General Electric takes long-term view One of the largest

He significance of GE’s focus on the region is that for the first time in the GE’s history, a vice chairman has been placed outside the United States, John Rice, President and CEO, GE Global Growth and Operations, according to GE ASEAN CEO Stuart Dean.

“This region is one of the most open parts of the world to trade and investment. ASEAN is a great place for global companies like GE to do business. ASEAN is less vulnerable to what’s going on in Europe. We’re seeing some slowing in the ASEAN area, but there’s still a high priority for ASEAN,” Dean said.

GE hired a thousand people in the ASEAN countries during 2011.

“That will pay off in the next three to five years,” Dean said.

“We’ve been in some countries for a hundred years, but only in Cambodia for four or five years. We’re in for the long term as the country grows and develops we are going to look for partners and suppliers who produce on a life cycle basis, want to get diversified from their supplier base, and get low cost financing. I think quality and life cycle are both very important. We sell and finance equipment,” he said.

Sector wise, Dean said electric power had enormous opportunities.

“Smaller biomass power plants make a lot more sense than building huge power plants and electrical lines over the country.”

Dean said GE works with the government in every country in the world where they operate.

“We help them structure the power distribution system. In a country with a lot of rural areas, distributed power, is a more affordable way to power,” Dean said.

General Electric has been supplying Cambodian government hospitals with medical diagnostic equipment in a special program.

“Typically all the big cities of ASEAN have very good high quality health care services and have good diagnostics, but as you get outside the big cities, health care has to be improved,” he said.

“We are beginning to develop and introduce smaller portable hand held equipment like a hand-held ultrasound machine. This does the basic work so a general practitioner can identify problems before they become an emergency. That’s an exciting development and will be very relevant for Cambodia.”

Dean said the GE profile in Cambodia had been elevated and that the heath care equipment business was important, although not as big as electric power and aviation.

“Last year, we built a focused strategy on growing in the emerging markets and the commodity-rich markets.”

Dean answered some questions for The Phnom Penh Post:

Of all the 10 ASEAN countries, which one represents the largest in terms of GE operations?

We have been in ASEAN for over 100 years and have a strong regional footprint in Indonesia, Vietnam, Malaysia, Thailand, Singapore, Brunei, Cambodia, the Philippines and soon Myanmar. Our largest revenue generators to date are Malaysia and Indonesia, while our key focus markets, where we see strong growth potential are Vietnam, Indonesia and the Philippines. In ASEAN, we recorded total revenue of about US$3 billion in 2011. Looking ahead, growth remains robust in line with the resilient economies of the region.

Does GE manufacture any equipment in the ASEAN countries? If so, where and what?

Our Hai Phong wind power production plant in Vietnam manufactures wind turbine components which we then ship to GE wind turbine factories worldwide. Setting up of this plant was in response to growing global demand for clean energy. It is our first manufacturing facility in this northern port city. We produce generators for 1.5MW wind turbines.

GE Malaysian Appliance Components based in Malaysia manufacturers high volume electro-mechanical controls used in electrical protection and controls applications in higher end refrigeration and air-conditioning units which are exported to customers in the USA, Middle East and Asia. We manufacture lighting products in Yogyakarta, Indonesia, approximately half of which are exported.

How many people does GE employ in the ASEAN countries?

We have approximately 7,000 employees across eight countries. We expect to see more of our resources mobilized to countries where we see faster growth. Makes good sense here as we can than better leverage on our resource base aligning this to project requirements or needs in the different countries.

In what sectors are the most GE activities in the ASEAN region? Power plants? Water? Medical equipment?

Our largest revenue generators are energy (including oil & gas) as well as aviation. We also see huge potential in our healthcare and transportation businesses which are smaller, but fast growing.

Where does GE have regional headquarters for ASEAN? What countries does that regional office cover?

Our regional headquarters is in Kuala Lumpur given its strategic central location making air travel more efficient besides cost optimization, productivity and being our biggest market in ASEAN. Our leader in Vietnam, Nguyen Mylan, covers Cambodia.

What are GE's plans for Cambodia? Are there any thoughts of setting up manufacturing here?

We have been in Cambodia since 2007 and our most current deal we announced just this week is a $3 million power station deal between Cambodia’s Soma Group and Indian company Ankur Scientific for a 1.5 megawatt rice husk power plant in Kampong Cham. Soma Group will be the power plant operator and Ankur Scientific, the largest biomass-to-energy solutions company in India, will supply and commission the plant including GE generators. Opportunities for renewable energy including wind are there and it is an encouraging development for us.

The other area is rural healthcare and equipping local hospitals with GE equipment. We have since 2010, worked with many public hospitals as part of our Developing Healthy Globally programme where we installed equipment and trained personnel. The aim is to improve access to quality healthcare in the developing world by addressing critical gaps in existing government healthcare facilities.

We have no immediate plans to set up manufacturing but are always open to such opportunity when resources and environment make good business sense to do so.

When you look at everything GE does from light bulbs to power plants, aircraft finance: how can we understand GE?

Perhaps the best way of capturing the essence of what we do at GE lies in our philosophy of GE works on things that matter. It is about the best people and the best technologies taking on the toughest challenges. Bringing to the market innovative solutions in energy, health and home, transportation and finance that enable us to build world-class infrastructure and improve lives. In short, solutions that make the world better.

The four pillars of the GE brand are Building, Powering, Moving and curing the world. I hope this helps in understanding what GE does. GE has a strong set of global businesses in infrastructure and finance aligned to meet today’s needs, including the demand for global infrastructure; growing and changing demographics that need access to healthcare, finance and information; and environmental technologies.

Innovation is a clear differentiator for us at GE which we believe can solve the world’s toughest challenges. Our ecomagination business strategy which helps us make sure we are working on things that are both economically and environmentally smart , has been a great success.

GE has committed to doubling its ecomagination investment and collaborates with partners to accelerate a new era of energy innovation. In our just released 2011 ecomagination progress report, we have reached more than $105 billion in sales and services since the launch of ecomagination in 2005.

For 2011 itself, ecomagination generated $21 billion in revenues from ecomagination products and services. We also invested more than $2 billion in research and development, progressing toward our goal of a $10 billion cumulative investment from 2010 to 2015. For GE operations, this will double operational energy efficiency while reducing greenhouse gas emissions and water consumption.

In Healthymagination which we launched in 2009, we focused on four critical needs namely low cost technology, healthcare IT, innovation accessible to all, and consumer-driven healthcare. GE has committed that by 2015 it will invest $3 billion in research and development to launch at least 100 innovations that will help deliver better care to more people at lower cost, provide $2 billion in financing and $1 billion in technology to bring healthcare information technology to rural and underserved areas.

Additionally, to reduce the cost of procedures that use GE technologies and services by 15 per cent and develop products tailored to underserved regions of the world. To reach 100 million more people every year with services and technologies essential for health. Our infrastructure businesses provide the products and services to help build the energy, health, transportation, and technology infrastructure of the new century.

Can you tell us what the fastest growing sectors of the GE economy are in the ASEAN countries?

For ASEAN, if we look at business sectors, our healthcare, oil & gas, transportation and aviation are the fastest growing, registering double digit growth. Country wise, I would say Indonesia, Vietnam, the Philippines and Myanmar. Despite global volatility, the economies in the region have forecast long term GDP growth of five to six per cent. ASEAN is well positioned for growth with its increasingly affluent middle class and the massive push to build basic infrastructure. The demand is for services or solutions and this stems from a more sophisticated customer base in the region.

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