Johannesburg: Medi Clinic Corp Ltd is considering further expansion in the Middle East to boost its presence in the Gulf states, the new head of South Africa's second-largest hospital group said yesterday.

"Abu Dhabi is the next growth area and we are keeping our lines in the water and there are opportunities there," chief executive officer Danie Meintjes said in a telephone interview on his first day on the job.

Meintjes, who has been with the company for 25 years, replaces Louis Alberts, who expanded the Cape Town-based firm into Europe and the Middle East through company-transforming deals.

But Meintjes said there were no plans for such "quantum leaps" in the near future.

"Growing the company on an incremental basis is what we would like to see," he said.

In addition to operations in Namibia, Switzerland and its core market of South Africa, Medi Clinic also runs two hospitals and four clinics in the Middle East.

Government hospitals

However, the company needs to get its Middle East businesses into the black before concentrating on expansion, said Mathew Menezes, an analyst at Avior Research in Johannesburg. "Throughout the UAE and the Middle East there are certainly opportunities for them, but that's a long-term plan because they first [have] to get their Middle East operations profitable," he said.

Medi Clinic's Middle East operations posted a loss of 19 million rand (Dh9.51 million) in the six months to end-September, hit by costs from starting up a new hospital.

The company has a market value of about 15.9 billion rand, while larger rival Netcare Ltd is worth about 18.9 billion rand.

Shares of Medi Clinic are up about five per cent this year, outperforming a 4.4 per cent decline by Netcare.

There may be opportunities to manage government-run hospitals in Dubai and Abu Dhabi, but the idea has not been formally discussed and is still in a conceptual stage, Meintjes said.

"With our knowledge in the Middle East we believe it is an opportunity and it will require very little capital, and that is something that could be in the radar screen in the future," he said.

Meintjes also stuck to his predecessor's view that there were few opportunities for more expansion in both South Africa and the rest of the continent.

The company has more than 7,000 beds in more than 50 hospitals in South Africa and Namibia, but Meintjes said it has not found a market in other African countries, where private health care is beyond the reach of most consumers.

Rivals

But Avior's Menezes said the company could be overlooking opportunities close to home, where rivals NetCare and unlisted Life Healthcare have been working with the government to build and manage hospitals.

"Medi Clinic has neglected South Africa as a venue for growth in terms of private-public partnerships," he said.

"We've seen competitors like Netcare and Life Healthcare pursuing those opportunities and they've done so quite effectively. So I'm not sure it is entirely prudent to say South Africa is devoid of growth opportunities."