Fortis Healthcare looks at south for expansion

11 April 2007

Chennai: The New Delhi-based Fortis Healthcare Limited is looking at Southern cities like Chennai to set up hospitals. Present mainly in the national capital region, Fortis Healthcare is expected to have a southern presence in six months time. The company has 11 hospitals under its fold out of which 7 are in the national capital region. Fortis Healthcare is coming up with couple of more hospitals in the northern India.

According to executives, there may not be much of a difference in the operational costs of hospitals in Delhi, Mumbai and in Southern metros. But the lower land cost and also the salary levels in South would give higher profitability.

A southern foray will be relatively peaceful for the company that is bogged down with several court cases questioning the ownership its own name and its usage; the ownership and occupation of the land in which Fortis hospitals are located; and the acquisition of the Escorts hospital.

Group company Ranbaxy Holding Company owns the name Fortis and the logo and Fortis Healthcare pays Rs1 lakh per year as licence fee to Ranbaxy Holding for the right to use the word ''Fortis'' and the logo.

Further, Fortis Healthcare is facing a case in the Delhi High Court filed by Fortis N V, Fortis SA / NV and Fortis Bank (all engaged in banking and insurance activities) asking for permanent and interim injunction to restrain Ranbaxy group from using the word ''Fortis''.

On its part Fortis Healthcare and two other group companies - Fortis Financial Services Limited and Religare Enterprises Limited have filed a case in the Delhi High Court against Fortis N V for a permanent and interim injunction seeking to restrain its use of the ''Fortis'' name to carry on finance, insurance and investment related businesses in India. The Ranbaxy group companies have claimed ownership to the name ''Fortis'' and also damages of Rs2 million for loss of reputation.