Dental clinics are aplenty in Singapore but most of these clinics are owned and operated by the dentists themselves. That means the owner of the clinic needs to attend to patients and manage the administrative and financial aspects of the business as well. This is also the main reason why so many of these clinics are unable to scale up or offer a proper career path for their staff.
This is where local dental group Oracare steps in and provides dedicated corporate functions such as human resource, operations, marketing and communications to support the clinics.
“With that, the dentist can focus on their first love, which is being a dentist first. They can better concentrate on attending to their patients and in some cases even mentor younger dentists,” says Leon Luai, CEO of Oracare, who believes there is a very good business and investment proposition between Oracare and the other entities under the group.
Oracare is a holding company that was started by White Cloud Capital, a private family investment company that invests in fast-growing companies in healthcare and industrial services and technologies. Apart from Oracare, White Cloud’s other healthcare group currently under its portfolio is the chain of high-end veterinary clinics in China called Doctors Beck & Stone.
White Cloud has invested significant capital into creating and developing Oracare over the last five years, expanding through both greenfield developments and M&As to create one of the largest dental groups in Southeast Asia.
Luai says thanks to White Cloud’s support, Oracare has managed to evolve into a business with international standards of clinical and corporate governance led by a professional management team and infrastructure to support its continuing expansion and, most importantly, the dentists.
“It is good clinical practices and patient outcomes that drive good business results, not the other way around,” says Luai, as he reiterates that by allowing dentists to better focus their attention on patients and provide better care, naturally, the patients will come back and positive word-of-mouth will spread.
“Oracare was created as a holding group to represent a further important step into the professionalisation of the [dental] business … The model is based on being stronger together,” adds Luai.
Expanding its regional foothold
In February 2019, Oracare acquired a majority stake in MOS Dental, the second largest chain of dental clinics in Bangkok, Thailand. This brings the total number of clinics across Singapore, Thailand and Indonesia to over 40.
Clinics under Oracare now include brands such as Family Dental Centre and Expat Dental in Singapore, MOS Dental in Thailand and Tawa Dental in Indonesia. There is also Singapore-based A2Z Dental and Medical Supplies that provides medical supplies and equipment to its dental clinics for better cost efficiencies.
Dr Adisorn Hanworawong, the founder and CEO of MOS Dental in Thailand, says since becoming part of the Oracare group in 2019, its footprint of clinics have grown by 64%.
“As a family-run business, we recognised that we were starting to reach a glass ceiling in terms of our capacity to grow coupled with increased complexity and operational issues that were starting to surface,” he says.
After joining Oracare, MOS Dental was given the support to implement and upgrade its professional systems and protocols along with a corporate infrastructure that has supported its subsequent rapid expansion from 14 to 24 clinics to date. MOS Dental intends to leverage Oracare’s support to plan further expansion within the country. “This has equipped our group to consolidate its position further as one of the market leaders in Thailand,” says Dr Hanworawong.
Luai explains, “Basically, there is a two-pronged approach to our business strategy. The first is very much like what we have done in Thailand, which is more centred on making a capital investment in a small chain of clinics and helping them accelerate the professionalism and performance of the clinic and then integrate them into the broader Oracare Group.”
The second strategy is a contracting model developed by Expat Dental under Oracare that allows it to have a more asset-light strategy as it expands across the region. “This model is very well established in countries like the US and is commonly known as the Dental Support Organisation (DSO),” he adds
This strategy is implemented in the group’s business in Indonesia, where Oracare provides clinical and business management support for existing clinic owners. “We help them build up their practice and run it as a very high performing dental clinic,” says Luai, adding that this model involves the group sharing the revenue with the clinic owner.
According to Luai, this is a great way for the group to better understand the industry in a new market before moving into the first approach, which is to invest in a chain of dental clinics. This also helps the group mitigate some risks involved in entering a new and unfamiliar market.
Adding on, Andy Cropp, CFO of Oracare, says, “The DSO model is also very exportable. A lot of that service can be provided remotely and hence it is quite a scalable proposition. And depending on the clinic, there will be a varying degree of support.”
Meanwhile, Oracare also has under its portfolio its medical supplies business.
In dentistry, the range of specialised medical equipment play a critical part in the provision of high-quality service and this has a direct impact on patient outcomes and satisfaction. Oracare hence invested in A2Z, which has obtained exclusive distributorship of quality consumables from leading companies such as German dental product brand VOCO and US-based Henry Schein Orthodontics. Apart from consumables, A2Z also distributes dental units (what the layman understands as dental chairs), x-rays and other scanning equipment.
“With the scale [of a number of clinics], A2Z can efficiently drive down the cost of all these consumables and equipment, allowing the clinics to reduce their costs on these products. This helps improve the overall profitability for the dental clinics,” says Luai.
Spreading the smile
Despite the Covid-19 pandemic, Oracare has managed to widen its network of clinics by adding another four more clinics last year.
“We are very proud of our progress last year and this year so far. We have also managed to achieve profitability across all businesses. But obviously, the levels have been impacted by the headwinds from the pandemic over the last 18 months,” says Cropp, adding that the group has managed over $30 million in revenue as at September this year, representing about 15% growth from last year.
“Hopefully, with some of the Covid-19 restrictions behind us, we can sort of operate on a more normal basis. With that, we expect our existing platform to deliver over $40 million in revenue by the end of this year and possibly over $60 million for the next year,” adds Cropp.
“A core focus for Oracare is the continuous enhancement of the overall customer experience for all our patients. While much has been written in recent times about the advent of digital health, we have been progressively digitising our processes for several years, with a primary focus on improving our customer-centric service. For example, developing our teledentistry capabilities to provide further convenience and optionality to patients. Additionally, we are continually investing in advanced equipment to improve treatments and deliver even better patient outcomes.”
When talking about digital dentistry, Luai explains it is not just providing a digital platform for doctors to consult their patients over video calls. This also includes high-tech scanners such as the Cone Beam CT scanners, which can give 3D imaging for very precise treatment planning as well as intra-oral scanners that mitigate the need for dental impressions and enable patients to see digital models of their teeth and expected changes to their smile as a result of the planned treatments.
Looking ahead, Oracare intends for the Expat Dental brand to expand into major tier-one cities in Asia, be it through the DSO model or opening new clinics through organic means, partnerships or acquisitions.
“In terms of expansion, we are looking closely at Thailand. We plan to add on a greenfield basis and make some acquisitions. In Singapore, we are focused on more on joining forces with partners and co-invest in existing groups,” says Cropp.
As most investors may one day exit their investment, Luai and Cropp are not discounting a possible IPO in the future. However, with uncertainties still looming over the ongoing pandemic, Cropp explains that the timeline, not just for its IPO but also for the group’s expansions, have been delayed. “Covid-19 has just highlighted that the best-laid plans can easily be blown away,” says Cropp.
“For now, the group intends to sharpen its focus and try to achieve its expansion goals by 2023 through internal funding. After this, we will start to look into other means of funding such as an IPO if that could help us accelerate our growth. But an IPO is not the end game for us,” adds Cropp.
Photo: The Edge Singapore/ Samuel Issac Chua