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EF: Can you elaborate on the financial performance of Fujifilm?
TK: Two weeks ago, our headquarters disclosed the 2021 fiscal year financial result and our revenue for the last fiscal year was 2.5 trillion Japanese yen (around USD 21 billion). Our operating income was approximately USD 1.9 billion, indicating the scale of our company. Healthcare revenue represents 32% of the revenue, which in financial terms is around the estimation of eight hundred billion Japanese yen (USD 6 billion), and our future global target is to achieve USD 8 billion by March 2027. Healthcare is one of the biggest contributors to our operating income, with 38% from healthcare.
When people think of Fujifilm, they think of a photographic company, but it represents only 13% of the business; the biggest contributor is healthcare, a considerably fast-growing industry business. The growth is about +15% per annum. If we compare this with 2019, we have not only recovered from the COVID situation, but the operating income is at a historical record high, a fantastic feat considering Fujifilm was established in 1934, 88 years ago. The overall healthcare growth is close to 40% and continues to grow, contributing around 100 billion Japanese yen in operating profit in FY2021.
EF: 2020 was the year of diagnostics, and 2021 was the year of vaccines; what will 2022 be the year of?
TK: Post-COVID-19, a recovery is expected. Today, 50 to 60% of our employees come into the office every day. The rest work from home and this is a model for the future. In South Africa, we are still fighting COVID-19 in some regions and we are trying to register certain innovative devices. For example, our Xair portable x-ray machine weighs 3.5 kg, with a rechargeable battery and, for the patient's benefit, a minimal x-ray dosage. The x-ray image has the utmost accuracy, but the regulatory agency takes its time to approve certain products.
I have travelled to Botswana, where a PCR test is no longer required for a fully vaccinated person, which will be the norm in the future. For the people who do get COVID-19, rapid treatment and rapid detection tests will still be of importance in the future. Quick detections provide good treatments to patients and will become more important over the year.
EF: How can the industry ensure non-communicable diseases get the attention and treatments required?
TK: We should offer patients detections and screenings. For example, RD detection and screening were not popular in India originally, and education played an important role. We released information for the patients on the importance of RD detection and screening, making it a quicker and offered affordable process. In 120 minutes, we can do a full patient screening, CT MRI, x-ray, ultrasound, endoscopy, and haematology. We attend and have the results on the same day.
Artificial intelligence supports our technology and assists doctors with a quicker analysis, benefiting the doctor, the hospital, and the patient. We are now introducing new screening systems in India and have established a healthcare screening centre (NURA) in Bangalore, India, in February 2021. Our system has been tested in Japan, and we are now expanding the screening centres to Mumbai and Delhi in India because we are aware of the importance of RD detection and screening to battle cancer. RD detection favours patients, governments, and doctors; it saves lives and keeps costs down.
EF: Could you elaborate on the importance of medical education and the benefits of artificial intelligence for the physician?
TK: The stakeholders, the government, hospitals, and doctors must understand the importance of the added value of AI; it helps the patient and makes the doctors' and hospitals' jobs easier to do. Most doctors are aware that our AI technology can provide considerable assistance in diagnosis. For AI technology to penetrate the medical industry, education is essential. We have educational programmes to teach technology users how to understand its role and use the technology.
For example, in Zambia, we are trying to introduce our AI system in a middle-sized hospital in Lusaka. The Japanese government donated the X-ray system, but radiographical skills need to be developed to operate the technology. A Japanese organisation called JATA, which fights TB and has offices in Zambia, is working jointly with the Japanese government and doctors to introduce our AI solutions to the hospital. We are training doctors in Zambia, and in one month, we will introduce AI solutions in Zambia.
EF: Could you elaborate on the portfolio performance of Fujifilm South Africa?
TK: In March 2021, we acquired Hitachi Healthcare, one of the bigger medical equipment companies in Japan, and changed its name to Fujifilm Healthcare. Fujifilm South Africa provides equipment, healthcare, and IT technology systems, which include RIS, PACS Ai, 3D and HIS, plus we supply consumables and spares for all equipment, although the distributor imports directly from Europe or Dubai. We have an extensive line of equipment, including CT, MRI, endoscopy systems, and X-ray machines covering a very broad base.
