Immelt Bets on Energy, Health to Drive GE's $10 Billion India Sales Goal
Jeffrey Immelt, chairman and CEO of General Electric
Joshua Roberts/Bloomberg
Jeffrey Immelt, chairman and chief executive officer of General Electric Co.
Jeffrey Immelt, chairman and chief executive officer of General Electric Co. Photographer: Joshua Roberts/Bloomberg
General Electric Co., whose equipment generates about one-third of the world’s power, expects energy and health care to drive revenue in India to a $10 billion goal in five years, Chief Executive Officer Jeffrey Immelt said.
GE India is expanding at 30 percent annually, Immelt said in an interview in Mumbai today. “The country has a massive energy deficit,” he said. “They’re going to invest in a whole range of different technologies and GE is going to be able to participate in most of them.”
Immelt is among chief executives who met with President Barack Obama in India today as the U.S. leader seeks to double exports in the next five years. GE is adding U.S. jobs in businesses from power-plant turbines to jet engines and appliances as Immelt targets sales to emerging markets including India, China, Brazil and the Middle East for growth.
To expand in India, GE, based in Fairfield, Connecticut, would look to acquire $50 million companies, Immelt said.
“We should be doing more acquisitions here,” said Immelt, who became CEO in September 2001. “We would rather acquire a small or medium-size company than a big company because we can use our scale to make the small company a big company.”
Winning Orders
Last month, GE won a $750 million turbine order from Reliance Power Ltd., days before the Mumbai-based company awarded Shanghai Electric Group Co. a $10 billion power generation equipment contract and signed a $12 billion financing agreement with Chinese banks.
Immelt said the choice for power companies was between opting for gas as a fuel or coal. “We’ve got better technologies; we’ve got a better cost competition. This is just a choice of which fuel you’re going to buy,” he said.
Last month, GE was selected to provide engines for the Tejas light combat aircraft to the Indian Aeronautical Development Agency, the White House Press Office said in a release today. The deal is valued at about $822 million and will support 4,400 jobs, it said.
GE now gets about 55 percent of its sales from outside the U.S., according to Immelt. That compares with about 45 percent in 2005.
Immelt, 54, told Business Today magazine in October that India should be at least a $10 billion market for GE by 2015. The company last year had $2.6 billion of revenue in India, where the economy is forecast to grow at 8.5 percent for the year ending March.
Double Exports
Obama has said he wants to double U.S. exports to more than $2 trillion in five years, targeting emerging nations including India. “It’s the right aspiration,” Immelt said of the president’s goal. “We’ve done it in the last five years, as a company,” he said.
“If you think of Germany as a model, 35 percent of the German GDP is exports,” Immelt said. “It’s 7 percent in the US. That’s way too low. If we can double from 7 percent to 15 percent, that’s very achievable.”
In India, Immelt said he would like “more clarity around policy and more speed in the government.” He declined to comment on specific policies. “There’s enough capital” available for India’s market, he said.
India has targeted spending $1 trillion building roads, ports and utilities from 2012 to 2017. “We’re the world’s biggest infrastructure company so as countries invest in infrastructure that’s where our markets will be,” said Immelt, an MBA graduate from Harvard Business School. “If there’s $1 trillion invested in infrastructure, GE’s going to be very big in India.”
Consolidated Business
Immelt last year consolidated all of GE’s India business lines under one executive, John Flannery, to develop products for the country within its borders, as well as some for export.
GE has more than 12,000 employees in India across its business lines. That includes about 4,000 scientists at the Bangalore research center, one of four across the globe. Flannery reports to GE Vice Chairman John Krenicki, who oversees the energy businesses. GE had 304,000 employees worldwide at the end of 2009.
GE, along with Alstom SA, Bombardier Inc. and Siemens AG have been shortlisted as possible partners in a train-making venture of Indian Railways, the state-owned rail operator. The government in October delayed bidding for the project for another month.
“We’ve been hoping to bid on the modernization of the rail sector for 10 years,” Immelt said, speaking a day after the country’s festival of lights. “If we ever do get a chance to bid on locomotives in India, this will be my Diwali, even if we don’t win.”
To contact the reporter on this story: Ruth David in Mumbai at rdavid9@bloomberg.net; Stephen Foxwell at sfoxwell@bloomberg.net
To contact the editors responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net
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