RenaCare Dialysis Clinic Business Plan › Section 4 › Market & Customer Analysis

4.1 Target Market Segmentation

Renacare’s addressable market segments along three primary
dimensions: payer type, disease acuity, and geographic proximity to the
clinic. Across all three dimensions the Company will target the most
commercially attractive and clinically appropriate patient population:
insured adults with stable ESRD requiring maintenance haemodialysis
three times per week, living within a 45-minute travel window of the
flagship clinic.

Primary segment — Medical aid funded patients

Approximately 62% of Year 1 revenue will be derived from
medical-aid-funded patients. This segment benefits from PMB protection,
consistent reimbursement tariffs, and high patient adherence rates
driven by the severity of the underlying condition. The priority schemes
for network inclusion are Discovery Health (South Africa’s largest open
scheme), GEMS (the government employees’ scheme, with more than 2
million beneficiaries), Bonitas, Momentum Health, and
Medscheme-administered schemes including Bankmed and Fedhealth.

Secondary segment — Public-private partnerships

Renacare will actively pursue partnerships with the Gauteng
Department of Health to treat overflow public-sector patients on a
per-session reimbursement basis. The Limpopo public-private partnership
at Pietersburg — in which the Limpopo Department of Health has
reimbursed a private partner for dialysis services since 2006 — provides
the operational template. PPP revenue is typically priced at a discount
to open medical scheme tariffs (approximately 15 to 20% below) but
offers the advantages of guaranteed volume and simplified billing.

Tertiary segment — Private pay & gap cover

A small but growing segment of patients pay directly or through gap
cover products. Private-pay patients include those on lower benefit
options that have exhausted their annual dialysis limits, self-employed
individuals and patients from SADC countries travelling to South Africa
for care. Tariffs in this segment are lower than private medical aid
rates but require no claims administration, improving cash collection
timing.

Quaternary segment — Hospital acute dialysis

Renacare will offer 24-hour on-call acute dialysis services to
hospitals within its referral catchment. These include patients
presenting to emergency departments in acute renal failure,
post-surgical patients requiring continuous renal replacement therapy,
and ICU patients requiring intermittent dialysis. While volumes are
lower than chronic dialysis, acute contracts provide high-margin
supplementary revenue and strengthen referral relationships.

Figure 4.1

4.2 Customer Profile

The demographic profile of the Company’s typical patient, based on
the latest SARR private-sector data, is as follows:

4.3 Geographic Catchment Analysis

The flagship clinic will be sited in a Gauteng Province location
selected on the basis of a multi-factor catchment analysis. The
assessment weights the following factors: population density of
medical-aid members (30%), proximity to referring hospitals and
nephrology practices (25%), competitor density (15%), proximity to major
road arteries and public transport (15%), availability of Grade A retail
or light-commercial property with three-phase power and water capacity
(10%), and socio-economic indicators (5%).

Three candidate locations have been shortlisted: Sandton/Morningside
(Johannesburg North), Pretoria East (Menlyn/Faerie Glen) and
Benoni/Boksburg (East Rand). The final site selection will be ratified
by the Board within 60 days of funding close.

Catchment evaluation — shortlist scoring

The preferred location is Sandton/Morningside on the basis of the
highest weighted score. Pretoria East remains the reserve candidate and
the preferred site for the Phase 2 clinic.

4.4 Market Entry Strategy

Renacare’s market entry strategy is anchored on three
pre-commissioning activities that together ensure the clinic opens with
a clear path to utilisation rather than an empty waiting room:

• Medical aid DSP accreditation secured for at least three major
  schemes before patient admission, ensuring patients can be billed on Day
  1 of operations.
• A structured referrer engagement programme, led by the Medical
  Director, targeting every nephrologist practising within 20 km of the
  clinic. Each referrer will be visited personally, briefed on clinical
  protocols and given direct access to the clinical team.
• Partnership agreements with two major hospitals in the catchment
  area under which Renacare provides acute dialysis services and receives
  step-down chronic dialysis referrals.

4.5 Barriers to Entry & Defensibility

Once established, a dialysis clinic with DSP accreditation and
referrer relationships enjoys significant defensibility. The principal
barriers that protect Renacare’s market position are:

• Regulatory: facility licensing, DSP accreditation with major
  medical aid networks, and HPCSA/SANC clinical registration collectively
  represent a 9 to 12 month lead time for any new entrant.
• Capital: the R15 million minimum capital required to launch a
  20-station clinic is a meaningful deterrent to informal
  entrants.
• Clinical: dialysis is a high-acuity therapy. Patients
  overwhelmingly remain with their first clinic unless there is a strong
  reason to switch. Switching costs are real — disruption of nursing
  relationships, vascular access transfer, and psychological
  adjustment.
• Network effects: each referrer relationship compounds over time;
  established clinics benefit from a positive feedback loop between
  patient outcomes, referrer trust, and new referrals.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of RenaCare Dialysis Clinic (Pty) Ltd.