EF: What is the strategic importance of South Africa to Fujifilm globally?
TK: Fujifilm is divided into four regions - the US market, Asia Pacific, the European market and Middle East & Africa. [Taro Kawa4] The Middle East & Africa region headquarters is in Dubai, with two big branches, Turkey and South Africa, and many smaller support offices in Egypt, Tanzania, Ethiopia, Nigeria, etc. The biggest office on the African continent is in South Africa. We employ over 60 people in South Africa and manage all South African regions, essentially the English-speaking area. Our regional headquarters' expectation is to expand medical equipment, healthcare, IT, and solutions in our region.
In terms of product development for the region, we work closely with the other regions and develop those products for Africa.
EF: With healthcare as a fundamental factor in the success of Fujifilm, what is the role of the company in driving medical technology innovation in South Africa?
TK: Considering the GDP of the Southern African regions we cover, 75% comes from South Africa, with 25% from the surrounding countries. We first have to establish our solutions in South Africa and then expand our experience to other countries. I am hopeful we will succeed in the registration of our products due to the importance of our technology and solutions as they will solve many social problems in the region. For example, our Xair, an ultra-compact x-ray system, is equipment that would be new to South Africa. We can combine the Xair with AI and take this very small system anywhere to help with diagnosis in many different sites. It works on rechargeable batteries, and each battery lasts for a hundred shots (images), an easy way to do preventive medicine.
The Fujifilm technology, the mobile x-ray system, AI, and technologies around pathology, including pathology testing without wet chemistry (meaning one doesn't need clean water) - suit the African requirements. Fujifilm will contribute to all the African regions in these areas, not only South Africa. We can assist in improving the patient-to-physician ratio.
EF: As a Japanese company operating in South Africa and a new work environment, how does Fujifilm maintain the workplace culture?
TK: Post-COVID-19, many Japanese companies are expanding in South Africa, including Fujifilm, specifically in the healthcare space. The biggest agenda to achieve is the Sustainable Development Goals 2030, and we have to contribute to this fight, whilst also maintaining focus on the African regions and expanding our solutions. We have new offices, and employees are not required to come to the office every day, so we have reduced the office space due to people working remotely. We have also increased our demo and trading centre space. We do business differently; we have a graphic printing business, a photographic business and a medical business. Our sales force visits customers and reports directly back to be more efficient. Our hybrid model adapts to a new and more flexible work style through digital.
The South African business culture and the Japanese business culture are similar. South Africans are hard workers, and COVID-19 has changed how we approach work-life in Fujifilm. We are empowering the staff to be able to work from home, we have become far more flexible. It will be the prevalent model going forward, and we will be using technology to collaborate rather than sitting around a desk in an office.
EF: In the ten years operating in South Africa, what have been Fujifilm's greatest achievements and what is the company most proud of?
TK: We established the company in May 2012, so we have just had our tenth anniversary, and last year in 2021, Fujifilm South Africa achieved its highest sales record. Our biggest contribution is the medical business and having introduced the first printing equipment. The jet press is a unique testing printing system, and we introduced the fast-editing jet press into the African continent last year.
Another big achievement is the business tender we got last year for the Healthcare IT System in Namibia, the biggest IT healthcare tender on the African continent. We are working on its installation in Namibia, connecting the five big hospitals in the country. They will be able to share patient images, and we will contribute to improved medical circumstances in Namibia. The work will take another six months before it is complete as it is a very big project.
We call it a vendor-neutral archive, and AI will assist with the patient diagnosis. In rural areas in South Africa, when a person does not feel well, they go to a clinic close by, and if the nurse tells them they need an x-ray, they then have to travel to a tertiary hospital in a city, taking a full day out of their lives with no guarantee of seeing a doctor. If the clinic could take the x-ray using the light Xair machine, the quality of life of that person would improve substantially. AI can identify if further specialist treatment is required, and only those patients get referred to tertiary institutions. The demands on tertiary institutions would drop significantly, allowing doctors to give more quality treatment to patients who need it, and the economic benefits are considerable. We are passionate about this subject at Fujifilm.