Ramin Fallah is CEO and a co-founder of Fanavari Azmayeshgahi company. He is a successful entrepreneur and businessman in importation of medical and laboratory equipment in Iran. We have interviewed with Ramin Fallah about common challenges and problems of Iran economic and the future of medical equipment industry.
We have to thank you for giving us your time; we know that you are so busy.
What is the global rank and level of our country in medical equipment?
Fortunately, we have witnessed advancements in some fields. However, thoughtfully speaking, we should not expect our country to be completely independent and autonomous. Probably, it is not economic to be completely self-sufficient. As you know, Germany, Japan and America are both great manufacturers and importers. There is an economic ration behind this trend.
Is it possible to localize the production of medical and laboratory equipment? What stages and phases should be passed to reach the so-called possibility?
Not now, unfortunately. However, as soon as we get rid of the sanctions and reach the possibility of fairly competing in domestic and international markets, we would witness great advances in this field.
This industry is developing but real development depends on producing high-quality products verified by physicians and health-care centers. Copy-based production of low-quality products is not accepted at all. Under the current circumstances, we cannot expect a promising future unless fundamental changes occur and accurate plans are codified.
In your opinion, are our universities effective enough to make us hope for independence and self-sufficiency in medical and laboratory equipment?
There is no support, investment or minimal encouragement for us in this field. On the other hand, given the great variety of these products, future supports will have far long ways to lead into fruits.
What is the role of physicians in development of medical and laboratory equipment?
Optimally using new equipment, they can provide the patients with the highest levels of services and treatments. However, it would be only possible if good trainings, full understanding and ability to use the most updated achievements are accessible. Active companies in this field are responsible for providing these preparations.
Moreover, establishing research centers and unbiasedly development to attract the physicians’ and craftsmen’s participation are necessary and important. However, the physicians should not ignore their professional nature and also, they are supposed to prioritize serving and treating the patients.
Given what you said, it seems that we should focus on importation; and you believe that mass production is neither possible nor cost-effective in our country. Am I right?
Yes, definitely you are. It would be only possible if some special events occur in macro policies of our country.
Is importation also problematic?
Lack of return on investment, impossibility of paying the payments to the manufacturer companies due to sanctions, not allocating currency at official rate to medical equipment, purchase budget deficit in public and private clinics, instability of currency market, multiple rates for currency and sanctions and their influences on foreign companies’ behavior are some of the problems importers experience.
You talked about currency rate which is a hot topic in our country. How did and will it influence good importation?
Currency rate has had a negative impact on importation so that it has disabled many centers to purchase and consequently, a lot of deficits appear in those centers. The health-care centers have been already in great and significant debts and it is not clear how long does it take to settle the liabilities. The tariffs are constant but the prices of equipment are increasing due to twofold rise of currency rate. This might lead to bankruptcy of some private hospitals and companies.
Unfortunately, the companies are under pressure to distribute the imported goods with constant prices (despite of currency rate and expenses increase). Moreover, the hospitals do not pay on time. Therefore, the companies are in a critical and hard situation and they have no bright future. Under this condition, serious changes are required.
What about sanctions? Are sanctions directly imposed on medical equipment? If yes, how is it possible to fight against them?
Yes they are imposed on a limited number of groups of medical equipment and they directly or indirectly influence them. These sanctions are limiting because they may prohibit the trainers or coworkers of a company from traveling or restrict issuance of educational certificates. On the other hand, the sanctions imposed on banks are also, confining. Unfortunately, there is no fight plan against the sanctions. From a legal perspective, we cannot do anything influential. Sanction is an inhumane phenomenon fighting against which would only be possible if our power is equal to the sanctioning governments’ power.
In your opinion, what is the greatest challenge of an entrepreneur in Iran?
Constant changes in the government’s policies regarding currency rate, importation regulations, customs regulations, legal prohibitions for different processes, lack of governmental support. These problems prevent us from codifying a long-time plan. Another important problem is low quality of the trained human resources.
As an entrepreneur, what do you expect from the government?
