SOURCE: Kalorama Information

Kalorama Information

June 27, 2011 14:40 ET

Rapid Consolidation Reshaping World Dialysis Market

NEW YORK, NY--(Marketwire - Jun 27, 2011) - The dialysis industry is consolidating at a rapid pace as the top players attempt to expand their networks across the globe. A robust $67.5 billion business, the dialysis market has managed to fuel its growth engine with 5% to 6% growth per year in the past 5 years, according to Kalorama Information. In its new report, "World Market for Dialysis Equipment and Services," the healthcare market research publisher finds the bulk of these revenues are for dialysis care services, which has led global dialysis equipment providers to enter the services segment through acquisitions of smaller regional players.

Dialysis patients are high-value customers, costing an estimated $34,000 per year on average. They are a relatively stable customer base which explains how the dialysis industry is noncyclical in nature and is only minimally affected by the vagaries of economic downturns. And despite a relatively small customer base of just over 2 million patients worldwide, the industry has attracted a large number of players, especially in the highly fragmented services segment, which is made up of mostly regional companies.

"Four global players account for about a third of the total market and the rest is occupied by regional companies," said Bruce Carlson, publisher of Kalorama Information. "The industry is consolidating rapidly, with the top players expanding their network across the world in terms of dialysis services offerings."

According to the report, Fresenius is the leader in the dialysis market and will continue to dominate the scene owing to its vast product line and vertical integration into the lucrative dialysis care segment. Fresenius is followed by DaVita, Baxter and Gambro. The rest of the market is primarily in the hands of regional players.

Consolidation has become a recurring theme in the dialysis sector. Between 2005 and 2011, several structural changes occurred in the industry. Gambro exited the North American dialysis care market by selling its dialysis care division to DaVita, Inc. and Fresenius bought Renal Advantage Inc. to maintain its leadership in North American dialysis care. The company also acquired Hema Metrics Crit-Line system business in early 2011. In 2009, Baxter acquired Edwards CRRT a provider of continuous renal replacement therapy.

"The top players are following the two-pronged strategy of rapid geographical expansion and vertical integration of product and service offerings," said Carlson.

Kalorama Information's report, "World Market for Dialysis Equipment and Services," examines in detail both the dialysis products industry with its demand structure and major trends affecting it, and the services industry and its composition. Profiles of the major competitors are included, along with key market data and growth forecasts.

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