“We see enormous opportunity here,” Steve Sargent, the company’s country head, said in a Jan. 19 interview in Sydney. Sales growth last year was 67 percent, he said, without giving a dollar value.
GE expects to double its Australia business in the four years ending 2014 because of demand for equipment to support Chinese and Indian purchases of coal, iron ore and natural gas. Across Australia, about A$232 billion ($240 billion) of mining and energy projects are under construction or in advanced planning stages, according to the government.
“It’s more than just the local inhabitants that’s driving this economy,” Sargent said. “It’s a billion-odd people moving into an urbanized lifestyle” in emerging economies, he said.
GE’s global orders for industrial products including locomotives rose to a record $200 billion, the Fairfield, Connecticut-based company said Jan. 20, when it released earnings for the December quarter. Net income in the period fell 18 percent to $3.73 billion.
“The most important thing for the stock is for the industrial business to drive growth,” Mark Demos, who helps oversee $18 billion at Fifth Third Asset Management in Minneapolis, said in a telephone interview Jan. 20.
GE shares closed at $19.15 in New York trading and have gained 6.9 percent this year. That compares with a 4.6 percent rise in the benchmark S&P 500 index.
Wind Power, Trains
In Australia, GE has already won orders to supply compression systems, used to turn gas into liquid, at the Prelude, Gorgon, and Wheatstone projects off the northwest coast of Australia. Siemens AG is providing similar equipment to the APLNG project near the port city of Gladstone. Planned investments in the LNG sector total about A$140 billion, according to the government.
GE Australia is also targeting wind-power sales and selling power units to remote mining sites, Sargent said. The company also supplies 70 percent of the locomotives for mines in the Pilbara iron-ore region and Queensland’s Bowen Basin coal district.
Demand from the energy and mining sector allowed GE’s industrial unit to surpass its finance arm, GE Capital, as the company’s biggest in Australia for the first time last year, Sargent said. The company has also boosted its local workforce of engineers and project managers fourfold since 2007.
GE Chairman and Chief Executive Officer Jeffrey R. Immelt highlighted opportunities in the country at a shareholders meeting last month.
“If you want to go to a fast-growth economy where people speak English and are nice, go to Australia,” he said.
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