In my opinion, the government should provide us with a safe environment to codify a (/an at least) three-year plan for businesses. Facilitation and stabilization in importation (customs) regulations are really important. Moreover, the government should give up unnecessary rigors and crackdowns for the reputable and active companies serving our country.
Stabilizing the rate of currency allocated to medical equipment may be another helpful tool.
Establishing and helping educational institutions to teach administrational and technical skills and English language to human resources are also good suggestions.
If the government does not take any step towards these objections, it can at least stop prohibitions and refuse to compete with private sector. The government should take a realistic view to this field and support the importers as long as they import standard and high-quality products for the market. Moreover, the government can support rational cash flow as a ring of the whole chain of medical equipment distribution and also, facilitate the expensive processes of importation and distribution. It should be noted that administrative affairs in the mechanized governmental sectors are sometimes disrupted or disturbed and they consume a great deal of the importers’ time and energy. So, the problem needs to be attended and addresses.
What are the most major problems in your work?
Budget deficit in Ministry of Health and Medical Education.
Heavy debts of medical centers (so that in our company, a 10-member group is established to address these issues).
Lack of currency allocated to medical equipment (which is definitely a necessity).
Continuous changes and variations in the systems of Medical Equipment General Administration and unnecessary rigors (leading to loss of opportunities).
What should entrepreneurs do in order to manufacture medical and laboratory equipment inside the country?
Initially, several unbiased R&D associations for medical equipment should be established by the guilds in order to link expert physicians with the industry. Second, fair and just competition between domestic and foreign products is necessary.
Is it now possible for the entrepreneurship sector to enter this area?
No, it is not possible. However, different new groups enter this area every day and unfortunately, they lose all their investments.
Other than your partners, who else did help “Fanavari Azmayeshgahi” company to reach its current position?
We always believe in three important principles:
Skillful and hardworking human resources
Reputable and authoritative companies
We have considered this combination, frankly worked hard and trusted in God to reach our current position.
Moreover, our colleagues’ efforts and the partners’ brevity were also really helpful.
How much of the industry is governmentalized? Are there any governmental firms that themselves import their required equipment?
Yes, there are some governmental entities that are somehow competing with the private sector.
Some firms establish different businesses to import equipment. However, it would be really dangerous because importation of medical equipment is a special and professional affair and those firms might not be specialized enough.
What are the roles of guilds and unities in supporting the importers?
Generally, guilds can play important roles if all the companies participate. The most important roles of the guilds are: 1) creating intimate relationships between the companies in order for their voices to be heard and their messages to be received by the authorities so that the importers can be provided with governmental aids and grants; and 2) sharing successful experiences of the companies, especially in critical conditions.
To what extent are our medical and laboratory centers updated and effective?
Fortunately, medical and laboratory centers are using updated information and knowledge of this field and according to the fact that several experienced professionals are working in those centers, it would be possible to expand the knowledge and information.
However, in some small medical centers, regulations are violated and medical equipment (especially disposable instruments) are overly used. The main reason is high costs of medical equipment. Recently, the centers have begun to use low-quality disposable equipment and accessories due to cash problems and this would be a treat to the patients’ health.
How many of your customers are from private sector? Do you prefer private sector or governmental firms? Please tell us about the reason of your choice.
The statistical figures differ in different equipment categories. However, we can estimate that about 40% of our customers are from private sector.
Private and governmental sectors, each, have their unique advantages and disadvantages. In some contracts, private sector is more committed to the terms and conditions. However, it would be really uncertain and risky to work with it.
When contracting with a governmental firm, any commitment of the provider company must be written and it is compulsory. Sometimes, governmental firms are more responsive and reputable. However, the payment conditions for the governmental firms are usually more annoying.
And the last question;
Since 1983 and when you entered this field, what has experienced the most intensive changes and transformations?
Currency rate, purchase methods, regulations and terms, investment cost (due to withdrawal of the universities in direct importation) and increase of the companies’ warehouses volume.
Thank you for giving us your time.