WHAT TO EXPECT FROM 2022 THE HEALTHCARE SUPPLY CHAIN IN BRAZIL?

Written by: Gustavo Galvão

In the panels and debates that I have participated lately the most frequent question I am asked is regarding 2022 scenarios. Is it the year of the post-pandemic turnaround? What about investments in this scenario of uncertainty in politics and economy? What to expect from 2022? The fact is that today we have much more questions than answers, however I have repeatedly stated that  2022 will be the last year of the COVID-19 trilogy (2020, 2021 and 2022).

In 2020 we entered the cage very confident that we would have a good fight, but in fact we were knocked down in the first round not even knowing what had hit us! The pandemic pushed us out of our comfort zone and forced us to find new solutions, think outside the box, challenge our status quo. 2021 was the year of studies and projects. At Stark we took the time to revisit our strategy, adjust our course and gain strength. I believe that this moment of reflection was important for many companies that took the same path. Therefore, 2022 will be important to put into action what we have planned in 2021, so that in 2023 we may finally enjoy our harvest.

This period that we were upside down gave us the opportunity to see things from a different perspective and this should guide the strategies that will help write the new chapter that will begin in 2023. As 4PL, from time to time we talk to and listen from the market and its players what they have to say. It is common sense that this sector request new technologies, new solutions and new commitments from the current players. One of the main challenges we have is to understand what the new Healthcare sector will look like and demand. Much has been said about the benefits of telemedicine, medical records and electronic prescriptions, homecare, e-commerce, etc. These are definitely market trends and many log-techs and med-techs have emerged as a promise for a totally different reality we haven’t experienced so far.  How much of this is market “flash in the pan” and how much is for granted? What is the timing for each solution? We’ve seen companies advertising the use of drones for example, but how much of that is operational? Anyone who can answer these questions will have a plain field to explore.  In our case we have designed different scenarios for each subsector of the healthcare sector. We believe that they will take their own and separate paths, with different demands.

Another important topic in 2022 is the inorganic growth. Stark has grown significantly these first two years and we are now talking to investment funds about funding for our fast-growing strategy in Latam.  I have talked with Brazilian, American and European funds and I see mainly European funds willing to go shopping in 2022. I believe that over the next years we will have some news coming from investment funds. So, is this a movement we can take for granted? How much is out there?

The answer is yes, but the amount invested will depend on a few important factors:

1. Brazilian political scenario: 2022 will be a year of election for president. The poll points again to a polarization between right and left wings, i.e…. more of the same. There is a possibility of a third strong option, however if they cannot mobilize in time, they will hardly have chances.

1. Macroeconomic scenario: apparently the promises of administrative, fiscal and political reforms won’t happen. Unstable exchange rate variation, rising unemployment and poor inflation control, high government spending, unfavorable trade balance, etc. bring an insecurity scenario to foreign investors. As long as political and economic insecurity exists, investments may be frozen or come on a smaller scale.

1. Opportunities: Regarding this topic I believe the region is doing fine. In Brazil, the healthcare industry market estimated at almost R$200bi still brings good opportunities. CAGR was double digits but now is estimated to grow only single digit until 2025. Nevertheless, everything can get better in 2023 depending on the outcome of the presidential election and how well we will get prepared in 2022. I do not expect large outsourcing projects and contracts inflationary price adjustments will be a major challenge. Therefore, we believe the market growth will come from the increase in volume brought by purely organic growth.

Having said that, I believe that investment will not cease but will be slower in the first half. It may catchup in the second half. On our side we will continue focused on technology and structure. As I said earlier the timing to invest and where to invest are critical points, so we have already started another round of conversations with the players of this segment to understand how they are positioning themselves. We intend to finish this work in January.

Finally, 2022 scenario shows a very interesting and healthy competition among Supply Chain players. New entrants stepping in, investment funds going out shopping, carriers gaining ground as local 3PL, large 3PL trying to offer valued added services and distributors gaining “footprint”, offering low operating costs, often supported by an efficient product sales strategy. On the other hand, I see the trend of B2C operations moving forward at slower pace.

Stark-4PL as a logistic integrator is and will always have in its radar screen the market movements to act neutrally and improve the life of the final patient through our integrated and innovative operations. Get prepared to sow in 2022 and to have a good 2023 harvest. A good year for everyone!