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Many a business success story has inspired an entrepreneur to strike out on his own. So it seems a little odd that someone would set up shop on the basis of a business idea that flopped.

But that's exactly what Celki Medical Company founder Raymond Choi did. And in just 13 years, the company has exploded from a one-man band into an international firm employing over 100 staff. In recognition of its success, and testimony to its service, the company won the 1999 Innovation Services Award.

Established in 1987, Celki was the first company in Hong Kong to offer a home care service to patients, specifically a home respiratory service for patients with long-term lung diseases.

Mr Choi said it all started when he was working for a U.S. medical equipment company dealing with heart pacemakers in the mid-1980s. One day he received a call out of the blue from a distant relative in China saying that he wanted to buy some oxygen concentrators.

"I had no idea what an oxygen concentrator was," Mr Choi said. "He had heard about oxygen concentrators and thought they would be big business in China, so he said he wanted to order 2,000. So I said fine, let me find out."

Mr Choi went to the University of Hong Kong, talked to a professor of medicine there and was told that the oxygen concentrators cost about HK$40,000 each.


Mr Choi recieves the 1999
Innovation Services Award.

"So I thought, 'great, I'm going to be rich'," Mr Choi said.

The professor gave him a journal and told him to check the advertisements for what he wanted. Mr Choi said he wrote to all the suppliers but only one company replied.

"The others must have thought I was crazy. But one guy responded and went with me to China many times during a two year period, and the order of 2,000 went down to 200, to 20 to 2 and finally to 0," he said.

During this time Mr Choi had developed a close relationship with the supplier who had taught him about oxygen concentrators, how they are used in the U.S. and why, until one day he asked Mr Choi why he didn't start renting them in Hong Kong?

"So that's how I started. My first oxygen concentrator was rented to a patient referred from the Queen Mary Hospital, from the doctor who gave me the journal," he said.

When Mr Choi established his business in 1987, oxygen therapy was not widely used here. If a patient needed oxygen, he had to check into a hospital, breathe oxygen and after a few days he'd feel better and go home. After a few weeks he'd feel rundown and have to go back to the hospital.

"But in the 1980s, some trials were conducted which proved that if patients with long-term lung disease took oxygen long term -- 24 hours a day, for one year -- their quality of life improved, and their life expectancy increased. Because of that study, oxygen therapy became an excepted therapy in the medical circles and it became much more common," he said.

Even so, the high cost of HK$40,000 for oxygen concentrators in 1987 meant that buying one was out of the question for most of patients, who were often poor or old. Instead of trying to sell them, he rented them out for HK$1,000 a month, and by buying large quantities, managed to halved the price of units.

A few years after renting out machines, doctors were finding that his company was providing a necessary service and arranged with the Social Welfare Department for patients to claim the rental cost back as disability allowance, and that's when his business really started to take off.


Expanding
Out of Hong Kong's population of about 6 million people, 10,000-15,000 patients should be on oxygen therapy. That represents a potential market of about HK$150 million a year for the rental of oxygen therapy. But Mr Choi said he only gets about a quarter of that number, mainly because people dislike being hooked up to the machines.

To reach and service patients, Mr Choi said he had to develop an extensive immediate-response infrastructure service through working with hospitals, sending people overseas for training, and developing an oxygen therapy programme in Hong Kong.

"At the beginning it was very slow, but once the structure was in place the doctors would just say this guy needs oxygen and then send them to the pulmonary rehabilitation unit to train them on the use of equipment and the disease. They would also work with us on the training before sending them home, and about home service," he said.

In 1986 no hospital had a pulmonary rehab unit. Today 25 to 30 hospitals have a unit, he said.

About eight years ago, Celki started offering other equipment to ease breathing problems, such as sleep apnoea, which he said is proving to be very popular and, "like a miracle cure for those who use it," he said.

He has also took up where his distant relative left off some 13 years ago by establishing an oxygen concentrator rental service in the mainland. And like Hong Kong, he is working with hospitals there to establish the necessary infrastructure and training.

China's vast size, however, presents far greater logistical problems. He has set up five major offices in China and sold one plant to a hospital to produce its own oxygen. Response from doctors and hospitals to recommend patients with breathing problems use the machines has been favourable. But because economic reforms in China means regulations are constantly being rewritten, it is hard to keep up with the changes.

But Mr Choi said he isn't going to give up. Like Hong Kong in the 1980s, he recognises there is a dire need for such services in the mainland. Though the market poses more challenges than the Hong Kong did, the potential rewards are also far greater.
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