Dental Council of India has proposed changes to the Clinical Establishment Act that, once approved and implemented, will improve the minimum standards required for dental clinics in India. The National Accreditation Board for Hospitals and Healthcare Providers has also established guidelines that will standardize processes and achieve higher standards for the delivery of dental care.
Clove Dental operates according to the highest international clinical standards and respects the guidelines established by the Indian Dental Association, as well as the American Dental Association and the U.S. Food and Drug Administration. However, not all dental clinics operate by these standards.
How geared are you to face the challenges?
Though we have certainly faced challenges in introducing this new standard for dental care, we are confident that we are on the right path. Challenges are unavoidable when you are building something new - that is inherent in the start-up process. But we are trying to do something different, and when you are working to raise the bar in a particular industry and introduce something new to consumers, the challenges are even greater. We've been diligent and persistent from the outset, and we have never cut corners or compromised our values and principles in order to meet our objectives. We know that consumers not only appreciate, but demand a transparent, ethical and honest approach, particularly in healthcare, and we will stay true to our principles, right down to the very last clinic.
What are your capex plans? How would they be funded?
We have raised over Rs100 crore from international investors and will likely raise additional capital late next year or in early 2016. All these funds are in FDI and from investors that include some of the world's leading dental surgeons.
What is the ownership pattern of the company. Are you looking at selling stake?
We are currently a privately held company and are not planning to sell the company or do an IPO any time in the near future. Our focus is to build a sustainable ethical company that will serve our patients and their kids and grandkids for years to come.
